Brian Hedengren needed a new car. Minor issues bugged his 2008 Hyundai Sonata, and he did not want to wait for them to become serious. Last fall, as he researched his options, including electric cars, a dealer told him about a state program offering rebates of up to $9,000 to qualified Washingtonians to buy or lease an electric vehicle.
“ I was already interested in an EV,” Hedengren said. The rebate “sealed the deal.”
After qualifying for a $2,500 rebate from the state, along with a federal tax credit and state sales tax exemption, Hedengren and his wife paid $16,500 for a white 2022 Kia Niro — a newer car than he otherwise could have purchased, Hedengren said. He estimated that driving an EV saved him about $100 a month.
From last August through October, the Washington Department of Commerce offered $45 million in rebates to lower-income residents to help them buy or lease an electric vehicle. The initiative arose as part of the state’s broader push to electrify its transportation system and to ensure those transformations included vulnerable and overburdened communities.
But interviews and program data show that the program struggled to target those communities and meet its goal of directing 40% of funding to vulnerable populations and overburdened communities. The results raise questions about who benefited from the rebates and reveal the messiness of pursuing equity in environmental initiatives.
One recipient, Cascade PBS found, reported living in a multimillion-dollar home on Mercer Island. Meanwhile, preliminary results from an audit of 10% of program beneficiaries prompted the state to seek at least $176,500 so far in repayments from unqualified recipients.
Commerce director Joe Nguyen told Cascade PBS in an interview that if the state fixated too heavily on meeting certain metrics, it risked never getting anything done.
“I’ll be honest with you: Whether we hit the [40%] goal or not, I feel great that we were able to get money out quickly to people,” Nguyen said. “Our programs were structured to be mindful of equity and the impacts of it,” he added, but “there has to be a balance.”
“Maybe we don’t hit all of our targets,” he continued, but “real people got access to cars that they otherwise would not have been able to get access to. And we did it pretty quickly.”
Going electric
In Washington, 39% of earth-warming greenhouse gases come from transportation — more than from any other sector. To reduce those emissions, the state is investing in electric buses, building EV charging stations and urging people to switch to electric cars, among other strategies. A state mandate requires that all new passenger vehicles sold in Washington by 2035 be electric.
Historically, EVs cost more than comparable gas cars, making them less accessible to lower-income people. At the same time, low-income communities and communities of color disproportionately bear the impacts of climate change, transportation noise and pollution.
The state’s 2023-2025 budget set aside $50 million from Washington’s Electric Vehicle Incentive Account, which was created in 2022 using state general funds, to offer rebates to people to purchase or lease EVs. It required the program to serve those who had the fewest resources yet suffered the worst effects of pollution and climate change, including low-income individuals, communities of color and overburdened communities.
Commerce hired a contractor, San Francisco-based firm Energy Solutions, to research, design and run a program to distribute the rebates. Ultimately, Energy Solutions opted to limit rebates to Washingtonians who earned less than 300% of the federal poverty line ($77,460 for a family of three, for example) or were enrolled in public assistance programs, such as Apple Health or the Women, Infants and Children (WIC) nutrition program.
The firm decided on a design with minimal barriers: At the dealer, a customer would fill out paperwork self-declaring their income or enrollment in assistance programs. They would not need to provide documentation. The instant rebate meant customers did not have to pay full price and then seek reimbursement — a process that could put EVs out of reach.
Afterward, 10% of customers, selected at random, would be audited.
Hedengren said that he earned about $75,000 a year working for Yakima County in its public housing division. For a family of five — he and his wife have three children — his income readily qualified him for a rebate.
“It was really quick,” Hedengren recalled of filling out paperwork at the dealer. He did not have to bring tax forms or other records: “It was just based on my word.” But, he mused, it would be easy if someone wanted to abuse the system, and he hoped that the state was checking.
Eligible recipients could receive $9,000 to lease a new EV for three years, $5,000 to buy a new EV or $2,500 to buy or lease a used EV — the largest amounts of any rebate program in the country. Energy Solutions capped the market value of eligible EVs at $90,000.
The rebate program launched in August, and Energy Solutions initially hoped the money would last through May 2025, according to its program implementation plan. But customers flocked to dealers in droves, and by Oct. 22, all $45 million had been distributed to 6,200 Washingtonians. Commerce reported that rebates averaged $7,400.
The vast majority of recipients — 4,137 customers — used the rebates for three-year leases. About 1,220 purchased a new EV, and 775 leased or purchased a used EV, a February report from Energy Solutions to Commerce, obtained via public records request, showed. The most popular cars were Teslas, which accounted for nearly 40%, or $16.1 million, of rebate claims. The next most popular cars were Nissans (12%), followed closely by Kias (11%).
The program also offered incentives to dealers. Any dealer that also sold gas cars received $100 for every EV leased or sold through the program. Nearly 250 dealers across the state participated, and Commerce paid out $397,000 in dealer incentives.
For its work on the program, Energy Solutions made up to $3.28 million, state records show, including $450 for every rebate.
Ryan Bird, a director at Energy Solutions who worked on the rebate program, said he did not have additional comments or information beyond what Commerce had already shared.
“We are proud to have worked with Commerce on an innovative program design that lowered barriers for low-income customers, helped dealers increase EV sales and furthered Washington's climate goals,” he said. “The program helped thousands of low-income Washingtonians who would not have had access to EVs without it.”
EVs for all?
From the beginning, both the state and Energy Solutions declared that the goal of the program was to improve equitable access to EVs.
