Whitmer plan would give rebates to Michiganders who buy new EV, other cars

• Gov. Whitmer proposed a new $25 million MI Vehicle Rebate plan 
• If approved, families could save thousands of dollars when buying a new car or truck
• The governor plans to ask the Legislature to create the fund during her State of the State address 

Gov. Gretchen Whitmer on Tuesday proposed a new rebate program that would make cars and trucks more affordable for Michiganders, with bigger breaks for people who buy electric, hybrid and union-built vehicles. 

The $25 million program, which would need legislative approval, is an effort to support the auto industry after a nearly seven-week strike by the United Auto Workers (UAW). The strike forced Ford Motor Co., General Motors and Stellantis to pay higher wages, offer more job security and make changes to their plans to transition to electric vehicles.

"Michigan’s auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract,” Whitmer said in a statement. 

"MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys,” she said. 

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The governor plans to ask the Legislature to allocate money for the program in the State of the State address early next year. 

This is the third year in a row that she has proposed a rebate or tax break to encourage electric vehicle sales but past efforts did not gain traction and never received needed funding. 

The year’s proposal would grant $2,500 tax rebates for union-made electric or hybrid vehicles or $2,000 for electric or hybrid vehicles made in non-union factories. Combined with a $7,500 federal credit, a Michigan family could knock up to $10,000 off the price of a new battery electric vehicle or plug-in hybrid electric vehicle.  

The plan also aims to lower the price of a traditional combustion vehicle by offering a tax rebate of $1,500 for a union-made vehicle or $1,000 for a non-union-made vehicle.  

The state tax rebate would be applied to the final price of a vehicle once it is purchased. At that point, dealerships would contact the state for a voucher.

The program would apply only to new vehicles — not used ones.  

The incentive proposal comes as the price gap is narrowing between electric and conventional cars: The average transaction price for EVs in July was $53,469 compared to $48,334 for gas-powered vehicles, according to Cox Automotive.