Jon King, Michigan Advance
December 13, 2023
Following the ratification of new contracts between the United Auto Workers (UAW) and General Motors, Ford and Stellantis, Gov. Gretchen Whitmer on Wednesday announced the “MI Vehicle Rebate” plan which aims to boost sales of new electric, hybrid and traditional combustion vehicles in Michigan.
“MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys,” said Whitmer. “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. Now, let’s keep making the world’s best cars and trucks while lowering costs for families by thousands of dollars. Together, we will build and lead the future of mobility and electrification.”
The plan will utilize a new state tax rebate to lower the cost of a new electric, hybrid, or traditional vehicle between $1,000 and $2,500 per vehicle. When combined with a $7,500 federal incentive, Whitmer’s office said Michiganders could save up to $10,000.
Michiganders will receive the tax rebate on new vehicles under four categories:
- $2,500 on a new battery electric or hybrid vehicle manufactured in a facility where the workers are represented by an automotive union.
- $2,000 on a new battery electric or hybrid vehicle.
- $1,500 on a new internal combustion vehicle in a facility where the workers are represented by an automotive union.
- $1,000 on all other new internal combustion vehicles.
Whitmer hopes to fund the proposal with a $25 million allocation, which she plans to ask the Legislature for in her upcoming State of the State address next year.
The MI Vehicle Rebate does not apply to used vehicles. Cliff Cicotte, president of the Michigan Automobile Dealers Association, said Michigan’s licensed new vehicle dealers are excited by the plan.
“This program will directly support Michigan residents, while also highlighting the importance of New Vehicle sales to our state economy,” said Cicotte. “New vehicle dealers across Michigan look forward to the opportunity to collaborate with state leaders to seamlessly implement and promote this incentive program.”
The proposal’s emphasis on electric and hybrid vehicles also drew support from the BlueGreen Alliance, which unites labor unions and environmental organizations.
“Michigan has led the world in producing traditional vehicles and it should lead in producing EVs,” said Frank Houston, Blue Green Alliance Michigan regional program manager. “The incentives introduced today will not only help reduce auto pollution but will also support and create good union jobs in communities across the state.”
The state tax rebate will be applied to the final price of a vehicle at the time of purchase. Once an individual selects the new vehicle that they intend to purchase, the auto dealership contacts the Department of Treasury to receive a tax rebate voucher. The licensed new vehicle dealership subtracts the rebate amount from final purchase price based on the vehicle category and rebate amount. The rebate would continue until Michiganders collect all savings in the $25 million program.
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