Colorado passed a new law that ramped up generous EV state tax credits for both purchases and leases from July 1, and here’s what resulted.
Colorado’s EV state tax credits
Governor Jared Polis (D-CO) signed House Bill 23-1272 into law on May 11. From July 1, all Colorado residents who purchase or lease an EV with MSRP up to $80,000 qualify for an EV tax credit of $5,000. The tax credit will be in place until January 1, 2025, when it then begins to drop incrementally until 2029.
It was a big jump from Colorado’s previous $2,000 state EV tax credit for new EV purchases and $1,500 for two-year leases.
And keep in mind that the $5,000 is on top of the federal tax credit of $7,500 – so that’s a $12,500 EV tax credit for Colorado residents – sweet.
So it’s not surprising that new data released by the Colorado Automobile Dealers Association reflects that Colorado saw a record 17.1% of total EV purchases in the third quarter, up from 13% for the first half of 2023.
Colorado is now fifth in the US for EV sales, and 1 in 5 cars sold in the state are now electric.
The data doesn’t distinguish EVs from gas cars for traditional OEM brands, but on the EV-only front, Rivian saw a 70.3% year-over-year registration jump (from 286 to 487 EVs) – the largest percentage share jump (but its market share in Colorado is still less than 1%). And Tesla saw a 79.2% rise in registrations in the same period (from 2,015 to 3,611 EVs).
As for 2023 to date, the new data shows that Tesla was the top seller in Colorado in the first three quarters among all brands in the Luxury and Sports Cars and Small Luxury SUVs categories. The Model Y dominated in the BEV, PHEV, and hybrid category, with 18% of the market share in the year-to-date through September.
Matthew Groves, CEO of the Colorado Automobile Dealers Association, said, “While we have a long way to go, [this] is evidence that business and government in collaboration are a powerful force in creating generational change.”
I expected the new law to boost EVs sales in Colorado, so it makes me happy to see it in numbers. Great policy stimulates positive results. The Polis administration has set a goal to have nearly 1 million EVs on the road by 2030. Keep it up, Colorado.
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