Getting to Green: Minnesota's energy future

Minnesota's electric vehicle rebate program opens Wednesday. Here's what you need to know.

a car plugged in to a charging cord
An electric vehicle charges at a station in a Bemidji parking lot. Wednesday is the first day Minnesotans will be able to apply for a rebate for purchasing an electric vehicle. 
Dan Gunderson | MPR News 2023

Updated: Feb. 7, 7:34 a.m. | Posted: Feb 6, 12 p.m.

Wednesday is the first day Minnesotans will be able to apply for a rebate for purchasing an electric vehicle. 

The Legislature designated funding last year for the rebate program, which is finally rolling out this week. The state Department of Commerce will start accepting applications at 10 a.m. Feb. 7.

Here are a few things to keep in mind before you apply.

Why is the state offering these rebates now?

The rebate program was part of a suite of bills the Minnesota Legislature passed last session to address climate change.

The transportation sector is now the largest contributor of greenhouse gas emissions in Minnesota. Right now, EVs make up less than 1 percent of vehicles on the road in Minnesota, and state lawmakers want to increase that percentage.

“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. “One way to get folks to move faster in adopting this new technology is to offer economic incentives.”

The Legislature authorized funding for the rebates last year, but it’s taken awhile for the commerce department to get the program ready to launch.

How much are the rebates, and who’s eligible?

Both new and used electric vehicles purchased or leased on or after May 25, 2023, are eligible.

For new vehicles, the rebates are up to $2,500. For used vehicles, it’s up to $600.

There are no income eligibility requirements. Each person can get up to one rebate per year. Businesses, nonprofits and government entities also are eligible for one rebate per fiscal year.

A red EV and it's "Zero Emission" badge
A Nissan Leaf is parked in the garage of a home in Wayzata, Minn.
Ben Hovland | MPR News 2023

Are there limits on the type of EV you can buy?

Yes, a few. It must be either an electric vehicle or a plug-in electric hybrid. The vehicle must be titled in Minnesota.

Also, there’s a cap on how much vehicles can cost. The manufacturer’s suggested retail price must be $55,000 or less for new vehicles, not including taxes and fees. For used vehicles, the purchase price must be $25,000 or less.

Aren’t there already federal EV incentives available? 

Yes. The federal government offers tax credits for EVs of up to $7,500 for new vehicles and $4,000 for used EVs. There’s also a tax credit for 30 percent of the cost of installing a home EV charger, up to $1,000.

That means new EV buyers could get a combined $10,000 in incentives, said Diana McKeown, co-director of the Clean Energy Resource Teams at the nonprofit Great Plains Institute. 

“That’s pretty significant,” she said. “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.”

Keep in mind that the state and federal programs have different rules for which cars and light trucks qualify. The state is less restrictive than federal.

Will the state rebates make the cost of an EV comparable to a gas-powered vehicle?

It’s possible, depending on what make and model of EV you buy.

The price of electric vehicles has been falling for a while. In some cases, the federal tax rebate alone already made the cost of some EV models cheaper than their gas-powered counterparts, Wyckoff said.

“There are certainly situations with the lower-end cost models from Tesla and the lower-end cost models like the Chevy Volt, where it’s been the cheaper car to go electric than to stick with gas already,” he said.

There are the long-term costs to consider, such as not having to buy gas. The cost of charging an EV are typically less than what you pay per month for gasoline, depending on how much you drive. Also, EVs tend to require less maintenance over their lifetime.

How long will the rebates be available?

Probably not long. State lawmakers set aside about $10.6 million for the rebates this fiscal year and $5.2 million next year. The rebates will be available until June 30, 2027, or until the funding runs out.

The Minnesota Department of Commerce doesn’t know exactly how many they’ll be able to give out, because they don’t know the mix of people who will apply for the $2,500 rebates for new vehicles, or the $600 rebates for used vehicles.

But if everyone in Minnesota who bought an EV since last May applied for a rebate, the money would be gone very quickly — likely within weeks or even days. It’s possible state lawmakers will consider adding more money to the program, but there’s no guarantee.

The key takeaway is don’t wait. If you already bought an EV recently or you’re thinking about buying one, act now so you don’t miss out.

“It’s going to be a competition for getting in there and getting your rebate in right away,” McKeown said.

A close-up of an EV charging station
An EV charging station in Minneapolis is pictured on Thursday.
Ben Hovland | MPR News 2023

How do you apply?

Go to Minnesota Department of Commerce website at It contains information about the program and how to create an account.

To apply, you’ll need a current driver's license. If you’re a homeowner, you’ll also need your electric utility bill from the date of purchase. Renters need a lease agreement from the time of their EV purchase.

Also, you’ll need a purchase agreement or lease for your electric vehicle. If you own a used EV and you don't have the purchase agreement, the website lists alternative documentation.

Correction (Feb. 7, 2024): An earlier version of this article incorrectly stated a requirement for homeowners seeking to apply. The post has been updated.