DENVER — The State of Colorado is announcing a new electric vehicle rebate within two days of federal tax credits expiring under the new federal tax and spending plan.
Starting on November 3, the Vehicle Exchange Colorado rebates will increase from $6,000 to $9,000 for new EV purchase and leases and $4,000 to $6,000 for used EV purchases and leases.
Colorado Energy Office Executive Director Will Toor said this program is designed specifically to help lower-income Coloradans.
“For people who make up to 80% of area median income, who are turning in an older polluting gasoline vehicle, will be able to get up to a $9,000 rebate towards a new electric vehicle, that's up from $6,000 which is the current level, or up to $6,000 for used electric vehicle, which is an increase from the current level of $4,000,” Toor said.
The energy office said the program launched in summer 2023 and more than 2,700 Coloradans have traded in a qualified old or high-emitting vehicle to purchase or lease an EV.
The announcement comes within 48 hours of federal tax credits expiring. Changes to state tax credits are also on the horizon.
“Come January 1, the state tax credit will go down to $750 as a base tax credit, the extra $2,500 for lower cost vehicles will remain so up to $3,250 through the state tax credit. We anticipate New Vehicle Change Colorado rebate amounts remaining as we go into the new year,” said Toor.
The new rebate is in state plans through 2032, but could be adjusted depending on the EV market, the landscape with tax credits and demand.
Toor had mentioned to Denver7 months ago, the state was working on a solution to federal tax credits expiring. He said they were able to find money from the transportation electrification enterprises funded by fee revenues that by law has to go to transportation electrification programs. Toor said as the state goes through a budget shortfall, the rebates do not rely on general fund money.
“It’s an existing program that had an existing budget, and we had a bit of room in the budget. We were able to sort of make this pivot to increase the rebates for Vehicle Exchange Colorado. There's obviously a tougher challenge when it comes to addressing the much broader population of everybody who wants an electric vehicle. We don't have the financial ability to just replace those federal tax credits,” Toors said.
In the meantime, the state hopes people will take advantage of the larger state credits before they expire at the end of the year.
In a statement Governor Polis wrote:
“The market has made it clear, EVs are here to stay. Colorado is a national leader in EVs, expanding access and creating pathways for Coloradans to purchase an EV at low-cost. I encourage all Coloradans who are thinking of buying an electric vehicle or have been holding off: get out there right now.”
“For light duty vehicles in the U.S., we see roughly 60 to 68% lower emissions from electric vehicles versus gas powered vehicles,” Ed Piersa, with the energy office, added. “So this is all the more reason all of the goals that will pointed out are extremely important to the state."
State leaders said to date, there are more than 200,000 EVs registered in Colorado and that EVs made up a quarter of new car sales so far in 2025.
They hope the new rebate will help keep the momentum up of reaching nearly a million EVs on Colorado roads by 2030.
If you would like to take advantage of the new rebates come November 3, Piersa said there are a few steps you need to follow.
“It's applied at the time of the transaction, and vehicle exchange Colorado participant needs to be approved by the program prior to going to an authorized automobile dealer. And we have 175 authorized automobile dealers to date,” he said.
For a good place to start, click here.
