California launches EV subsidy scheme for low-income households

As the Golden State pushes towards its ambitious carbon neutrality goal, California’s low-income residents can apply for a subsidy incentive to transition to a zero-emission vehicle. The California Air Resources Board (CARB) has introduced the Driving Clean Assistance Program (DCAP), a supportive aid worth $242 million (€217,5 million) to leverage EV adoption. The program mimics similar initiatives in France and Italy.

The Californian program ensures that economically disadvantaged communities, including rural and tribal areas, can access cleaner transportation options. Eligible participants can apply for a decisive budget advantage, leveling the gap between fossil fuel and more expensive zero-emission vehicles.

Incentives for scrapping old vehicles

Those who scrap an older, polluting vehicle can receive up to $12,000 (€10,790) in grants to purchase or lease a new or used zero-emission vehicle, such as an electric car, motorcycle, or e-bike. Additionally, participants are eligible for an extra $2,000 (€1,800) to cover electric charging costs.

DCAP provides $7,500 (€6,742) towards purchasing a zero-emission vehicle or other mobility options, such as carsharing services, for those without a car to scrap. Low-interest loans are also available through partnerships with credit unions, enhancing affordability.

“California has ambitious goals of achieving carbon neutrality and a clean air future, but reaching those targets is impossible if Californians are priced out of clean transportation options,” said CARB Executive Officer Dr. Steven Cliff.

“The new Driving Clean Assistance Program focuses on low-income Californians, bringing zero-emission technology and increased transportation options to underserved communities across the state.” Like Europe, the Golden State intends to block sales of ICE vehicles by 2035.

Tesla Model Y for half the ticker price

To qualify for DCAP, applicants must be California residents with an income at or below 300% of the federal poverty level, which is currently $93,600 (€84,150) for a family of four. Applicants must also not have previously participated in other CARB vehicle-purchase incentive programs.

Furthermore, eligible participants can still benefit from federal incentives, such as the $7,500 (€6,742) EV rebate from the Inflation Reduction Act. When combined with the new incentive, this can significantly reduce the cost of an electric vehicle.

For example, a qualifying buyer could purchase a new Tesla Model Y RWD, priced at $42,990 (€38,650), for an out-of-pocket cost of $23,490 (€21,120) after incentives, with an additional $2,000 (€1,800) available to cover charging costs.

A European inspiration

Subsidy schemes for economically disadvantaged families spawned in Europe. Italy and France have set up similar schemes to help less wealthy households transition to electric vehicles, aiming to reduce the threshold by lowering the financial burden.

Italy’s Ecobonus program offers subsidies up to €13,750 for low-income buyers trading in older Euro 2 vehicles, with tax exemptions and support for home charging installations. France’s Bonus Écologique provides up to €6,000 for low-income families purchasing EVs, with an additional bonus of €1,000 when scraping an old car.

Depending on the model and the applicant’s profile, French citizens can also favorably lease an electric vehicle for €100 or €150 per month.