Michigan Could Offer A $2,500 New Car Rebate To Boost The State's Economy

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Michigan Governor Gretchen Whitmer has long been a friend of the auto industry, pushing annual proposals for incentives and rebates into the state budget every year. Her most recent proposals have set aside $50 million to assist Michiganders in purchasing electric or hybrid vehicles. As both have been pushed aside by conservative state lawmakers, this year her incentives package request has been cut in half to $25M and allows provisions for incentives to buy new internal combustion vehicles as well. Considering the state’s economic health is heavily dependent on consumers purchasing new vehicles, these incentives could be a political win for Whitmer, if they go through.

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The latest proposal would provide a state tax rebate to lower the cost of a new vehicle purchase in tiers based on who made it and what powers it. To qualify for the full $2,500 rebate, your new car purchase would have to be a new EV or hybrid made in a union facility. Non-union-made EVs and hybrids will only qualify for $2,000. If you want to support unions but don’t want an EV or hybrid, your union-made gas or diesel vehicle would still get $1,500 in state incentives. And finally, if you get a gas or diesel car built in a non-union factory, you’ll still get a proposed $1,000 off.

“Michigan’s auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract. Now, let’s keep making the world’s best cars and trucks while lowering costs for families by thousands of dollars,” Whitmer said in a Dec. 13 news release.

If this proposal makes it into the Governor’s approved 2024-25 budget, there is no expiration date, it would simply end when the budgeted money ran out. Considering Michigan sees around 45,000 new car sales per month, the proposed $25M would run out in about 17 days.

Getting a nice little kickback from the state might incentivize some Michiganders to bring forward their new car purchases, and the extra bucks might convince some to step into an electric vehicle. Whitmer started championing this incentive package to help strengthen Michigan’s electric vehicle future, but after a couple of years of pushback, it’s now been watered down considerably. From a state budget nearing $80 billion, this $25 million should be barely worth a consideration. Without political grandstanding and conservative pushback on batteries, this would hardly have been up for debate two years ago.