Colorado has emerged as a frontrunner in the nation's electric vehicle market, leaving California in the dust. According to a recent report by the Northeast States for Coordinated Air Use Management, electric vehicles accounted for a remarkable 25.3% of new vehicles sold in Colorado during the third quarter. In contrast, California took the second spot with electric vehicles making up 24.3% of new car sales.

Key Insights on Colorado's Electric Vehicle Landscape

Vehicle Types in Colorado

In Colorado, the electric vehicle market is dominated by full electric vehicles, with 82% of the EVs sold being of this type. Plug-in hybrid electric vehicles accounted for 18% of the sales. This distribution showcases the state's preference for zero-emission vehicles. The state's comprehensive plan for reducing greenhouse gas emissions and combating climate change has set a goal of having at least 940,000 electric vehicles on the roads by 2030. This ambitious target indicates Colorado's commitment to sustainable transportation.

Impact of Incentives

The recent data shows that the demand for electric vehicles in Colorado is on the rise. Governor Jared Polis emphasized this in a statement, highlighting how competitive state and federal rebates are drastically cutting the cost of an EV and saving people money. These incentives have played a crucial role in making electric vehicles more accessible and affordable for Coloradans. Will Toor, the executive director of the Colorado Energy Office, also stressed the importance of electrifying transportation as a key part of the state's efforts to achieve net-zero emissions statewide by 2050. Investments in charging infrastructure and generous incentives have made electric vehicles an attractive option for consumers.

Current EV Presence in Colorado

In January 2023, there were nearly 73,000 EVs on the roads in Colorado, accounting for about 7.86% of all the vehicles. This significant number reflects the growing popularity of electric vehicles in the state. A report released in October by the Colorado Automobile Dealers Association further confirmed Colorado's position as a top performer in EV sales for the first nine months of the year.

Federal Tax Credit Considerations

President-elect Donald Trump's plan to roll back federal tax credits for EVs is expected to have an impact on sales. However, John Helveston, an assistant professor at George Washington University who specializes in electric vehicles and policies, doubts that Republican lawmakers will eliminate the tax breaks from the Inflation Reduction Act. Many congressional districts benefit from these tax credits, making it unlikely for them to be completely abolished.

State Tax Credits and Rebates

Coloradans are eligible for a $5,000 state tax credit for a new EV with a manufacturer's suggested retail price under $80,000. Those with a suggested retail price under $35,000 can receive an additional $2,500. This credit is available through the end of this year and will drop to $3,500 starting in 2025. Income-qualified Coloradans can also take advantage of a $6,000 rebate through the Vehicle Exchange Colorado program for a new EV purchase or lease and a $4,000 rebate for a used EV purchase or lease. These rebates provide an added incentive for Coloradans to choose electric vehicles.

Additional Federal Tax Credit Opportunities

Coloradans might also be eligible for a $7,500 federal tax credit for a new EV lease and for the purchase of certain EV models that meet specific manufacturing requirements. A $4,000 federal tax credit is available for used EV purchases and leases. These tax credits further enhance the affordability of electric vehicles and encourage more people to make the switch.Get more business news by signing up for our Economy Now newsletter.