Sale Of Cheaper Teslas Empties Out California's Clean Vehicle Rebate Program

Tesla Model YImage: Tesla

California’s Clean Vehicle Rebate Program has helped thousands of buyers get into EVs, but thanks to Tesla’s drastic price drops this year on its cheapest offerings got so many people applied for the program that the funds are already exhausted for the year.

Unboxing An $8,000 BMW E-Bike

The program is nearly out of funds; a disclaimer on the program’s website says the same thing. However, the California Air Resources Board presented a document titled “Proposed Fiscal Year 2023-24 Funding Plan for Clean Transportation Initiatives” in May of this year. Essentially, officials said that Tesla’s price cuts would result in the program running out of funds, or close to it by October 2023. From Cars Direct:

In its “Proposed Fiscal Year 2023-24 Funding Plan for Clean Transportation Initiatives,” CARB says “staff provided updated end-of-funding projections indicating that the project could run out of funding as early as October” in a meeting back in May 2023. While CVRP funding gaps aren’t uncommon, this year was different.

The agency added, “This is due in large part to Tesla Model 3 and Model Y vehicles becoming eligible for the project once again, leading to an increased volume averaging about 12,000 applications per month since March 2023.” The models were barred from the program in 2022 when Tesla exceeded CVRP MSRP caps.

It makes sense, there were parts of California where buyers could get a new Model 3 for under $20,000 over the summer, when local, state and federal taxes were all taken into account. That’s a lot cheaper than the average price of a new car in general. While the program was good on its surface the downside was that it didn’t actually help people it was designed to help; most of the people who took advantage of the program were higher income EV buyers who could afford them without the rebate.

This isn’t the first time the program has run out of funds. In the spring of 2021 the program was running low. This time it’s different as once the funds are gone, the program is done. So, the CVRP is ending sooner than expected and being replaced by a program called Clean Cars 4 All which aims to do what the CVRP was supposed to do in the first place: help low income buyers purchase EVs.