By Kiara Doyal, The Seattle Medium
Just two months after its launch, the participation in the Washington State Department of Commerce’s Electric Vehicle (EV) Instant Rebate Program, which helps low-income drivers lease or buy EVs, is three times higher than expected, as more than half of the allocated funds for the program have already been spent, with more than 3,300 Washington residents having received rebates during the initial 60 days of the program.
According to Steven Hershkowitz, managing director of Commerce’s Clean Transportation Program, 55% of the program’s nearly $45 million budget has already been spent. Based on the current level of participation, funding for the program is now expected to run out by the end of October. Currently, there aren’t any appropriations by the state to replenish the fund, which means that residents who are hoping to take advantage of the program are quickly running out of time.
“As of September 24th, 2024, the program has provided 3,351 rebates, with 64% (2,145) for leases, and the average rebate so far is $7,292. At the current pace, I expect the state to issue about 6,000 rebates,” says Hershkowitz.
In May 2024, Governor Jay Inslee and Washington State Department of Commerce Director Mike Fong previewed the $45-million program with high hopes that the funding would last until the spring of 2025. However, officials with the Department of Commerce admit that they underestimated the number of low-income people who would take advantage of the program so soon.
“When the program launched on August 1, Commerce estimated funding could last until next spring, but participation has far exceeded expectations due to two factors. The level of participation is about three times higher than forecasted, and the $9,000 three-year lease option was even more popular than expected,” says Hershkowitz.
Fong says that the popularity of the program indicates the growing demand for EVs when price is not a factor.
“In real time, we are validating our research that EVs are popular with people at all income levels,” says Fong. “Vehicles are rolling out of dealerships so much faster than we expected. Drivers wanting to take advantage of the program should act within the next month before funds run out.”
Washington’s rebate program is also achieving its intended goal of increasing access for low-income households. According to the Commerce Department, 90% of rebate recipients say they couldn’t have bought or leased an electric vehicle without the rebate, far exceeding California’s EV rebate, which previously achieved a 66% rate for low-income participants.
“Washington is the first state to prioritize low-cost leases as part of an EV incentive program, and the fact that two of every three rebate recipients are choosing this option shows it is the most effective way to accelerate the transition to an equitable EV market,” says Michael Furze, Commerce Energy Division Assistant Director.
In addition to the higher-than-anticipated participation of consumers, Hershkowitz says that the program also saw a greater number of car dealerships participating than anticipated, with 308 participating dealers statewide, including nearly all franchise dealerships, direct-to-consumer automakers like Tesla, and independent dealers.
Hershkowitz says that the program is expected to generate $2.84 in benefits for every $1 spent within five years. This projection takes into account the social cost of carbon reduction, which includes improved health outcomes, fuel savings from switching from gasoline to electric vehicles, and savings on the initial vehicle cost. Many of these savings will materialize in three years when leased vehicles either enter the used market or are retained by their current owners.
Starting this week, the webpage, www.WAInstantRebates.org, will be updated with the funding remaining in the program, and a specific program end date will be announced when funding is nearly exhausted. However, Commerce is not setting a program end date at this time, which will allow flexibility to maximize available funding. Additionally, Commerce plans to provide dealers and customers at least a few days’ notice through a future announcement.