14 December 2023
LANSING — Michigan Gov. Gretchen Whitmer said Wednesday she will ask lawmakers to approve a $25 million tax rebate program to boost vehicle sales in Michigan, particularly of electric- or hybrid-powered cars and trucks made in unionized plants.
The Democratic governor will call for the funding in her January State of the State speech. She outlined a different EV rebate proposal in her 2022 address and a sales tax break on EV purchases in her 2023 speech. Neither became law.
Under the latest plan, the following rebates would be applied to the final price of a new vehicle:
$2,500 on a battery electric or hybrid manufactured in a unionized factory;
$2,000 on an electric or hybrid made in a nonunionized facility;
$1,500 on a gas-powered vehicle in a unionized plant; and
$1,000 on a combustion vehicle in a nonunionized factory.
“MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys,” Whitmer said in a statement. “Michigan’s auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract. Now, let’s keep making the world’s best cars and trucks while lowering costs for families by thousands of dollars. Together, we will build and lead the future of mobility and electrification.”
Used vehicle purchases would be ineligible for the rebate, which would last until the $25 million is gone. The $25 million would cover between 10,000 and 25,000 vehicles, roughly the number of new vehicles that are sold in Michigan in a week or two.
Combined with a $7,500 federal credit, Whitmer said, residents could get up to $10,000 off the price of certain EVs or hybrids. The dealer would get a tax rebate voucher from the state Department of Treasury and subtract that amount from the final price.
The governor’s office released supportive statements from the Michigan Automobile Dealer Association; MICHauto, an initiative of the Detroit Regional Chamber; and the BlueGreen Alliance, a partnership of unions and environmental groups. Her push came as EV growth is starting to slow and fall short of the auto industry’s lofty ambitions to transition away from combustion engines.
The Biden administration recently proposed new rules that would limit EV buyers from claiming the full tax credit if they purchase cars containing battery materials from China and other countries that are considered hostile to the U.S.
— The Associated Press contributed.