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State transportation officials review electric-vehicle incentive programs as funds run low
Summary
State transportation staff told the House Committee on Transportation on Jan. 21 that Vermont’s EV incentive programs have supported thousands of vehicle incentives but that many programs exhausted funding in October, and officials outlined program design, funding history and next steps including NEVI charging deployment.
State transportation officials updated the House Committee on Transportation on Jan. 21 about Vermont’s electric-vehicle incentive programs, saying the state has funded thousands of incentives since 2020 but that many programs ran out of money in early October.
Patrick Murphy of the Agency of Transportation, who directs the state's EV efforts, told the committee that incentive programs were explicitly designed to prioritize lower-income households and to accelerate adoption: “EV purchase incentives were included as critical pieces of that transition in the Vermont Climate Action Plan,” he said. Murphy said program modeling called for tens of thousands of plug-in vehicles to meet climate goals and that, as of the third quarter of last year, Vermont had “about 17,000 vehicles or so,” leaving the state roughly 10,000 vehicles short of the modeled target.
Murphy walked the committee through the major programs, the funding history and the steps taken in 2023 and 2024 to get incentives to households more quickly. Key points presented to the committee:
- Funding and scale: Act 184 of 2022 directed the largest single infusion of funds: $12 million for a new PEV (plug-in electric vehicle) incentive program, plus $3 million for the MileSmart program and $3 million for the Replace Your Ride program. Murphy said roughly $27 million in lifetime funding has supported more than 6,000 incentives since 2020, and that about 40% of vehicles registered in Vermont since that period were funded through state incentive programs.
- Program design and changes: The state focused incentives on lower-income households, added a head-of-household income category in 2023, and in mid-2024 tightened some guidelines to prioritize battery electric vehicles for moderate-income households while preserving hybrid eligibility for SNAP-eligible participants. The Replace Your Ride program was increased from $3,000 to $5,000 in 2023 to raise participation.
- Administration and partners: The Center for Sustainable Energy administers several programs under contract; the state has worked with Capstone (administrator for MileSmart), Drive Electric Vermont and dealerships to deliver incentives largely at the point of sale. Murphy said program administration was adjusted in 2024 to speed reimbursements after earlier delays.
- Market and data: As of October 2024 new-vehicle sales in Vermont were about 14.6% electric for that month, and the state saw a quarterly registration total of roughly 17,000 EVs at the end of Q3. Murphy said he expected updated DMV registration data for October–December within the next week or so. He also described national and federal signals relevant to incentives — for example, the Inflation Reduction Act’s tax credits and the new clean commercial vehicle credit, and uncertainty about how those federal incentives will persist.
- Charging infrastructure and NEVI: Murphy said the Agency is contracting under the National Electric Vehicle Infrastructure (NEVI) program and has awarded initial contracts; the first NEVI-funded sites were expected in the ground in April. He emphasized that charging availability and home-charging access for renters and multifamily residents remain barriers to broader adoption.
Committee members asked about several operational details, including income limits for different programs, how leasing uses incentives (the state requires a minimum two-year lease), the effect of incentives on dealership behavior and reimbursement timing for dealers. Murphy said the application portal closed Oct. 7 and that the state honored applications submitted within administrator-established windows (dealership-submitted invoices had a 15-day allowance; consumers who purchased outside dealerships had 60 days to apply). He said most dealer reimbursements had been made but could not confirm every single payment.
Murphy and committee members noted that a federal Climate Pollution Reduction Grant the state sought was not awarded, which contributed to the programs’ funding shortfall. Committee members asked for additional market information since October to understand whether EV sales have dropped without state incentives; Murphy recommended inviting the Vermont Auto Dealers Association to testify on sales and leasing trends.
Murphy told members the agency could re-start programs if the legislature authorized funds, but that doing so requires amendments to existing grant agreements with program administrators and time to update materials; he estimated a month to six weeks after appropriation and contracting before funds would be moving back into the field.
No legislative action on program funding was taken at the meeting. Committee members said they would consider follow-up testimony (including from dealers) and await the governor’s upcoming budget for any additional proposals.
