Will Colorado’s sales of EVs pick up again?

As lawmakers debate a revised incentive package, a national figure suggests Colorado needs carrots that more heavily reward more lower-income, high-mileage rural drivers

by Allen Best

Sales of electric vehicles and hybrids in Colorado soared during the last few years. During late 2024, they constituted nearly one-third of sales. This year they have plummeted through the first three months.

Might rejiggered incentives put wind in the sails of these sales? Or, for that matter, might high gas prices do the same?

The Colorado Automobile Dealers reported in its quarterly bulletin that battery-electric vehicle sales during January-March in 2026 had declined 63% compared to the same three months in 2025.

The EV sector constituted only 9% compared to 21% a year earlier.

Colorado in past years has offered handsome financial incentives to spur the sales. Coupled with federal incentives, the sales stickers on EVs were within range of those on gas- and diesel-fueled vehicles.

A federal tax credit of $7,500 per qualifying EV expired in September. In January, Colorado’s state EV tax credit fell to just $750, although the state still offers a bonus credit of $2,500 for EVs with suggested retail prices of $35,000 or less.

This week, Jigar Shah cited Colorado as a state that should rethink its incentives. Shah, a former solar developer (founder of SunEdison) responsible for one of the first projects in the San Luis Valley, most recently oversaw the U.S. Department of Energy loan program in the Biden administration. Now, he podcasts (Energy Empire and Open Circuits).

Shah, in a LinkedIn post this week, said “Colorado Shows Us What’s Possible on EVS — And What Is Missing.”

“Colorado, to its credit, has been scrambling in the right direction for years. But even Colorado — arguably the most aggressive EV state in the country — is leaving its most powerful lever untouched.”

Coltura, a nonprofit, has mapped American gasoline consumption down to the census block level, he explained. The findings about who burns gasoline and how much are stark.

Colorado has 318,000 of what Coltura calls Gasoline Superusers: people who drive an average 40,000 miles a year. These Superusers constitute just 8% of Colorado’s drivers yet burn 30% of the gasoline.

If Coloradans often define themselves by the high peaks and wide-open visitas, 86% of us live in urbanized areas. Nearly 43% of the Superusers, however, live in rural areas. They spend $8,554 annually on gas, representing 11% of their income. Of those Superusers earning below the state median income, the share climbs to 19.2%

In short, explained Shah, “these are Coloradans who are being slowly bankrupted by gasoline dependence. They stand to gain the most — by far — from switching to an EV.”

To help this happen, Shah argues that Colorado needs to recast its incentives. As now configured, it most rewards those of higher incomes. It needs to figure out how to persuade the lower-income, higher-mileage drivers to get EVs.

The fix is conceptually simple, he says: convert all state EV incentives from flat-purchase rebates into per-mile rebates or refundable per-mile tax credits. I’ll leave you to read the details at Shah’s LinkedIn posting, should you wish.

His bottom line: Switching all 318,000 Colorado Superusers to EVs would cut the state’s transportation carbon emissions by 12.2% and total carbon emissions by 4.1%.

“The EVs have been going to the wrong people. The data knows who the right people are.”

If no stranger to Colorado, I sort of doubt he understands who is driving and where. I see an awful lot of pickups in more rural parts of Colorado. And they don’t necessarily drive slowly, either. I see lots of 8 mpg driving on the interstate highways. A little less pedal to the metal might save gas — and money. But that is another topic.

We do need pickups attractive to rural drivers. The Wall Street Journal this week reported that a “secret team” comprised of folks from Silicon Valley and Ford Motor have been blowing up the automaker’s assembly line to create a $ 30,000 electric truck. Last year Ford killed its electric F-150 pickup, which cost between $50,000 and about $77,000.

Meanwhile, back in Colorado, lawmakers in Denver have been working on a bill, HB26-1289. Travis Madsen, the transportation program manager for the Southwest Energy Efficiency Project, said this bill would update the state’s tax credit to make it more effective after the hiccups at the federal level and with Colorado’s bad fiscal situation.

The proposed law — this week it’s in the Senate after approval by the House — would make any EV with a manufacturer’s suggested retail price of higher than $50,000 ineligible for support. It offers extra credit for vehicles that cost less than $40,000. This is for consumers.

“That will help make EVs more accessible for the most price-sensitive Coloradans who could easily benefit from more affordable transportation options,” Madsen wrote in a memo during April.

This would help the individuals — but it would also help Colorado’s air quality. Transportation, Madsen noted, is Colorado’s largest source of greenhouse gas pollution and a sector among the most resistant to transformation.

Might higher gasoline prices spur transformation?

The dire Strait of Hormuz situation has incited much speculation. Economist Paul Krugman this week noted that EV sales in mainland Europe are up 51% from a year ago.

“It is now clear that the closure of the Strait of Hormuz marks an inflection point: the global green energy curve, which was already on a rapidly rising trajectory, has suddenly become even steeper.” Krugman cited a Financial Times report that investors are piling into clean energy funds.

If the United States produces more oil than it exports, oil is a global commodity, moved relatively easily – although, of course, not through the aforementioned strait in the Middle East. At what point does $4 and $5 gasoline incite a switch to a lower-cost fuel?

As SWEEP’s Madsen points out, charging an electric vehicle at home at night in metropolitan Denver is equivalent to paying about 90 cents per gallon for gasoline.