By Taylor Dolven | The Colorado Sun
State discounts for purchasing heat pumps, e-bikes, and electric cars and trucks will be cut in half next year, Colorado economists announced Wednesday.
The tax credits, some made available just last year, will be slashed in 2026 because of a dismal state revenue forecast, said Emily Dohrman, senior economist for nonpartisan Legislative Council Staff, at the Joint Budget Committee’s quarterly meeting.
Lawmakers enacted the green tax credits in 2023 to make electric transportation and heating and cooling more appealing to Coloradans. But the availability of the credits hinges on state economic forecasts showing at least 4% projected revenue growth in the next fiscal year, or else they are cut by 50%.
Up until recently, it looked like the state’s forecast revenue growth requirement would be reached. Just a few months ago in March, state economists projected the green tax credits would remain fully intact. But since then, “lower collections and a reduction in expectations for the economy” soured the June forecast, Dohrman said. She said revenue is expected to increase only by 2% next year.
The halving of the state incentives paired with Congressional Republicans’ proposal to eliminate federal incentives for electric vehicles as part of their big budget bill would result in far less money available to help Coloradans electrify their homes and transportation.
Transportation and buildings are two of the top greenhouse-gas emitting sectors in Colorado. Proponents of electric vehicles credited the combination of federal and state incentives for a boom in EV sales in Colorado last year.
The state tax credits for electric cars and trucks were scheduled to range between $1,500 and $8,000 for next year, depending on the kind of vehicle. Tax credits for e-bikes were supposed to be $500 ($50 for retailers and $450 for purchasers), and tax credits for heat pumps were scheduled to range between $250 and $2,000, depending on the kind of system. All will be halved.
A $2,500 bonus credit for vehicles with a retail price less than $35,000 will remain intact, as will other incentive programs, like Vehicle Exchange Colorado, which helps income-qualified Coloradans replace their gas cars with electric ones.
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