Colorado, a state known for its stunning landscapes and outdoor adventures, is rapidly becoming a hub for electric vehicle (EV) enthusiasts. The journey began when Governor Jared Polis signed House Bill 23-1272 into law on May 11, ushering in a new era of generous EV state tax credits. With these incentives, Colorado residents now have more reasons than ever to embrace electric mobility. In this article, we’ll explore the impact of Colorado’s EV state tax credits and how they are fueling the growth of EV adoption in the state.
Colorado’s EV State Tax Credits: A Generous Boost
Effective July 1, Colorado residents have been enjoying substantial EV state tax credits aimed at making EV ownership more accessible. The key highlights of these tax credits include:
- $5,000 Tax Credit: Residents who purchase or lease an EV with a Manufacturer’s Suggested Retail Price (MSRP) of up to $80,000 qualify for a $5,000 tax credit.
- Duration: This tax credit will remain in effect until January 1, 2025, providing ample time for residents to take advantage of the incentive.
- Gradual Reduction: After 2025, the tax credit begins to decrease incrementally until 2029.
A Significant Increase from the Previous Incentives
These new incentives represent a substantial increase compared to Colorado’s previous EV tax credits. Prior to this legislation, residents were eligible for a $2,000 state EV tax credit for new EV purchases and a $1,500 credit for two-year leases. The boost to $5,000 is indeed a game-changer, especially when combined with the federal tax credit of $7,500. This means that Colorado residents can benefit from a remarkable total tax credit of $12,500 when purchasing an eligible EV.
Impressive Results: Record EV Adoption
The impact of these generous tax credits has been nothing short of remarkable. Recent data released by the Colorado Automobile Dealers Association reveals a surge in EV adoption in the state. Here are some key highlights:
- Record-Breaking Quarter: Colorado witnessed a record 17.1% of total EV purchases in the third quarter of the year. This marks a significant increase from the 13% recorded in the first half of 2023.
- Fifth in the US: Colorado has now secured its place as the fifth state in the US for EV sales, showcasing its growing commitment to sustainable transportation.
- 1 in 5 Cars: An impressive statistic is that one in every five cars sold in Colorado is now electric, signaling a shift towards cleaner and greener transportation options.
Impact on EV Brands
While the data does not differentiate between EVs and traditional gas-powered cars for established OEM brands, it provides valuable insights into the EV-only market. Key observations include:
- Rivian’s Soaring Growth: Rivian, an emerging player in the EV market, experienced a remarkable year-over-year registration jump of 70.3%. While its market share in Colorado remains below 1%, this surge is noteworthy.
- Tesla’s Dominance: Tesla, a pioneer in the EV industry, witnessed a substantial 79.2% increase in registrations during the same period. This indicates that Tesla continues to be a popular choice among Colorado residents.
Tesla’s Impressive Performance in 2023
The data for the year-to-date through September reveals Tesla’s strong presence in Colorado’s EV landscape. Here are some noteworthy statistics:
- Top Seller: Tesla emerged as the top seller in Colorado in the first three quarters of 2023, surpassing all other brands in the Luxury and Sports Cars and Small Luxury SUVs categories.
- Model Y Dominance: Among battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrids, the Tesla Model Y dominated the market with an 18% market share.
A Collaborative Effort for Change
Matthew Groves, CEO of the Colorado Automobile Dealers Association, emphasized the significance of collaboration between businesses and government in driving generational change. He stated, “While we have a long way to go, [this] is evidence that business and government in collaboration are a powerful force in creating generational change.”
Empowering Colorado’s EV Revolution
Colorado’s ambitious EV state tax credits have proven to be a catalyst for the state’s EV revolution. The substantial incentives, coupled with the growing availability of electric vehicle models, have ignited a surge in EV adoption. As Colorado strives to build a sustainable and eco-conscious transportation ecosystem, the generous tax credits serve as a shining example of how policy measures can drive meaningful change. With one in five cars sold in the state now being electric, Colorado is well on its way to becoming a model for the future of mobility.
