Colorado boosts electric vehicle rebates after federal incentives expire 

Coloradans’ window to receive thousands of dollars in federal tax breaks for purchasing electric vehicles has closed. But they’ll soon have the opportunity to tap into larger state-level benefits starting next month. 

Colorado is boosting rebates through the state’s Vehicle Exchange Colorado Program for new and used electric vehicles by thousands of dollars starting on Nov. 3, according to an announcement on Thursday from Gov. Jared Polis’ office. 

The program aims to incentivize more electric vehicle use by offering rebates to Coloradans who replace their gas- or diesel-powered vehicles with cars that are all-electric or a plug-in hybrid. Starting on Nov. 1, rebates for purchasing or leasing an electric vehicle will increase from $6,000 to $9,000, and from $4,000 to $6,000 for used ones. 

The incentive boost comes after Congress ended a federal tax credit worth up to $7,500 for electric vehicles, which expired on Sept. 30. Known as the Clean Vehicle Credit, the benefit was created under former President Joe Biden’s 2022 Inflation Reduction Act, a major climate and health law. 

The tax credit was initially set to last through 2032, but Republicans in Congress cut that timeline short as part of the sweeping tax and spending-cut law they passed this summer, which is also winding down several other tax incentives for clean-energy home upgrades. 

Colorado remains a leader in electric vehicle adoption, with more than 200,000 registered in the state to date, according to Polis’ office. Electric vehicles account for a quarter of all car sales in Colorado so far in 2025. 

Funding for Colorado’s vehicle exchange program comes from fees on package and food delivery services. Money for the higher rebates will come from the program’s existing budget for the 2026 fiscal year, according to Polis’ office. 

The rebates are reserved for Coloradans changing from cars that are at least 12 years old or that fail a Colorado emissions test. Households must also make under 80% of their county’s area median income to qualify. 

The state also has its own tax credit to further incentivize electric vehicle purchases. That benefit, however, is being reduced from $3,500 to $750 starting on Jan. 1, 2026, due to ongoing budget shortfalls in the state’s general fund. 

While the rebate program is somewhat insulated from budget pressures since its funding is derived from fees, the state’s electric vehicle tax credit is directly tied to available tax revenue. 

More information on the vehicle exchange rebates can be found at EnergyOffice.colorado.gov/vehicle-exchange-colorado. Information on the state tax credits can be found at EnergyOffice.colorado.gov/transportation/grants-incentives/electric-vehicle-tax-credits.