MichAuto > Blog > Advocacy > Gov. Whitmer Launches “MI Vehicle Rebate” Plan to Lower Vehicle Prices, Boost Sales in Michigan 

Gov. Whitmer Launches “MI Vehicle Rebate” Plan to Lower Vehicle Prices, Boost Sales in Michigan 

December 14, 2023

Michigan Executive Office of the Governor
Dec. 14, 2023

LANSING, Mich. –Today, Governor Gretchen Whitmer announced the MI Vehicle Rebate plan to boost new electric, hybrid, and traditional combustion vehicle sales in Michigan after the United Auto Workers (UAW) and Big Three reached a new contract.

“MI Vehicle Rebate will save you money on your new car as you walk out of the dealership with your keys,” said Governor Whitmer. “Michigan’s auto industry is the backbone of our economy, and this year, the hardworking men and women of the UAW and our world-leading automakers negotiated and ratified a record contract. Now, let’s keep making the world’s best cars and trucks while lowering costs for families by thousands of dollars. Together, we will build and lead the future of mobility and electrification.” 

“The future of cars, batteries, and tech is being made in Michigan,” said Lt. Governor Garlin Gilchrist II. “The MI Vehicle Rebate plan will lower costs for families, spur vehicle manufacturing, and support both our world-class auto workers and our automakers. Governor Whitmer and I are proud of our efforts alongside the UAW to ensure Michiganders are respected and protected at work, and we will continue working to grow Michigan’s economy and cement Michigan as the best place to build a bright future.” 

The new state tax rebate will lower the cost of a new electric, hybrid, or traditional vehicle between $1,000 and $2,500 per vehicle, which could save Michiganders up to $10,000 when combined with federal incentives. Michiganders will receive the tax rebate on new vehicles under four categories:  

  • $2,500 on a new battery electric or hybrid vehicle manufactured in a facility where the workers are represented by an automotive union.
  • $2,000 on a new battery electric or hybrid vehicle.
  • $1,500 on a new internal combustion vehicle in a facility where the workers are represented by an automotive union.
  • $1,000 on all other new internal combustion vehicles.

In the upcoming State of the State address, Governor Whitmer will ask the legislature to allocate $25 million to fund the MI Vehicle Rebate program. The MI Vehicle Rebate does not apply to used vehicles. 

“Michigan’s licensed new vehicle dealers are excited to hear about the new-vehicle incentive program proposed by Governor Whitmer,” said Cliff Cicotte, President, Michigan Automobile Dealers Association. “This program will directly support Michigan residents, while also highlighting the importance of New Vehicle sales to our state economy. New vehicle dealers across Michigan look forward to the opportunity to collaborate with state leaders to seamlessly implement and promote this incentive program.” 

“The clean energy transition is happening, and it is critical that Michigan is a leader in the technology development, manufacturing and adoption of electric vehicles,” said Glenn Stevens. Jr. Executive Director, MichAuto. “At the same time, the transition will take time and needs to be balanced. Support for new EV sales and for those vehicles made in America is important as Michigan moves forward as a leader in the technology of today and tomorrow.” 

“Michigan has led the world in producing traditional vehicles and it should lead in producing EVs,” said Frank Houston, Blue Green Alliance, Michigan Regional Program Manager. “The incentives introduced today will not only help reduce auto pollution but will also support and create good union jobs in communities across the state. We thank Gov. Whitmer for her leadership and look forward to continuing to work with her on this and other initiatives to protect our environment and public health while supporting industries that help drive economic opportunity for Michigan.” 

Details on MI Vehicle Rebate

To lower the cost of an electric vehicle, Governor Whitmer is proposing a Michigan tax rebate of $2,500 for a union-made electric or hybrid vehicle or $2,000 for a non-union-made electric or hybrid vehicle. Combined with the $7,500 federal credit, a Michigan family could receive up to $10,000 off the purchase of new battery electric vehicle or plug-in hybrid electric vehicle.  

 Owning an electric vehicle will save drivers $6,000 to $10,000 over the life of the vehicle, compared to a gas-powered vehicle. Electric vehicles need half as many repairs, cost half as much to maintain, and require half as much to charge as gas-powered cars need to fill up. 

To lower the cost of a traditional combustion vehicle, Governor Whitmer is proposing a Michigan tax rebate of $1,500 for a union-made vehicle or $1,000 for a non-union-made vehicle.  

How Michiganders Would Receive the Tax Rebate 

The state tax rebate will be applied to the final price of a vehicle at the time of purchase. Once an individual selects the new vehicle that they intend to purchase, the auto dealership contacts the Department of Treasury to receive a tax rebate voucher. The licensed new vehicle dealership subtracts the rebate amount from final purchase price based on the vehicle category and rebate amount. The rebate will continue until Michiganders realize all savings in the $25 million program.