New Jersey Gov. Phil Murphy signed sweeping legislation Friday that environmental groups say could propel the state into national leadership on electric vehicle sales with a new $5,000 rebate, combined with an existing sales-tax exemption, expected to entice consumers in a big way.

The incentives could be combined with a current federal tax credit to potentially bring the sticker price of a $40,000 electric vehicle, for example, into the $28,000 range.

“Increasing the use of electric vehicles is a critical step to secure New Jersey’s clean energy future,” Murphy said. “By establishing aggressive goals and strong incentives for electric vehicles, we are repositioning our economy and state for a clean future. Today, I am proudly signing bipartisan legislation that will transform New Jersey’s transportation sector and modernize our infrastructure to support our goal of reaching 100% clean energy by 2050.”

Doug O’Malley, director of Environment New Jersey, said the effort will make the plug-in vehicles much more affordable, and drive demand not only for production of more cars, but charging stations and other infrastructure. Although some other states, such as Colorado, offer rebates, New Jersey’s offer would put it at the top, he said.

This is a real game changer,” said O’Malley, whose group is among those that have been pushing for the legislation for years. “This is the largest rebate in the country and it’s really going to drive sales of EVs [electric vehicles].”

The legislation, which has multiple sponsors, was passed in the Assembly and Senate this week and sets an aggressive timetable for increasing electric vehicles in the Garden State. Currently, New Jersey ranks 7th nationwide in the number of electric vehicles.

The authors of the bill say that ramping up use of electric vehicles will improve air quality by eliminating tailpipe emissions and reducing greenhouse gases, while saving operating costs for owners. Providing more charging stations will also reduce “range anxiety” for drivers who fear running out of power on the road, although most electric vehicle owners charge their autos overnight at home.

“Given the speed at which the planet is warming, it is imperative we do all that we can to protect the environment,” said Sen. Bob Smith, (D., Middlesex County), a prime sponsor of the legislation. “Increased usage of electric cars could greatly reduce the state’s greenhouse gas emissions and improve air quality.

Among the goals:

  • A rebate of $25 per mile of range for an electric vehicle, for a maximum of $5,000. The rebate is funded through the state’s already established Clean Energy Fund. The rebate program would continue for 10 years after its start, and can’t exceed $300 million from the fund.

  • 330,000 light-duty electric cars or trucks on the road by the end of 2025, and 2 million by 2035. Light-duty vehicles are private passenger cars, minivans, sport utility vehicles, crossover vehicles, or pickup trucks.

  • 85% of all new light-duty vehicles sold in New Jersey are to be electric by the end of 2040.

  • 400 fast chargers installed statewide in 200 charging stations by the end of 2025. A fast charger provides 150 kilowatts of charging power, and can charge a car in a fraction of the time a standard plug requires.

  • The charging stations would be no more than 25 miles apart.

  • At least 15% of all multifamily residential properties would have chargers.

  • 10% of new buses for NJ Transit are to be zero emission vehicles by 2024.

Ray Cantor, a vice president at the New Jersey Business & Industry Association, said his organization objected to a previous version of the bill, but now supports it because some of the mandates have been reduced to goals.

For example, Cantor said the legislation originally mandated that utilities build the charging infrastructure throughout the state, which would have meant ratepayers would be paying for it. Now, he said, the numbers of charging stations and electric vehicles are “goals.”

“Generally NJBIA is supportive of electric vehicles, and electrification of the transportation sector," Cantor said. “That’s a key strategy to reduce our carbon footprint. But what we were looking for was a reasonable means to do that using market forces, rather than use strict mandates that would hurt the business community."

Cantor said the rebates and tax credits will propel the program forward.

“We are confident that as more customers start buying EVs, you’ll see businesses step up with hotels providing EV chargers, and residential apartments putting them in. That’s what the market does. The rebate will drive the market.”

Although supporters say the deal for consumers is a good one, the rebate and tax incentives depend on several factors, including the range of a vehicle. And, the deal applies only to cars with a sticker price under $55,000, because lawmakers did not want to provide incentives for luxury car buyers. In addition, the federal Qualified Plug-In Electric Drive Motor Vehicle Credit, an IRS tax credit for $2,500 to $7,500 per vehicle, is set to phase out after certain sales benchmarks are reached.

Dealers will have the option of offering the rebate as part of a lower price on a new electric vehicle. Otherwise, a consumer will have to apply for the rebate after the purchase.

Wawa, one of the largest gas service chains in the region at its convenience stores, had already been spying the New Jersey market as the legislation gained momentum. The company plans to double the number of Tesla Superchargers at its stores by the end of this year. But New Jersey is a key focus for the chain, which began opening charging stations in August 2017.