Despite climate goals, state rebates for electric vehicles are running on empty • Maine Morning Star

For every 200 new car registrations in Maine, around 13 of them are for electric vehicles. 

This is up from 2020, when fewer than three out of every 200 newly registered cars were either battery powered or plug-in hybrids. But the state wants to see that number climb even higher. 

The state’s newly updated climate action plan, known as Maine Won’t Wait, set a goal of having 150,000 light-duty electric vehicles on Maine roads by the start of the next decade. This year, there were fewer than 17,500. 

With a ways to go to achieve that goal, the climate plan outlines ideas for encouraging people to ditch their internal combustion engine vehicles for those that produce no or low tailpipe emissions. However, one of the incentives the state has used in recent years to promote that transition has run dry without any current plan to bring it back. 

“To further increase the number of EVs on the road, Maine must continue to offer attractive EV rebates and expand the dealer network offering rebates, especially in rural communities,” the climate action plan reads. 

But those rebates will need more money to continue. In mid-November, Efficiency Maine had to stop issuing rebates — except for those designated for low-income customers — because it exhausted the $13.5 million it had to fund the program since it started in 2019.

That money came from a variety of sources including payouts from multiple legal settlements and money allocated by the Maine Legislature, said Executive Director Michael Stoddard. The 2022 state budget included $3.5 million for the program. 

State policymakers are considering next steps to provide incentives for electric vehicles and plug-in hybrids, said Jackie Farwell, spokesperson for the Governor’s Office of Policy Innovation and Future, which is directed by Maine Climate Council co-chair Hannah Pingree. The next session of the Legislature, during which lawmakers will need to pass a new biennial budget, will start in early January with Democrats in control of both chambers. 

“The ambitious but realistic EV goals in the updated climate action plan are built upon comprehensive modeling that incorporates a range of factors, including, but not limited to, the availability of rebates,” Farwell said. 

She added that as the state expands its charging infrastructure, electric vehicles and plug-in hybrids are becoming more popular in Maine. Both vehicle types can help reduce greenhouse gas emissions, especially in a sprawling, rural state like Maine, where transportation accounts for nearly half of carbon emissions.

Given that, a draft report from the Governor’s Energy Office outlining how the state can meet its clean energy goals said that electrifying transportation is “essential for meeting Maine’s clean energy and greenhouse gas reduction goals.”

About the state EV rebates

Efficiency Maine’s EV rebate program offered up to $2,000 for the purchase of a new battery electric vehicle or plug-in hybrid to Mainers of any income. The rebate amount increased to $7,500 for low-income consumers and included an option to get some money back for purchasing a used hybrid or electric vehicle.

In order to receive the low-income rebate, the purchaser must be part of a household currently receiving other benefits, such as the Low Income Home Energy Assistance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families or MaineCare. 

There was also previously a third rebate category for moderate-income households that included individuals making less than $70,000 and couples earning less than $100,000 a year, but that also has been cut. 

Rebates for low-income drivers will continue because the money earmarked specifically for those hasn’t run out yet. One of the $5 million settlement awards specified that a quarter of the money be used for low-income rebates. 

More low- and moderate-income drivers have accessed rebates in recent years, but they still only accounted for 17% of state EV rebates in 2024, according to the state’s updated climate action plan. The vast majority of EVs were purchased by higher income households. 

The life of the rebate program was always dependent on the demand, Stoddard said. Efficiency Maine forecasted the funding would last through June 2025, but he said demand accelerated in the past six months so the money went faster than expected. 

Stoddard posits that this could have happened because electric vehicles have become increasingly affordable and more models came onto the market, giving drivers more options to weigh against traditional gas-powered cars. 

Future of EV rebates in Maine

Going forward, Efficiency Maine has proposed what Stoddard described as a “modest budget” for EV rebates in its three-year strategic plan that still needs approval from the Public Utilities Commission. The proposal gradually increases from about $2 million next year to $4 million in fiscal year 2028. 

A 2021 clean transportation roadmap from the Governor’s Energy Office and the Office of Policy Innovation and the Future estimated that a low-income EV rebate program would require $11 million to $28.8 million per year through 2032.

If the rebate program is replenished, Stoddard said he expects Efficiency Maine to place a greater emphasis on low- and moderate-income customers who may face more barriers to purchasing an electric vehicle even as sticker prices come down. 

“I think our programs, if they are able to continue in the future, will become more focused on specific segments of the marketplace that are slower to adopt this equipment,” Stoddard said.

Rebates aren’t the only option

Incentives can be helpful in getting people to start using new, unfamiliar technology. As for the EV rebates, Stoddard said they have encouraged car dealerships to add more electric vehicles to their inventory and stirred up interest in early adopters to try these new cars. 

But state rebates are just one tactic, Stoddard said. There are other financial incentives such as federal tax credits and the functions of a free market bringing down the sticker price to make electric vehicles more comparable to their gas-powered counterparts. 

Federal tax credits offer up to $7,500 for some new battery electric vehicles and plug-in hybrids. However, there are eligibility requirements and income caps. There are also smaller federal tax credits available for the purchase of used electric vehicles. 

Maine’s climate action plan says the state should explore other means of making electric vehicles more affordable, such as broader access to financing and other tax incentives. 

Additionally, Stoddard explained that some consumers may also need the assurance that there will be sufficient fueling capability, so developing a network of public chargers can help people feel confident that they could travel around the state as they please with an electric vehicle. 

Maine has more than 500 public charging locations with more than 1,100 individual charging ports, according to a map from Efficiency Maine. Although most of them are concentrated in the southern part of the state, there are public chargers along the northern and eastern borders. 

The state is also investing more than $50 million to install 700 new charging ports by 2028.