NJ electric vehicle incentives out of cash, going on hold again
TRENTON – New Jersey’s incentive program providing up to $5,000 toward the order, purchase or lease of an electric vehicle is running out of money again and will be suspended as of 9 p.m. Wednesday, Sept. 15.
The Charge Up New Jersey program began last year, then went on hold for more than six months after the funds were fully allocated. It restarted on July 6 – but is already going back on hold ahead of schedule just 10 weeks later.
The program has provided an estimated $30 million a year in incentives toward nearly 9,000 EVs over two years, supporting the Murphy administration’s goal of having 330,000 electric vehicles on New Jersey roads by 2025.
From December: Sold out: NJ electric vehicle incentive on hold until summer
The Board of Public Utilities said it hopes to identify additional funding to reopen the program before next summer.
“Absolutely," said Kelly Mooij, director of the state Division of Clean Energy. "We are evaluating the possibility of the additional funding, with the goal of reopening the program prior to the next fiscal year.”
“New Jersey’s EV incentive program has been very successful,” said Joseph Fiordaliso, the BPU president. “There is clearly enthusiasm for electric vehicles so while the program is paused, we are evaluating all options with the hope of reopening before the next fiscal year.”
There are probably around 45,000 electric vehicles in New Jersey currently, said Pamela Frank, chief executive officer of ChargEVC, a not-for-profit trade and research organization.
“We knew this was going to be a really popular program," Frank said. "We also knew that $30 million a year as sort of a minimal investment in these rebates was really not going to be enough to get us where we need to be.”
The first version of the program expired last December after six-plus months in operation. Frank said that while the program's exhausted its money more quickly this year, that was caused in part by some people who had held off on purchases knowing the money would return.
“You could make the case that you saw nine months of pent-up demand sort of squish into 10 weeks," Frank said.
Frank said it was unfortunate that the program closed with a little over a day's notice and little publicity but that the state was in a tough spot as the money dried up.
"You don't want the program to start and stop if you can help it," she said. "But it's challenging. Once they know they're running low on budget, if you give an announcement to the market like, 'You've got two weeks left,' you may overspend because people are going to be motivated by scarcity, as people usually are."
The BPU is suspending the program as of Sept. 15 based on the program’s current rate of application approvals and orders of eligible vehicles, which must be zero-emission vehicles, including battery electric and plug-in hybrid electric.
The incentives amount to $25 per mile of a vehicle’s all-electric range, as rated by the Environmental Protection Agency. Cars with a manufacturer’s suggested retail price under $45,000 can receive up to $5,000 in incentives.
Vehicles with an MSRP between $45,000 and $55,000 can receive up to $2,000. That is a change from the program's first year, when the maximum incentive was available for cars worth up to $55,000. Vehicles more costly have been excluded from the program.
Cars with an electric range of at least 200 miles can receive the maximum $5,000 incentive.
“We think this is a market that’s taking off, certainly, and the incentives we can see from the way the program has been utilized help to encourage drivers to switch over from internal combustion engines to electric vehicles," Mooij said.
“Certainly, transportation is the No. 1 contributor to emissions in New Jersey, and we all know New Jersey loves to drive," she said. "In order to reduce emissions, we need to electrify our vehicles.”
People apply for the incentive with their dealer at the point-of-sale, another change from the program's first year, when it was available as a reimbursement.
The dealer deducts the incentive from the cost of the vehicle and submits the application on the buyer’s behalf. Dealers will have until Oct. 15 to complete the application process for vehicles bought by 9 p.m. on Sept. 15.
Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at email@example.com.