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By Suzanne Blake
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Illinois could make it more difficult for residents to score a $4,000 rebate if a new piece of legislation goes through.
The state's General Assembly is hoping to pass a law, House Bill 5286, that would narrow the eligibility requirements for electric vehicle (EV) rebates to solely low-income residents beginning July 1. Currently, $4,000 is available for those who purchased an electric vehicle, with $1,500 on the table for those with electric motorcycles.
The program has cost the state $19 million in just its first round, with roughly 4,900 residents benefiting.
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However, the state found that only 10 percent of the rebates went to low-income residents, and 300 of the rebates went to buyers of luxury models costing up to $125,000.
For the second round of rebates, the state is anticipating another $12 million will go to the program, with many calling into question its sustainability.
"It, unfortunately, is the direction we need to go right now with our budget constraints, but hopefully in the future we will be able to offer this to more Illinoisans," Democratic state Representative Ann Williams said during a House Revenue and Finance Committee hearing last week. The bill was referred to the Rules Committee on April 5.
Laura Roche, chief of staff at the state Environmental Protection Agency, noted that the past year saw 32,000 new EV registrations in the state.
"If we were to give all of those a rebate, it would be about $128 million and we had $12 million to work with this year, so this is our proposal to transition it to a low-income-only program," Roche said.
If the bill passes, only those who make up to about $42,000 a year would be eligible. Only 12 percent of those who already applied for the program consider themselves to be low income.
According to the state Assembly's website, the bill would add a rebate for electric motorcycles of $1,500 beginning on July 1, 2024, $750 beginning on July 1, 2026, and $500 beginning on July 1, 2028. It also would lengthen the time for applying for the rebate to 120 days beginning in July 2024.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said the issues with Illinois's rebate are two-fold.
"One is that public sentiment now appears to be turning against electric vehicles as an immediate replacement to their existing automobiles," Beene told Newsweek.
"Whether it's the politics behind them or a lack of infrastructure in their area to support getting one, buyers are becoming fewer. Pairing that with how much it's costing taxpayers and that it isn't benefiting the most in-need citizens, and you have a program that is rightfully seen as needing revision."
Illinois isn't the first state to adopt an incentive program for electric vehicle purchases. Many have similar programs in an effort to ease carbon emissions as EV sales have largely stalled nationwide.
"While the federal government's electric vehicle tax credit program is the best known to many Americans, other states did offer additional rebates as incentives," Beene said. "Illinois had a $4,000 rebate, which they hoped would mainly help low-income state residents in making the leap to electric vehicles."
Illinois Governor J.B. Pritzker previously said he hoped to have a million electric vehicles on Illinois roadways in six years, but demand has waned.
"People have complained about what has happened to the EV industry," Pritzker said at the state's "EV Showcase Day" this month. "Eventually as industries grow, you come down from a couple of hundred percent growth to a hundred percent growth to 50 percent growth and then just a double-digit growth, and that's what we're seeing I think in the United States."
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