For Immediate Release: December 29, 1998
Media Contact: Claudia Chandler -- 916 654-4989

California offers license fee incentive program for AFVs

Beginning January 1, 1999, people spending more to purchase a vehicle that runs on alternative fuels will get a reduction on California's vehicle license fee.

The lower license fee is available on new, light-duty, alternative fuel vehicles (AFVs) which cost more than similar, conventionally fueled models. To be considered, the AFV must be certified as an ultra-low emission vehicle or cleaner. At present, over fourteen models of compressed natural gas-fueled vehicles and electric battery-powered vehicles qualify.

The program is intended to eliminate any disincentive caused by higher fees sometimes paid by AFV owners. Under the new law, the California Energy Commission determines the incremental cost of these low-emitting AFVs. The incremental cost-the difference between the cost of a comparable gasoline or diesel-fueled vehicle and the AFV-will be exempted from the license fee.

If, for example, a gasoline-fueled pickup sells for $24,000 and the electric version of the same pickup sells for $34,000, the incremental cost of the AFV would be $10,000. Under the new program, the vehicle license fee would be collected only on the $24,000 figure. To the AFV owner, the difference means a savings of $200 the first year for the more expensive AFV.

The program, established by Senate Bill 1782 which was authored by Senator Mike Thompson, runs from January 1, 1999 to December 31, 2002. The state's vehicle license fee, collected by the California Department of Motor Vehicles, is two percent of the vehicle's original sales price the first year, and is adjusted to the market value for subsequent years.

Questions regarding this new AFV purchase incentive program may be directed to John Moore at the California Energy Commission at (916) 657-3950, or sent via e-mail to:

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