How Oregon Got An EV Rebate - And Why it Matters

November 20, 2017

By: Jeff Allen, Executive Director

The last couple of years have been fairly rough ones for state-level electric vehicle policy. Seven states have eliminated incentives for electric cars, and seventeen have imposed new annual fees on electric vehicles. The end of Georgia’s EV tax credit led to a 90% decline in sales.

This anti-EV policy trend has been fueled by elements of the petroleum industry, notably the Koch brothers, who may see electric mobility as an increasing threat. It has come just as automakers are producing an increasing number of vehicle types, including vehicles with higher ranges and lower price tags. 

Meanwhile, Oregon has lived up to its motto, “She Flies With Her Own Wings,” by creating its first electric vehicle rebate, worth up to $5,000. 

Forth led the effort to secure this rebate, with a campaign that began in 2014 and culminated when Governor Kate Brown signed the rebate legislation in August 2017. Oregon’s Legislature has long sessions in odd-numbered years and shorter, typically budget-focused sessions in even years. We first introduced rebate legislation in 2015, spent the 2016 session passing legislation to increase utility engagement in transportation electrification, and returned in 2017 with a proposal that was ultimately signed into law as part of HB 2017. 

How did Oregon pass this rebate, and what can other states learn from this success? Our own Director of Government Relations, Jeanette Shaw, recently summarized our “lessons learned” in Washington DC at the Electric Drive Transportation Association Leader Series

From Impossible to Inevitable in Nothing Flat

When we began this work, most legislators were of the opinion that electric vehicles were a fad, a science experiment, or a political statement. Most did not expect serious large scale EV adoption. During the course of our campaign, these attitudes shifted very quickly; unfortunately, they went straight from “this will never happen” to “this is inevitable…so it doesn’t need to be incentivized.” Unfortunately, we’ve seen a similar shift among many of our allies as well. We needed to explain that the technology is getting better and cheaper, sales are growing, and yet this industry still needs public support to reach critical mass. This is a fine line to walk, but it’s really no different than what the solar and wind industries had to do over the past years. It’s important to reinforce the message that nothing is inevitable… after all, by all accounts Betamax was a better technology than VHS, too…

Make it Real

Legislators are unlikely to provide incentives for something they have never seen or experienced. Throughout the campaign, we found that most legislators (and staff) had never driven an electric vehicle, and many had never even seen one. Experience has shown that consumers who drive an electric vehicle have a profound change of attitude, and the same is true of policymakers. We found it was extremely effective to organize ride and drive events at the state Capitol, or even in the home districts of key legislators. During our 2017 ride & drive, Governor Kate Brown stopped by… and we gave away Oregon’s signature Voodoo Donuts. Both helped drive more participation.   

When is a Car Like a Refrigerator?

Oregon, like most states, has a long history of offering rebates for energy efficient appliances, rooftop solar power, and other socially desirable products. However, there is something profoundly different about cars – at least psychologically. Legislators and allies who agreed we need to accelerate EV adoption would quickly jump to incentives for charging equipment. We found it extremely frustrating, but it’s a real phenomenon. We found two arguments to be moderately effective. First: trying to accelerate electric car sales with incentives for chargers is like trying to accelerate rooftop solar with discounts on inverters. Second, and more effectively: discounts on electric cars put more money in the pockets of working people and help reduce the cost of transportation, which is the second highest expense for most families. Nevertheless, we see this argument as a persistent challenge in utility proceedings and legislative discussions across the country. 

Counter the “Expensive Toys for the Rich” Argument

One of the major lessons we learned in 2015 was that electrical vehicles were perceived as “expensive toys for rich people.” This was a huge problem for us, was being effectively exploited by our opponents, and was even turning our allies against us. We first countered with the argument that an “electric dividend” puts more money in the pockets of working Oregonians and their families. We pointed out that half a dozen EVs can be leased for less than $200/month in Oregon, and many are cheaper than the average new car. Frankly, though, none of these arguments were particularly effective.

