Colorado EV Sales Surge to 32.4% Amid Expiring Tax Credit Rush
UPDATE: Colorado has witnessed a monumental surge in electric vehicle (EV) sales, with 32.4% of new cars sold in the last quarter being electric. This unprecedented jump comes as Coloradans rushed to secure expiring federal tax credits before the deadline on September 30, 2023.
In a remarkable shift, sales of EVs and plug-in hybrids skyrocketed from 24.2% in the second quarter to a record-breaking level, surpassing the previous high of 31.5% at the end of 2024. The demand was fueled by a $7,500 federal subsidy available at the point of sale, prompting consumers to crowd EV dealerships during the final months of the incentive.
During the months of July, August, and September, fully electric vehicles accounted for 26.4% of new car sales in Colorado, while plug-in hybrids contributed 6%. These cars are recognized as clean energy vehicles under both federal and state regulations. Traditional hybrids, like the Toyota RAV4 Hybrid, made up 12.6% of sales, indicating a slight decline from the previous quarter.
Gov. Jared Polis expressed his enthusiasm about the shift, stating,
“Coloradans and the free market are saying loud and clear that affordable, clean and efficient electric vehicles are here to stay.”
He emphasized that Colorado is leading the nation in electric vehicle adoption, improving air quality and saving residents money.
Looking ahead, while Colorado’s auto dealers anticipate a drop in EV sales in the fourth quarter due to the expiration of the federal credit, the state is implementing measures to maintain momentum. From now through 2025, all buyers of new EVs priced up to $80,000 will receive a $3,500 state tax credit. Additionally, vehicles priced under $35,000 will qualify for an extra $2,500 incentive. However, the base credit will decrease to $750 starting January 1, 2024.
The state is also enhancing its cash-for-clunkers program, Vehicle Exchange Colorado. Consumers with an income at or below 80% of their area median income can trade in older, gas-fueled vehicles that have failed emissions tests for up to $9,000 toward a new EV, significantly up from the previous $6,000. Income-qualified buyers turning in a used vehicle will receive $6,000, an increase from $4,000.
Colorado’s impressive 32.4% share of EV and plug-in hybrid sales places it ahead of traditional leaders like California, Oregon, and Washington, and at the forefront of all 21 states reporting quarterly sales. In stark contrast, the national average for combined clean-car sales is only 12.6%.
The top-selling fully electric models in Colorado during the third quarter included the Tesla Model Y, Nissan Ariya, and Hyundai Ioniq 5. Despite the surge in electric sales, gas-fueled vehicles like the Ford F-series pickups and Subaru Crosstrek continue to dominate part of the market.
As incentives evolve and consumer interest in clean energy vehicles continues to grow, Colorado’s automotive landscape is set for significant changes in the months ahead. Stay tuned for more updates on this developing story as the state navigates the future of electric mobility.
