Federal incentives or not, advocates see no turning back to get more EVs on Colorado roads

With the strides Colorado has made in adopting electric vehicles, state officials believe it’s “full speed ahead” on realizing state goals even if federal incentives are rolled back.

Colorado edged out California in the third quarter of 2024 to take the nation’s top spot for market share of new electric vehicles. A report said electric vehicles made up 25.3% of new vehicles sold in Colorado, compared with 24.3% in California.

In the fourth quarter, EVs made up 31.5% of new car sales in Colorado, an analysis by the Colorado Automobile Dealers Association shows.

“Over a quarter of vehicles sold in our state are electric vehicles and the demand continues to increase substantially,” Gov Jared Polis said in an interview.

State and federal incentives to buy and lease EVs and install charging stations and programs by public utilities and communities have helped increase the number of electric vehicles on the roads.

What happens if federal incentives are eliminated?

One of the executive orders signed Monday by newly inaugurated President Donald Trump targets federal incentives promoted by the Biden administration to speed up adoption of EVs to tackle the effects of climate change. The order freezes money allocated by Congress but not spent for EV-related infrastructure and rescinds an order with the goal of EVs accounting for half of the new cars sold in 2030.

Trump is also aiming for a redo on federal rules for tightening standards for tailpipe emissions and a waiver that allows California to adopt air-quality standards that are stricter than federal rules. Colorado has based some of its standards on California’s.

There’s uncertainty about the fate of federal tax credits for the purchase and lease of electric vehicles as Trump pursues policies he says would give consumers more choices. A tax credit of $7,500 for new cars is available under certain conditions, including that the vehicle’s final assembly is in North America and a minimum percentage of critical mineral and battery components were produced domestically or in a country in a trade agreement with the U.S.

The requirements don’t apply to leases. The leasing company can get the tax credit and pass savings onto customers.

Attractive lease deals thanks to the federal tax credits and the state tax credit of $5,000 helped make December a record-breaking month for EV sales at Boulder Nissan. The state credit dropped to $3,500 this year. Cars whose manufacturer’s suggested retail price is under $35,000 are eligible for an additional state credit of $2,500.

Ed Olsen, Boulder Nissan’s general sales manager, said the dealership sold about 240 electric vehicles in December, a record.

“I’ve been here for 24 years. I’ve seen a lot of ups and downs in the car business, especially in EVs over the years,” Olsen said. “The last six months of last year were by far the busiest we’ve ever been with EVs.”

Matthew Groves, CEO of the Colorado Automobile Dealers Association, said three dealers told him they “sold clean out” of EVs at the end of 2024 because of a rush to buy before federal tax credits disappear. He has seen some purchase orders cut by up to $23,000 per transaction if all the state and federal incentives apply.

The association is concerned about the potential loss of the federal tax credit and the lower state tax credit, Groves said. He noted that Xcel Energy-Colorado recently ended its EV rebate program.

Caught up short

Wes Carter of Fort Collins ordered an electric car last Sept. 12 and received word about a week later that Xcel Energy had approved his application for a rebate. He picked up his car Sept. 18 and waited for the check he was told would arrive in eight to 10 weeks. He’s still waiting.

Carter, a retired disabled veteran, shared emails with The Denver Post that showed his car order, application approval and then a Nov. 18 notice from Xcel saying its rebate program was closed. Xcel said if Carter had not received an email saying the check was in the mail, “we have unfortunately reached capacity on the program before your application could be approved and paid out.”

The email stressed that Xcel told people the rebates were issued on a first-come, first-served basis. Colorado Public Radio reported in November that Xcel said 103 pre-approved customers who received the email would get a rebate check after all.

Carter said he wasn’t able to reach anyone by phone when he initially called about the notice. As of Monday, he hadn’t heard from Xcel.

“Given that the program was income-restricted, you had to be poor enough to need it and then to not get it, that’s a heck of a lot of money,” said Carter, who used savings to cover the $5,500 he expected from the rebate.

While declining to discuss an individual customer because of privacy concerns, Xcel spokesman Tyler Bryant said in an email that no rebate type was prioritized or paid before the other. He said Xcel worked directly with nearly 100 people whose applications were approved to ensure their rebates were paid.