Ultimately, we were able to move forward only when we included an MSRP cap (to be eligible vehicles must have a base model MSRP of $50,000 or less) and added a “Charge Ahead” rebate of an additional $2,500 for lower income drivers. That Charge Ahead rebate can be applied to a used EV, or “stacked” with the regular $2,500 rebate for a new EV. We also found it was extremely important to create and promote real-world examples of electric vehicles as practical transportation for working people; for example, we launched a low-income EV carshare pilot with a local affordable housing provider, which helped tell this story well. 

Make Environmentalists your Friends

During the 2015 Legislative session, we focused on the economic arguments in favor of electric vehicles. We promoted a report by the Electrification Coalition that showed our rebate proposal would increase Oregon GDP, and commissioned our own research showing that each electric car bought would increase state and local tax revenues up to $2,000 while saving middle-class drivers significant money every year. Frankly, none of that carried much weight.

We needed a lobbying ally that carried substantial weight with legislators. In Oregon, at least, the natural and most effective ally was the environmental lobby. We needed to convince the environmental community to make the EV rebate one of their top priorities. This was surprisingly difficult. Most environmental groups don’t particularly like cars, or car companies. We were aided greatly by our allies in the national environmental groups, particularly NRDC, the Union of Concerned Scientists, and the Sierra Club, all of whom visited Oregon to help make the case for rebates to legislators and to their state colleagues. Ultimately, the Oregon Environmental Council, Climate Solutions, and other state groups were key to our success.

Connect with the Mobility Revolution

Every state has infrastructure needs and is likely looking at funding packages to deal with them in the absence of national leadership. We saw an opportunity in 2017 to connect with that, as Legislative leadership had made it a priority to pass a large transportation funding package. We were able to successfully argue that “modernizing the transportation system” should include support for electric, connected, and shared mobility as well as filling potholes. This made our rebate proposal a small part of a much larger and more expensive transportation bill – and one that was a bipartisan priority. It meant that as negotiators were finalizing a package, and seeing environmental community support, our allies there could insist that the package include EV rebates as well as more traditional ‘asks’ like transit and bike/pedestrian funding. Finally, as Kissinger once observed in a different setting, “It has the added advantage of being true.” 

It Takes a Village – But it’s Worth It

One absolutely critical reason for Forth’s success was our commitment to bring together the broadest possible coalition of stakeholders from the transportation electrification ecosystem – from car companies, charging companies, utilities, environmental groups, the electricians’ union, ride-sharing companies like Uber, and more. We also could not have done this work, and stuck with it over time, without direct financial investment from a few of our most committed members – particularly car companies like Nissan, GM, BMW, and Honda. 

Our total investment in this campaign, over more than three years, was less than $600,000. The legislation we passed dedicates $72 million over six years to the rebate program. By my math, that’s an ROI of more than 120:1. I would humbly suggest that this is an area well worth further investments from automakers and other partners.

It’s Never Over

Oregon’s legislation stated that vehicles purchased after October 6, 2017 would be eligible for rebates, but our state Department of Environmental Quality has proposed waiting several months – creating a potential “dead zone” for EV sales. Our DEQ has also seized on flexibility provided in the bill to consider lowering the program rebate levels before it even launches, and has sketched out a rulemaking process that could take until Summer 2018. Meanwhile, a lawsuit that challenges the rebate’s funding mechanism is also likely to be filed soon. Once we overcome those obstacles, we know it will take an effective marketing campaign for the rebate to effectively drive consumer demand. In other words, to cite another appropriate Kissinger quote:Each success only buys an admission ticket to a more difficult problem.” 

How Oregon Got An EV Rebate - And Why it Matters
The last couple of years have been fairly rough ones for state-level electric vehicle policy. Seven states have eliminated incentives for electric cars, and seventeen have imposed new annual fees...