Whitmer proposes up to a $2,500 EV subsidy

Gov. Gretchen Whitmer proposed up to a new $2,500 state tax rebate for a new electric, hybrid, or traditional vehicle.

In the upcoming State of the State address, Whitmer will ask the legislature to allocate $25 million to fund the MI Vehicle Rebate program, which wouldn’t apply to used vehicles.

"MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys," Whitmer said in a statement. "Michigan’s auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract. Now, let’s keep making the world’s best cars and trucks while lowering costs for families by thousands of dollars. Together, we will build and lead the future of mobility and electrification."

Combined with the federal tax credit, Michiganders could save up to $10,000 on the cost of certain EVs. Whitmer proposed the tax rebate on new vehicles under four categories:

$2,500 on a new battery electric or hybrid vehicle manufactured in a facility where the workers are represented by an automotive union.$2,000 on a new battery electric or hybrid vehicle.$1,500 on a new internal combustion vehicle in a facility where the workers are represented by an automotive union.$1,000 on all other new internal combustion vehicles.

The state tax rebate would be applied to the final price of a vehicle at purchase. Once an individual selects the new vehicle they intend to buy, the auto dealership would contact the Department of Treasury to receive a tax rebate voucher. The licensed new vehicle dealership subtracts the rebate amount from the final purchase price based on the vehicle category and rebate amount.

If enacted, the rebate will continue until funds are depleted.

The program aims to boost Michigan's 34,380 EV registration which has fallen more than 1.9 million EVs short of reaching its climate goal of 2 million EVs driving on Michigan roads by 2030. To reach its EV goal, Michigan must register 23,400 EVs every month for seven years.

EV drivers on road trips and going further distances in the Midwest face "range anxiety" because of a sparse charging network and a fluctuating mileage range based on driver habit.

Kelley Blue Book says the average price of an EV in September 2022 was $65,291. Meanwhile, the average price for a gas-powered vehicle was $48,100, and many used gas-powered cars cost between $5,000 and $15,000.

“The clean energy transition is happening, and it is critical that Michigan is a leader in the technology development, manufacturing and adoption of electric vehicles,” MICHauto Executive Director Glenn Stevens. Jr. said in a statement. “At the same time, the transition will take time and needs to be balanced. Support for new EV sales and for those vehicles made in America is important as Michigan moves forward as a leader in the technology of today and tomorrow.”