According to the Washington Policy Center, which published the “Results of Washington’s EV Instant Rebate” study, “For every $1 of subsidy provided in Washington state’s electric vehicle (EV) rebate program, the people of Washington receive just over one penny’s worth of environmental benefit.” The stated purpose of the state’s EV instant rebate program is to increase the number of “zero-emission vehicles” by helping middle-income people buy electric vehicles, reduce carbon dioxide (CO2) emissions, and help the state meet its requirement that 35 percent of new passenger vehicles sold in 2026 be either electric or plug-in electric. “Zero-emission vehicles” are named because they do not emit CO2 from tailpipes. However, the generation of the electricity they consume, as well as their manufacture or the production of their fuel such as hydrogen, may emit CO2.
While the program did deliver some emission reductions, the CO2 emissions reductions were much smaller than expected, reducing lifetime emissions by only 13,030 metric tons — equivalent to about 0.03% of Washington’s annual transportation-related emissions. By one estimate, the rebates increased EV sales by just 4,788 vehicles, well below the initial projection of up to 8,767 additional electric cars. As with the federal EV tax credit, a significant portion of the subsidies went to buyers and those with higher incomes who would have purchased an electric vehicle without the subsidies. Despite the program’s failure to achieve its goals and redundancy with other state climate programs, former Washington Governor Inslee’s proposed 2025-27 budget includes an additional $62.5 million to extend the subsidies.
The study used two state databases from the Department of Licensing to analyze the results: the State of Washington Vehicle Title Transactions, which provides information about original vehicle registrations for new cars, and the Electric Vehicle Title and Registration Activity, which contains sales information, including the sale price of the vehicles.
Background
On Earth Day of 2024, Governor Inslee announced the $45 million program designed to incentivize middle-income families to buy electric vehicles and plug-in hybrids, indicating that the program would be “opening the door to EVs for people of modest incomes.” To qualify, buyers had to make less than $45,180 if they were single and less than $93,600 for a family of four. The subsidies provided eligible buyers up to $9,000 on a lease or $5,000 on purchasing a new qualifying electric vehicle on top of the $7,500 in federal incentives on certain vehicles. Buyers of used electric vehicles received $2,500. The rebates were limited to certain vehicles, but the price range was very wide, providing rebates for the Audi e-tron S with a starting price of $88,200, down to the Nissan Leaf with a base price of $28,140. The rebates began on August 1, 2024, and were gone in less than three months, with most of them accessed in August and September.
Washington state’s Department of Commerce projected that the program could “lead to a reduction of up to 24,000 metric tons of CO2 emissions in the transportation sector,” coming from the internal combustion engine vehicles being replaced by electric vehicles. It also reported that the program provided slightly more than 6,100 rebates.
Study Results
As mentioned above, potential CO2 reductions were much smaller than expected, costing $3,453.57 to reduce one metric ton of CO2 — nearly 86 times as much as the state’s CO2 price, meaning that for every $1 of subsidy, Washingtonians received just over a penny’s worth of environmental benefit. Todd Myers, vice president for Research at Washington Policy Center and the study’s author, indicated, “The EV subsidy is so poor at cutting CO2 emissions, it is like paying $2,072 for a latte.”
The study also found that the program achieved just over half of the expected EV sales and that the average income of the zip codes where vehicles were purchased was virtually the same as that of EV sales before the rebate. During the three months when the rebates were in effect, the average household income of the zip codes where rebate-eligible electric vehicles were sold was $118,816, slightly less than the average household income of $122,601 in the months before the rebate was available.
As mentioned above, the rebates resulted in EV sales far less than the expected number. They increased new EV sales by an estimated 3,477, used sales by 1,163, and electric trucks by about 187, for a total of 4,788 when compared to the average monthly sales in 2024 before the rebates. Since car sales are seasonal, the authors also compared sales in August, September, and October of 2024 to the same months in 2023, which resulted in a much smaller increase of 778 vehicles.
In 2024, new plug-in hybrid sales saw a decline of 344 vehicles compared to the monthly average from earlier in the year, but the drop was smaller — only 191 vehicles — compared to the same months in 2023. This decrease could be attributed to buyers opting for fully electric vehicles, using their rebate savings to make the switch. Additionally, the average sale price of new plug-in hybrids rose during the rebate period, suggesting that fewer budget-friendly models were sold, which led to a higher proportion of sales for more expensive models.
Meanwhile, sales of used electric vehicles and plug-in hybrids grew during the rebate period. Compared to the 2024 monthly average sales before the rebates, 1,163 used electric vehicles and 305 used plug-in hybrids were sold. In the same months in 2023, sales were slightly higher, with 1,694 used electric vehicles and 490 used plug-in hybrids sold.
Electric trucks are a small portion of the market, and only three models qualify for the Washington state rebates. About 187 more electric trucks were sold compared to the monthly average EV truck sales in the rest of 2024.
The most popular vehicle purchased with the rebate was the Tesla Model 3, which doubled its sales with 1,191 more cars than expected based on sales in 2024 before the rebates. The other big winners were the Honda Prologue (583 additional sales), the Subaru Solterra (329 additional sales), and the Nissan Ariya (267 additional sales). Four of the five models with the most significant sales increase had an average price of less than $50,000. The average sale price of the top five models whose sales increased is just under $45,000, which is equivalent to a BMW 3-series sedan.
Through October 2024, electric vehicles and plug-in hybrids accounted for 21.8 percent of new vehicle sales, only slightly above the 2023 level of 20.5 percent and well below the 35 percent the California EV sales program requires in 2026 — a program that Washington state joined with about a dozen other states.
Conclusion
A study has found that Washington state’s Instant EV Rebate program had very poor environmental and purchase results, making it clear that the program should not be continued. The program has a negligible impact on transportation-related CO2 emissions in the state, and the cost is exceptionally high. Although the program was to “provide low-income Washingtonians access to electric vehicles,” the average income of purchasers was very similar to the high-income households already purchasing electric vehicles. Further, the study’s authors find that the EV mandate does not reduce CO2 emissions on top of existing laws because the state’s Climate Commitment Act puts a cap on statewide CO2 emissions, which requires CO2 reductions with or without the EV mandate.
Under Governor Inslee, Washington State saw its energy costs soar as consumers absorbed his climate policies, such as the EV rebate program, which provided little bang for many bucks. Gasoline prices rose significantly, at times competing with California’s nation-leading costs. Washington’s new governor, Bob Ferguson, has supported many of those policies in the past but may have opportunities to weigh these policies’ costs on his state with the benefits of an alternative approach.
