In Colorado, 1 in 4 new cars is now electric. Here’s how the state became an EV leader

If you were looking for a new car in Colorado last summer, you might have noticed some surprising deals on EVs—like a $19 monthly lease (with $500 down) on a brand-new Nissan Leaf from a dealership in Fort Collins.

The ultra-low price was possible because of the state’s generous incentives. Last year, that included a $5,000 tax credit to buy or lease any EV, with an extra $2,500 for cars that sell for less than $35,000. (This year, the tax credit dropped to $3,500.) If dealers handle the paperwork for the incentives, they can give buyers another $600 off. For the Nissan Leaf, for example, that meant a total of $8,100 could be taken off the cost, nearly covering the whole two-year lease.

Another state program offers income-qualified drivers who have old, polluting vehicles a $6,000 rebate on a new EV purchase or lease, or $4,000 for a used EV. Xcel Energy, the local utility company, offered low-income customers $5,500 off new EVs or $3,000 off used ones, though the program was so popular that it ran out of funds in November. All of this is in addition to the federal tax credits that can take up to $7,500 off some new EVs.

The incentives worked: By the third quarter of 2024, 25.3% of all new vehicles sold in the state were EVs—a higher rate than in any other state in the country, including California, which trailed slightly at 24.3%, according to a report from a coalition of state air agencies. Eighty-two percent of the new EVs registered in Colorado were fully electric, and the rest were plug-in hybrids.

In part, the push for EVs is aimed at helping residents’ bank accounts. “At the heart of everything we do is saving people money, and electric vehicles cost about two-thirds less to operate per mile,” says Governor Jared Polis. That includes both the lower cost of electricity compared to gas, and the fact that EVs require less maintenance. The other reason for the change, of course, is cleaner air.

Transportation is the state’s second-largest source of emissions. Colorado is working on other changes, including adding more public transit and using other incentives to get people to use electric bikes. Cities like Denver have also offered wildly popular e-bike incentives. But since most people drive, shifting from gas to electric vehicles is most critical, Polis says. (The local electric grid isn’t yet fully clean, but it’s already cleaner to charge an EV than use gas; when the last coal plant is retired in 2030, the footprint will improve.)

In addition to the incentives, the state has been working with companies to expand its network of EV chargers, including new chargers in apartment buildings for drivers who don’t have their own garages and fast chargers along five major highway corridors. “We’re now at a point where on all of our major highways, you’re basically never more than 30 miles away from a fast-charging station,” says Will Toor, executive director of the Colorado Energy Office. “I think range anxiety is pretty much a thing of the past in Colorado, and we’re going to continue to make these investments in the future.”

The incentives are designed to be temporary; by some estimates, as the price of batteries quickly falls, EVs could be at price parity with their gas counterparts by 2026. (Some models are already as cheap.) Until that point, the incentives could help be a deciding factor for people who might have been on the fence about an EV, and that can help the transition happen faster. Sales of some models have surged. In the first nine months of 2024, Nissan Leaf sales were up 690% compared to the same period in 2023.

“Almost everybody who drives an EV never wants to go back,” Polis says. “They’re quieter, they’re more efficient, the costs are less. As people experience the superior performance of electric vehicles, it’s much more likely that any future purchases will also be EVs.”

Unlike California and a handful of other states, Colorado doesn’t have a plan to phase out gas cars by 2035. But the state has a requirement that 82% of the vehicles sold by manufacturers in 2032 need to be zero-emissions. It aims to have 940,000 EVs on the road by the end of the decade, and around 2 million by 2035. Right now, there are around 160,000 EVs, and the targets are likely to be met. “Our projections are that we are well on track,” says Toor.