The news isn’t good for many potential buyers of electric vehicles in Oregon. Not only will it be more expensive to buy an EV starting next month thanks to the expiration of generous state rebates and federal tax credits, but it also could be more expensive to use one.
In recent years, Oregon has been at the forefront of EV adoption as one of the top states in the nation in the percentage of EV sales – despite the high price tag of electric cars and trucks. The state has registered more than 117,800 EVs as of April, the latest data available. About 34,000 of the EVs registered in Oregon are plug-in hybrid electric vehicles.
Part of that sales growth is due to the more than $100 million in rebates awarded by the state since 2018 to ease the sticker shock for people buying or leasing an EV. As of this spring, the average electric vehicle price of $59,205 is approximately 21.5% higher than the average gas-powered vehicle price of $48,699. Insuring an EV also is also more expensive.
But next week, the Oregon Department of Environmental Quality will suspend its standard EV rebates program because it’s out of money. Buyers will have until Sept. 8 to buy or lease a new, electric battery or plug-in hybrid electric vehicle or a new zero-emission motorcycle to qualify for the rebate of up to $2,500.
The so-called “charge ahead” rebate for lower-income buyers will remain available for both new and used vehicles: a $5,000 rebate for used EVs and up to $7,500 for a new EV. As of Tuesday, more than $17million is still available for those rebates and there is no application deadline.
Federal EV tax credits, which stem from the mammoth Inflation Reduction Act signed into law by President Joe Biden in 2022, will also expire in September.
Most taxpayers are eligible for a federal tax credit of $7,500 for a new EV and $4,000 for a used EV until Sept. 30. They can claim the credit only if the vehicle is bought or leased before the deadline. They also can stack state and federal rebates, assuming they make the purchase in time.
The federal EV credits were suspended in July as part of President Donald Trump’s budget reconciliation package — the so-called Big Beautiful Bill. In his “unleashing American energy” directive, Trump has called for an end to electric vehicle sales targets and an expansion of fossil fuel production in the U.S.
If losing the state rebates and federal credits isn’t enough, Oregon legislators now want EV users to soon pay a fee per mile driven to support the state’s road maintenance. That fee is part of the state transportation package passed by the Oregon House on Monday.
The proposal, which now heads to the Senate for a vote in the coming days, also would increase the state’s 40 cents a gallon gas tax by 6 cents, boost title and registration fees and double the state’s 0.1% payroll tax for transit for two years.
Environmental advocates, including some legislators, say the EV fee per mile requirement could put another damper on Oregon’s EV sales — and on the state’s efforts to cut greenhouse gases from transportation.
“The algorithm that is in this bill, meaning the formula to calculate the road usage charge, is inappropriate,” said Rep. Mark Gamba, D-Milwaukie. “It’s worse for hybrids because whoever wrote the language didn’t really think through the aspect that hybrids would also be buying gas and therefore would be taxed the gas tax.”
If approved by the Senate, the fee per mile for EVs wouldn’t go into effect for at least two years, Gamba said, giving legislators time to fix how it’s calculated and make sure it’s equitable.
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