The state has run out of the $5,000 rebates it was giving people who purchased all-electric vehicles such as the Nissan Leaf and Tesla Roadster.
That's on top of a price increase for the Nissan Leaf. The automaker said this week that it would raise the price of the base model when the 2012 cars come out this fall by $2,420 to $36,050, including destination charge. The higher-trim-level Leaf SL will go up $3,530 to $38,100, including destination charge.
But there could be some relief for those who were on the waiting list for the $5,000 rebate. The state's Air Resources Board on Thursday will consider a recommendation to provide rebates of $2,500 to about 500 people who have already purchased cars and who were on the waiting list.
The vote would provide additional funds for about 5,500 rebates — also $2,500 — for electric cars and some other types of zero-emission vehicles such as the hydrogen vehicles that some automakers offer through experimental lease programs, said Mary Fricke, spokeswoman for the Air Resources Board.
None of this affects the $7,500 federal tax credit used to spur sales of electric vehicles and plug-in hybrids, such as the Chevrolet Volt. The Volt doesn't qualify for the state rebate, though emission-control upgrades to the vehicles expected sometime next year could put it on the list.
The rebates are intended to promote the production and use of zero-emission vehicles, known as ZEVs, which include electric, plug-in hybrid electric and fuel-cell vehicles.
"The government is saying that if you are an early adopter, be prepared to pay for it," said Jesse Toprak, an analyst at auto information website TrueCar. He said there's enough demand for electric vehicles to absorb some price increases and shrinking rebates, at least for the next year or so.
It's not a surprise that the California rebates are shrinking, said Brian Wynne, president of the Electric Drive Transportation Assn.
"The California rebate already has been a particularly generous incentive," Wynne said.
Though incentives are helpful to increasing sales, the electric-car industry has to get to the point where its vehicles are competitive with traditional internal-combustion-engine cars, he said. That will require production in greater volume and price decreases for batteries and other components.
Nonfinancial incentives, such as carpool-lane permits for electric vehicles, can be just as important to increase sales as dollars from the government, especially in regions such as California that are known for traffic congestion, Wynne said.
The number of electric-car offerings is about to grow. Other automakers have battery-electric and plug-in offerings set to hit dealerships in the next 18 months, including the Mitsubishi iMiEV, the Ford Focus Electric, the Toyota Prius plug-in hybrid, the Toyota RAV4 electric, the Honda Fit EV and a plug-in hybrid version of the Honda Fit.
As for the Nissan Leaf, the automaker said it was making some changes as part of its price increase. It is adding cold-weather features such as a battery warmer, a heated steering wheel and heated front and back seats to both trim levels. The SL model also gets a fast-charging port that works with a 480-volt outlet to charge the car in 30 minutes, compared with eight hours using a 220-volt outlet. Previously, that was a $700 option.
Nissan also is gearing up Leaf production. It is investing about $1.7 billion — mostly from federal Department of Energy loans — in an electric-car battery factory and other upgrades at its massive factory complex in Smyrna, Tenn. It plans to start building the batteries and cars at the factory by the end of 2012.
On Wednesday, Nissan said it would produce the electric motor for the Leaf starting in early 2013 at its Decherd, Tenn., powertrain assembly plant. The factory will add about 90 jobs and will have the capacity to produce up to 150,000 electric motors annually for the Leaf, which will be built in Smyrna.
Nissan has sold 4,134 of the battery-powered electric cars this year. General Motors Co.'s Chevrolet, by comparison, has sold 2,745 of its Volt car, which is technically a plug-in hybrid because it runs on electricity for about 40 miles before a gasoline-fueled generator kicks in to extend the vehicle's range. Chevrolet also is ramping up Volt production.