New Jersey's Electric Car Incentive Program Is Already Out of Funds
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An electric car incentive program in New Jersey, which pledged to subsidize up to $5,000 on the purchase, lease, or order of an electric vehicle, has already run out of money. The Charge Up New Jersey program was officially put on hold by the New Jersey Board of Public Utilities (BPU) at 9 p.m. on Sept. 15, due to a lack of funding.
This is not the first time that this has happened to the program. It launched late last year, only operating for six months before running out of funds for the first time. After re-launching on July 6, 2021, the program lasted a mere 10 weeks before once again being suspended.
Over the past two years, the Charge Up New Jersey program has provided around $30 million per year in electric vehicle incentives.
How this electric car incentive program works
This program has changed since last year, to be more efficient for consumers. Car-buyers can request their incentive during the purchase, rather than as a reimbursement after the fact. The dealer will then revise the price accordingly and is responsible to apply for the incentive to compensate for the difference.
Dealers will have until Oct. 15 to apply for reimbursements from vehicles bought on the program’s final day, Sept. 15.
Only vehicles that cost less than $45,000 are eligible for the incentive of up to $5,000, while EVs that cost between $45,000 and $55,000 are eligible for a lower incentive of up to $2,000.
The vehicles subsidized by the program must be zero-emission and can include battery-powered or plug-in hybrid EVs. According to the Environmental Protection Agency, the state-provided incentives account for $25 per mile of the vehicle’s all-electric range.
Demand for electric cars outstrips program funding
Over the past two years, the Charge Up New Jersey program has provided around $30 million per year in EV incentives, which supported the purchase, order, or leasing of almost 9,000 EVs. This project reflects the Murphy administration’s aim to ramp up EV use in New Jersey to 330,000 vehicles by 2025. Currently, New Jersey roads are home to around 45,000 EVs.
“We knew this was going to be a really popular program,” said Pamela Frank, CEO of research non-profit ChargEVC, to New Jersey 101.5. “We also knew that $30 million a year as sort of a minimal investment in these rebates was really not going to be enough to get us where we need to be.”
Frank argued that the program ran out of funding so much more quickly this year than last year because consumers knew that the money would be replenished this year and waited before making their purchases. “You saw nine months of pent-up demand sort of squish into 10 weeks,” she said.
This being said, Frank conceded that the program’s closure could have been handled better, as it was suspended with hardly more than a day’s notice and little public communication.
She also acknowledged that the BPU was in a difficult position. “It’s challenging,” Frank said. “Once they know they’re running low on budget, if you give an announcement to the market like, ‘You’ve got two weeks left,’ you may overspend because people are going to be motivated by scarcity.”
City hopes to re-launch electric car incentive program by next summer
The BPU announced its hope to reallocate additional funding toward the program, with a view to restarting it by summer 2022. According to New Jersey 101.5, Kelly Mooij, director of the Division of Clean Energy, reported that the state is “evaluating the possibility of the additional funding, with the goal of reopening the program prior to the next fiscal year.”
Joseph Fiordaliso, president of the BPU, also weighed in: “New Jersey’s EV incentive program has been very successful,” he said. “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.”
Mooij adds that the program is a great way for New Jersey to help deal with the climate crisis, as it motivates “drivers to switch over from internal combustion engines to electric vehicles.” “Transportation is the number one contributor to emissions in New Jersey,” she said. “In order to reduce emissions, we need to electrify our vehicles.”