Colorado's EV rebate options are decreasing
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Illustration: Allie Carl/Axios
The generous tax credits on the purchase of electric vehicles in Colorado are shrinking.
Why it matters: The cost of EVs will more closely mirror gas-engine vehicles and possibly disincentivize buyers from making the electric shift.
Driving the news: The state temporarily boosted its tax credit on EVs three-fold in 2023 to $5,000, but that perk will expire at the end of the year.
- In 2025, the tax credit for qualified buyers will decrease to $3,500.
- Xcel Energy ended its tax credit for low-income customers after offering $5.3 million in rebates up to $5,500 this year.
- The federal $7,500 tax break also is expected to vanish under the new Trump administration.
Caveat: The $6,000 rebate for low-income residents to exchange an older or high-emitting vehicle remains in place.
The big picture: The tax breaks helped make Colorado the No. 1 state for EV sales in the third quarter of 2024 surpassing California, according to new national data. Electric cars and plug-in hybrids made up 25.3% of new vehicles sold in the quarter.
- The state set a goal for 940,000 EVs registered in the state by 2040 to help achieve net-zero emissions statewide by 2050. Through Nov. 7, 156,281 were on the road.
What they're saying: The milestone drew cheers from Gov. Jared Polis, who has used his social media accounts to promote EV sales.
- He acknowledged in a statement to Axios that the "tax credit discounts remain an important part of saving Coloradans money." But the credits were always designed to stagger lower. The state tax incentives for future years are yet-to-be determined.
- He expects demand for EVs to remain high, especially as more models come on the market.