Electric vehicles to become cheaper in New Jersey after Murphy signs incentives bill

Gov. Phil Murphy signed a bill into law Friday that will give motorists a sizable rebate on a purchase or lease of an electric vehicle, set goals to expand the state's network of charging stations and forces NJ Transit to expand its electric fleet.

The law was supported by environmental and health groups along with several business organizations including car dealers.

"The cash-on-the-hood incentives and infrastructure investment provided by this legislation demonstrate a real commitment to accelerate the electric vehicle market in New Jersey," said James Appleton, president of the New Jersey Coalition of Automotive Retailers.

The measure, signed by Murphy at a ceremony in Trenton, is seen as a cornerstone of efforts to reduce air pollution, including greenhouse gases, in a state that continually receives failing grades for smog.

Pam Frank, CEO of ChargEVC, a trade association, praised the measure but said it has taken too long for New Jersey to catch up to other states. New Jersey has the worst ratio of electric vehicles to charging stations.

"Unfortunately the pace of government lags behind the pace of emissions," Frank said. "That has to change."

To achieve those clean air reductions, motorists will be given one of the best incentive packages in the nation to buy an electric car.

At the center of the law is a rebate of up to $5,000 intended to lower an electric vehicle's sticker price so they are more competitive with gasoline-powered cars.

New Jersey already waives the 7% sales tax on electric vehicle purchases, and the federal government offers a $2,500 to $7,500 income tax credit based on a car's battery capacity.

Base models of some of the cheapest battery-only electric vehicles in the U.S. have a sticker price of $30,000 to $35,000. The cheapest Tesla Model 3, the best-selling electric car in the country, has a sticker price of almost $40,000.

The state rebate would be funded by $30 million annually from an existing clean energy charge on utility bills and from money raised through a regional cap and trade program.

It would give consumers $25 per mile of the eligible vehicle’s electric power range, up to a maximum of $5,000 for cars with a sticker price of $55,000 or less.

"It would put it up there as one of the best [incentive] plans, no question," said Loren McDonald, an electric vehicle analyst and consultant who runs the website EVAdoption.com. "You have many models getting well over 200 miles in range, so you will reach the $5,000 rebate."

The rebate would also be offered on plug-in hybrid model purchases until the end of 2022. With the median electric range of hybrids at about 22 miles, the rebate would be about $550, much lower than battery-only electric vehicles.

McDonald said that's shortsighted, because plug-in hybrids — a combination of a gasoline engine and electric motor — still make up 60 percent of all electric vehicle models available for purchase in the U.S.

"The New Jersey approach is clearly penalizing plug-in hybrid, which I don't think is in the overall best interest of the state or its residents," he said.

The law also sets goals to build more charging outlets to allow for longer-range driving — something that electric vehicle drivers have spent years calling for.

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The fear of running out of power — known as "range anxiety" — is often cited by motorists as one of the top reasons they don't buy an electric vehicle.

New Jersey ranked seventh in the U.S. with 26,000 electric cars as of the end of 2018, according to EVAdoption.com. But it ranked last in the number of charging outlets (745) per electric car.

That may soon change, as Gov. Phil Murphy's administration has embarked on a plan to build 827 new charging outlets across the state, using $3.2 million from a settlement with Volkswagen over the automaker's fraudulent emissions data.

Various drafts of the bill have called for 400 to 600 fast-charging stations at 200 to 300 public locations throughout the state. These stations can deliver 60 to 80 miles of range after 20 minutes of charging.

The law also calls for:

1,000 level-two chargers, which add 10 to 60 miles of range per hour of charging, by 2025.

30 percent of all apartment, condo and town house developments to have chargers by 2030.

50 percent of all franchised hotels and motels to have chargers by 2030.

all non-emergency state-owned cars and small trucks to be electric by 2035.

NJ Transit to buy only electric-powered buses by the end of 2032.

Introduced almost two years ago, the bill has made its way through the legislative process at a slow pace, even by Trenton standards.

"If we're going to take air pollution and climate change seriously, this is something that has to be done," said Doug O'Malley, director of the advocacy group Environment New Jersey.

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Among the supporters of the bill are the New Jersey Coalition of Automotive Retailers and the New Jersey Gasoline and Convenience Store Association.

Sal Risalvato, executive director of the gas station association, said his members support the legislation but want to see incentives given to service stations to install electric chargers and other alternative fuel options like hydrogen.

"Anything that promotes EVs is fine with us, because it will still bring the cars into our businesses," he said.

Scott Fallon covers the environment for NorthJersey.com. To get unlimited access to the latest news about how New Jersey’s environment affects your health and well-being, please subscribe or activate your digital account today.

Email: fallon@northjersey.com Twitter: @newsfallon