A popular incentive program aimed at helping motorists purchase or lease electric vehicles is running out of money — less than three months after starting up again.
The incentive program kicked in on July 6 and is nearly out of the $30 million budgeted for it.
The New Jersey Board of Public Utilities on Wednesday paused the acceptance of new applications for grants of up to $5,000 to buy or lease an electric vehicle. The pause was needed, the board said, to ensure all of those who had applied would be able to get their grants.
It is the second time in a year the agency was forced to shut down the Charge Up New Jersey program because so many people sought to take advantage of the rebates. In the first two years, the program has maxed out all committed funding to provide nearly 9,000 new electric vehicles (EVs) to New Jersey residents to date.
$30M was ordered for the program
The program was created by the Legislature and signed into law by Gov. Phil Murphy last year as a key component of the Murphy administration’s clean-energy program and to curb emissions of global warming pollution. The law mandated the state spend $30 million annually to offset the cost of buying or leasing an EV, which are more expensive than conventional gas-fueled vehicles.
The state has chosen to fund the program through an existing surcharge on electric and gas bills paid by utility customers. The money is intended to achieve the goal of getting 330,000 EVs owned by New Jersey drivers by 2025. New Jersey had about 40,000 EVs on the road as of last June.
“New Jersey’s EV incentive program has been very successful. 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,’’ said BPU President Joseph Fiordaliso. The next fiscal year begins July 1, 2022.
With the state’s commitment to electric vehicles and the build-out of the necessary charging infrastructure, coupled with commitments from the Biden administration, New Jersey is well on the way to achieving Murphy’s EV goals, according to Fiordaliso.
Second year in operation
The second year of the incentive program included modifications that simplified the process. The key one involved applying the incentive at the point of sale or lease of a vehicle where the rebate is taken off the price of the car.
The state also lowered the rebates, a move criticized by some advocates since some EV manufacturers increased prices, making the purchase or lease of an electric car less appealing even with the rebates.
Not everyone is enthused about the program, including James Appleton, president of the New Jersey Coalition of Automotive Retailers.
“Well, if you go strictly by the numbers, I suppose you can say the program was a success,” Appleton said. “But we really must look past the numbers and ask, after two years, was the ChargeUp program a $60 million success that ‘incentivized’ consumers to buy EVs they wouldn’t have purchased otherwise, or was it a $60 million ‘giveaway’ to people who were already going to buy an EV anyway.”
Appleton argued his organization needs to take a deep dive into the sales data and really understand where the money went. And that would include looking at where the cars were registered.