“We’re significantly lowering the entry point, opening the door to EVs for people of modest incomes as we continue paving the way to a clean transportation future for all,” then-Gov. Jay Inslee said in an April 2024 news release announcing the program.
Energy Solutions declared in its implementation plan that the rebates aimed to “overcome the financial barriers to EV ownership for Washingtonians who live in overburdened communities or are a part of vulnerable populations, are low-income, or who have jobs that require long driving distances or expose them to high levels of pollution.”
But while qualifying recipients by income did help address income-based disparities in EV ownership, it did not necessarily ensure the rebates reached overburdened and vulnerable communities.
“The program team, at the time, believed we were delivering almost all of the program’s benefits to vulnerable populations while simultaneously striving for 40% of the rebates to be for residents of overburdened communities,” Commerce spokesperson Amelia Lamb said.
Ultimately about $10.3 million, or 23% of rebate dollars, went to people living in communities that met the state’s definition of “overburdened,” according to Commerce.
Data obtained from Commerce, along with interviews with recipients, raise questions about not just the validity of information some customers submitted but also their need for the rebate in the first place.
One recipient who reported income of zero dollars and enrollment in Apple Health received $9,000 to lease a new Tesla Model 3. The address they listed matches a home on Mercer Island, one of Washington’s wealthiest cities, which the real estate website Zillow valued at $6.3 million. The recipient told Cascade PBS they were “not interested in speaking at all.”
Michelle Wright, a realtor living in Graham, had always considered herself an EV “basher.” But after a friend got an EV using the rebates and let her drive it, she decided they were fun.
“I’m like, ‘Oh my God, that’s so quiet,’” Wright said. “It’s so zippy.”
Wright called her friend’s salesperson and told him she would get an EV if she received the rebate too. After qualifying for a $9,000 rebate, she wrote a check for $11,700 rather than paying monthly for a three-year lease on a new Nissan Ariya. She still had her two gas cars — a Camaro convertible and Toyota Highlander — and said she had no intention of keeping the Ariya after the lease expired.
Asked about her income, which she reported as $24,000 annually for a household of one, Wright said, “I have a good CPA and on paper I make way less than I really make, so I hit the income threshold.” She initially told Cascade PBS that she was not enrolled in any public assistance programs, but after being reminded she had checked the box for Apple Health, said, “Yes, yes, yes … I forgot about that.”
Just because some people might appear to take advantage of an incentive program does not mean that everyone does.
“I definitely think the program helped people get into new, reliable safe transportation that they otherwise had no access to,” said Adam Green, an EV salesperson at Advantage Nissan in Bremerton. “Some of these people coming in could barely afford a cell phone payment, let alone a car payment.”
Nevertheless, Green worried that the rebate program’s design did not foster those customers’ long-term access to an electric vehicle. Because the program’s largest incentive, $9,000, could be used only to lease a new EV, compared to $5,000 to purchase one, rebates made leasing a more affordable option. But after three years the lease would expire, and the car had to be either purchased or returned.
“They’d have to pay for the rest of the car at that point, but who knows if they can pay for it?” Green said. With the rebate, some customers paid as little as $100 a month to lease their EV, Green said. Car payments, even on a used vehicle, were unlikely to be as low.
“After three years they’re right back where they started,” Green said. “It’s a super-temporary fix.”
Lamb, the Commerce spokesperson, said the agency expected many rebate households to buy vehicles at the end of their leases. If they did not, she said, the EVs would enter the used market, helping to lower prices.
Despite the rebates, EVs remain out of reach for many. One of the biggest impediments is access to vehicle charging. People living in apartments or rental homes have less access to reliable home charging than people living in single-family homes. Instead, they have to rely on chargers at work or use public ones, of which Washington has nowhere near enough.
“The reliability of public EV charging remains a huge problem for EV owners,” said Don MacKenzie, an associate professor of civil and environmental engineering at the University of Washington. “The state may get a bigger bang for their buck by investing in reliable public EV charging.”
Commerce director Nguyen also suggested that charger access might be “more of a hindrance to people getting EVs” than vehicle cost. The state could make EV incentives “much more impactful” for overburdened communities, he said, if it helped them install chargers at home.
Accountability
To verify rebate recipients’ qualifications, a subcontractor for the state randomly selected 624 participants, or 10% of all customers, to audit. It either verified customer household size and income or confirmed their participation in a public assistance program that automatically qualified them for the rebate.
Commerce has yet to release the final results of the audit, which remains unfinished despite predictions it would be done in the spring.
“We’ve had some customers who are understandably skeptical about sharing personal income information – there are so many scams, and folks want to make sure the inquiries are legitimate,” Lamb said. Commerce does not have a date for the audit’s completion.
So far, verifications are complete for 512 of the 624 recipients. Of those, 472, or 92.2%, were found eligible. Fifteen, or 2.9%, had income within the allowed 10% margin of error. Finally, 25, or 4.9%, were found ineligible.
The state was still trying to verify information for the remaining 109 rebate recipients.
Commerce estimated that the total error rate — the percentage of participants who did not qualify for the program but received rebates nonetheless — at 8.7%. That figure was consistent with error rates for other benefit programs, Lamb said, citing the National School Lunch Program (12%), Medicaid (11%), SNAP (6%) and others.
Commerce sent letters on June 3 requesting repayment from the 25 respondents who were ineligible, seeking a total of $176,500. They would have until July 31 to repay or start a payment plan.
It would also send repayment request letters to the 109 recipients who had not yet provided their income information, who had until June 30 to provide information or until July 31 to start returning payments. According to Lamb, they could owe the state up to $747,000.
