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Green Car Adoption by State: Who’s Leading the Charge?

By Julie Blackley

West Coast states lead green car adoption while Alaska, Vermont, and Hawaii show the greatest growth

 With the future of the automotive industry becoming increasingly green, iSeeCars released a new study ranking U.S. states in their green car adoption and growth rates from 2014 to 2017. California has the highest green car adoption rate, while Alaska shows the most growth.

iSeeCars.com analyzed over 22.5 million new and used cars sold in 2017 (and over 17.8 million cars sold in 2014) to determine which states have the highest percentage of alternative-fuel vehicles (defined as hybrids, plug-in hybrids, and electric vehicles), and which states had the largest increases in green car adoption from 2014 to 2017. Overall, only 2.6 percent of vehicles sold in 2017 were green vehicles compared to the 2014 national adoption rate of 1.7 percent.

States with Highest Green Car Adoption Rates

Rank State % Green Vehicles
1 California 7.5%
2 Washington 6.1%
3 Oregon 5.6%
4 Hawaii 4.2%
5 Vermont 3.7%
6 Maryland 3.2%
7 Utah 3.0%
8 Virginia 2.9%
9 Massachusetts 2.9%
10 Arizona 2.8%
11 Colorado 2.7%
National Average 2.6%
 

Known for pioneering the sustainability trend, California fittingly has the highest percentage of eco-friendly car sales—7.5 percent of its vehicles were alternative-fuel, almost three times the national average. Also recognized as trend-setters for sustainability practices, California’s West Coast counterparts Washington and Oregon respectively are in the second and third positions on the list.

Rounding out the top five are fourth-ranked Hawaii and fifth-ranked Vermont, a state known for being environmentally-friendly.

“When considering the country’s most sustainable states, Hawaii does not immediately come to mind,” said iSeeCars.com CEO Phong Ly. “However, that perception is changing due to an aggressive sustainability plan which includes incentives for green car buyers such as free parking and exemption from high-occupancy vehicle lane restrictions.”

Also appearing on the list were additional states with appealing eco-friendly car incentives including Maryland, Massachusetts, Virginia, Colorado, and Arizona. Maryland offers state-based credits based on the vehicle’s battery capacity as well as an excise tax credit and rebates for installing EV charging stations. Massachusetts offers rebates for both buyers and lessees as well as grants to businesses who offer charging stations to employees. Virginia drivers with fuel efficient vehicles can forgo the emissions test required for initial registration and renewal and have unrestricted access to certain carpool lanes. However, many of the carpool lane restrictions only apply to vehicles registered in Virginia before 2011, but those who replace their previously eligible vehicles with current eligible vehicles can continue to take advantage of these incentives.  Colorado offers income tax credits for electric vehicle buyers and lessees and funding for up to 80 percent of home charging stations, as well as unrestricted HOV lane access and exemption from emissions testing. Arizona provides reduced license fees, a tax credit for EV charging installations, increased parking privileges, and carpool lane access.

Utah also made the list despite the expiration of its incentives at the end of 2016.

States with Greatest Gains for Green Vehicle Adoption

Rank State % Green Vehicles 2017 % Green Vehicles 2014 % Increase Green Vehicle Adoption
1 Alaska 2.1% 0.8% 144.8%
2 Vermont 3.7% 1.6% 127.1%
3 Hawaii 4.2% 1.9% 118.1%
4 California 7.5% 3.9% 90.2%
5 Wyoming 1.0% 0.6% 85.5%
6 Washington 6.1% 3.3% 85.2%
7 Maryland 3.2% 1.8% 77.6%
8 New Jersey 1.8% 1.0% 70.1%
9 Connecticut 2.4% 1.4% 69.7%
10 Montana 2.0% 1.2% 69.4%
National Averages 2.6% 1.7% 48.4%
 

The analysis also examined the states with the greatest gains in green vehicle adoption over a three-year period. “While the majority of the states with the greatest increases in eco-friendly car adoption are states that were previously below the 2014 average of 1.7 percent, the other states built upon their already above-average adoption rates,” said Ly.

Alaska is the most-improved state, with a 144 percent increase over 2014, when it had the nation’s sixth lowest green vehicle adoption rate. Meanwhile, California had the highest adoption rates over both periods, but still has the fourth highest improvement.

Vermont earns the second spot on the list for its 127 percent improvement rate, again supporting its reputation for being environmentally friendly. Interestingly, both Alaska and Vermont, the states with the top improvement rates, do not offer any statewide incentives for green car buyers or lessees. While residents in Vermont are likely to purchase green vehicles as part of the state’s eco-friendly culture, Alaskans may opt to purchase these vehicles to offset the state’s gas prices which are among the highest in the nation. Despite no statewide incentives, residents of these states are still able to take advantage of a federal tax credit that is commensurate with the size of the vehicle’s battery.

The other non-contiguous U.S. state, Hawaii appeared third on the list showing that the state’s incentives are effective in enticing residents to purchase green vehicles.

Rounding out the top five is Wyoming, which previously held the country’s lowest green car adoption rate. Despite its 85.5 percent growth rate, it still remains at the bottom of the country’s green car adoption rate as the fifth lowest state.  Along with a lack of green car incentives in the state, those who own plug-in electric vehicles are required to purchase a $50 decal.

The purchase of new alternative fuel vehicles grew 119 percent, while used alternative fuel vehicles grew 48 percent. “This discrepancy could be explained by federal tax credits only applying to the purchase of new plug-in hybrid and electric vehicles rather than used.”

States with Declines for Green Vehicle Adoption

Despite widespread gains of green vehicle purchases across the country, five states defied this trend and saw a decrease in eco-friendly vehicle sales.

Rank State % Green Vehicles 2017 % Green Vehicles 2014 % Green Vehicle Improvement
1 Arkansas 1.0% 1.4% -27.0%
2 South Dakota 1.0% 1.3% -23.9%
3 Oklahoma 1.2% 1.4% -11.8%
4 South Carolina 1.5% 1.6% -3.2%
5 New Mexico 2.2% 2.2% -1.9%
National Average 2.6% 1.7% 48.4%
 

“The decline in green vehicle purchases could be attributed to a decrease in gas prices and state financial incentives that are either non-existent or not enticing enough,” said Ly.  “Arkansas and South Dakota don’t offer any incentives for alternative fuel operators, while Oklahoma saw a decrease in buyers despite generous tax credits.”

South Carolina’s hybrid and electric vehicle tax credits expired in 2017, which could have contributed to the state’s declining rates.

“As green cars increase in popularity, consumers will continue to be faced with more buying options,” said Ly. “Those looking to purchase an eco-friendly car should do their research to see what incentives are available as well as which vehicle type makes the most sense for them.”

Methodology

iSeeCars.com analyzed over 22.5 million new and used cars sold in 2017 and over 17.8 million cars sold in 2014. For each U.S. state, the number of alternative-fuel “green” vehicles (hybrids, plug-in hybrids, and electric vehicles) sold was expressed as a percentage of the total number of vehicles sold in the state. States were ranked by their percentage of green vehicles in 2017, as well as the percent improvement seen from 2014 to 2017.

About iSeeCars.com

iSeeCars.com is an automotive data and research company that helps consumers find the best car deals by providing key insights and guidance. It has saved users over $140 million by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of cars and thousands of dealers. Based in the Boston area, iSeeCars.com was founded by former TripAdvisor and SAP executives determined to improve the car shopping experience for consumers.

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