Colorado has revamped its electric vehicle tax credit, with a new approach that encourages cheaper electric vehicles.
HB1272, which was passed by the Colorado legislature and signed into law by Governor Jared Polis in May, reinstates the original light electric vehicle tax credit of $5,000. As originally enacted, it has dropped to $4,000 in 2020, $3,500 in 2021, and $2,000 in 2023. But the new bill essentially resets the timeline, giving the amount up to $5,000 again starting July 1, for vehicles with an MSRP of less than $80,000, with a new period scheduled to drop to $3,500 in 2025, $1,500 in 2026, $1,000 in 2027, and $500 in 2028.
As explained by Will Toor, executive director of the Colorado Office of Energy, in a Twitter thread—and clearly stated on the bill—Coloradoans can also claim an additional $2,500 credit for vehicles with an MSRP of less than $35,000. According to Toor’s tweets, this addition is made to support the adoption of electric vehicles among low- and middle-income households, and to encourage smaller electric vehicles.
HB 1272, the tax credit for decarbonisation, is the leading national policy making the largest investment in clean energy and climate in CO history. Thanks to @mjweissman @Junie4Colorado @SteveFenberg @ Cutter4CO and @GovofCO for your leadership! (1/n)
– Will Toor (@WillToor) May 12, 2023
A $2,500 credit can be added to a $5,000 credit for a total of $7,500. And if the EV under $35,000 in question is also eligible for the $7,500 federal tax credit, buyers can get a credit worth nearly half the purchase price. That’s theoretically working at the moment, though, with a small number of EVs available for less than $35,000.
Colorado has had one of the nation’s most generous electric vehicle credits for years, even offering a credit for used cars simultaneous. In 2016 the state simplify its EV offersgive up used cars and limit the new credit to $5,000.
Mini Cooper SE 2022
Colorado also moves towards California emission standards in 2018, one more EV mission in 2019 (ie opposed by car manufacturers at that time).
Not every state has stepped up its incentives. For example, Oregon recently discovered that a funding crisis works suspend state EV rebates.
Regardless, Colorado’s focus on smaller and cheaper vehicles is refreshing alongside how, on the federal front, are often heavier and less efficient. Effectively recommended SUV with a potentially larger credit.
