Vermont transportation officials report incentives spurred EV adoption but programs are largely exhausted

Andrea Wright, Environmental Policy Manager at the Vermont Agency of Transportation, and Patrick Murphy, State Policy Director at VTrans, told the House Transportation Committee on Feb. 5 that the agency’s electric-vehicle incentive programs have supported thousands of cleaner vehicles and steered most funding to lower-income Vermonters, but the programs have largely exhausted their budgets and future funding is uncertain.

Wright said VTrans has “issued over $27,000,000 in incentives” for more than 6,000 vehicles since 2020 and that the programs have enabled the purchase of “almost 4,000” all-electric vehicles and substantial numbers of plug-in hybrids, hybrid electric vehicles and e-bikes. She also reported nearly 18,000 EVs registered in Vermont in preliminary fourth-quarter data.

The incentives include several programs established since 2020. Wright told the committee that two programs — the new PEV program, Replace Your Ride and Mileage Smart — were closed to new applications on Oct. 8 because application volume accelerated in July and September and funds were exhausted sooner than anticipated. VTrans moved $415,000 from administrative and other program funds to ensure completed applications were paid, she said.

Murphy told lawmakers that the agency is tracking EV penetration against the state’s targets. “The third quarter of last year … we were at 13.6%,” he said, and “the first month of October 2024, we’re at 14.6%,” figures he gave as the most recent cleaned estimates available at the briefing.

Committee members pressed staff on program design and equity. Wright and Murphy said the programs were income-based and that a large share of funding flowed to lower-income households: while 64% of participating households were in lower-income categories, roughly 79% of total funding went to those households, agency staff reported. Income thresholds cited for some programs were $90,000 or below for married filing jointly households, $75,000 or below for single heads of household with dependents, and $60,000 or below for individuals. The Mileage Smart used an eligibility threshold based on 80% of area median income.

Several program features and recent legislative changes were highlighted. VTrans limited incentives to one per lifetime per individual; it raised a minimum electric range threshold from 20 miles to 30 miles to reduce incentives for low-range plug-in hybrids; it added a $40,000 purchase price cap for the used-vehicle program; and it created a $5,000 automatic incentive for households eligible for SNAP in the lowest income band. The agency also implemented a two-year minimum lease term for leased vehicles receiving incentives.

Program administration and outreach were credited with helping uptake. VTrans said Drive Electric Vermont and the Center for Sustainable Energy provided outreach, dealer and consumer assistance, translated materials, events and an online dashboard. The state’s programs were described as more narrowly targeted to low-income households than incentive programs in some neighboring states.

Committee members asked about the resale and geographic distribution of vehicles. Staff said there is no requirement that a leased vehicle be resold in Vermont, and that resale patterns will depend on automaker compliance strategies tied to regulations such as Advanced Clean Cars II. Staff showed maps indicating higher absolute counts of incentives in more populated areas and noted that results normalized per capita would look more geographically distributed.

Looking ahead, Wright told the committee the administration is exploring using net proceeds from the Regional Greenhouse Gas Initiative (RGGI) — above a threshold amount — to fund incentives in future years. Staff described the RGGI proceeds as allocated currently to energy-efficiency and weatherization activities and said a draft spending plan would be required to redirect net proceeds above a chosen threshold to vehicle incentives.

No committee votes were recorded during the presentation. Agency staff said they are drafting language to request midyear budget flexibility and that whether incentives continue will depend on budget decisions by the General Assembly and any administrative proposals the governor may send.

The presentation and committee discussion documented remaining balances in small programs: roughly $300,000 remained in a municipal/business fleet electrification pilot and about $20,000 remained in the e-bike voucher program, according to staff. The agency also stated that a previously submitted EPA grant application had not been awarded, and that other transfers — including a $1 million addition and a $400,000 transfer between programs made during the prior year — had been used to sustain low-income-targeted assistance.

Agency staff recommended that, if funding is renewed, future incentives continue to prioritize lower-income households and vehicle types that deliver the largest greenhouse-gas reductions (battery-electric vehicles) and that leasing incentives be reconsidered in structure and amount to limit quick depletion of funds.

Wright and Murphy provided committee members with data appendices and said they would follow up with additional survey results and implementation questions on request.