Minnesota Opens EV Rebate Program to Boost Clean Energy Transition

The rebate program has no income eligibility requirements, but funds are limited.

New and used EVs are eligible for state rebates that can be stacked with federal rebates. Image via Shutterstock.

As of Feb. 7, Minnesota residents can apply for rebates on purchases of both new and used electric vehicles, part of the state's initiative to combat climate change.

The rebate initiative, authorized by the Minnesota Legislature last session, aims to accelerate the adoption of EVs in a state where they currently constitute less than 1% of all vehicles on the road.

"The state is doing this to incentivize the clean energy transition, particularly the transition in the vehicle space for our cars and light trucks," said Peter Wyckoff, assistant commissioner for federal and state energy initiatives at the Minnesota Department of Commerce.

Eligible participants can receive up to $2,500 for new electric vehicles and up to $600 for used ones, with no income requirements restricting eligibility. This program is not just limited to individuals; businesses, nonprofits, and government entities can also benefit from one rebate per fiscal year.

However, there are specific requirements regarding the type of vehicles eligible and their cost, with new vehicles capped at a manufacturer's suggested retail price of $55,000 and used vehicles at a purchase price of $25,000 or less.

The rebates are designed to complement existing federal incentives, which offer up to $7,500 for new EVs and $4,000 for used ones, along with a tax credit for installing home EV chargers. Combined, these incentives could significantly lower the upfront cost of electric vehicles, making them a more viable option for many families.

"That's pretty significant," said Diana McKeown, co-director of the Clean Energy Resource Teams at the nonprofit Great Plains Institute. "That really makes it much more affordable for a lot of families that might not have considered an electric vehicle because of that upfront cost."

However, with a finite budget allocated for the rebates -- $10.6 million for this fiscal year and $5.2 million for the next -- the program may run out of funds quickly, especially given its wide eligibility criteria. The rebates will be available until June 30, 2027, or until the funding is exhausted, whichever comes first.

Those interested in applying for a rebate should act swiftly to secure their spot in the program. Applicants can find more details and apply online through the Minnesota Department of Commerce website.

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