So far, electric cars have been more popular in California than in most of the rest of the country.

In large part, EV appeal was greater in California due to a $5,000 state rebate that came on top of the $7,500 federal tax credit. With the tax credits, the price of an all-electric Nissan Leaf could be as low as $21,000, making it cheaper than a Toyota Prius and putting it on par with other small cars. (The Chevrolet Volt was not eligible for the state credit, although it does receive the $7,500 federal tax credit.)

In June, a week and a half before the rebates were to expire, the state ran out of funds to pay them. It now has 500 people who have already bought electric cars on the waiting list for credits.

Last month, the California Air Resources Board (CARB) earmarked up to $21 million for a new $2,500 rebate, to replace the $5,000 rebate. The new rebates will be distributed first to the 500 consumers on the waiting list, then be provided on a first-come, first-served basis to new EV buyers. California consumers are expected to have about a year before funding runs out.

While the price of electric cars is going up for California drivers, other factors still make the Golden State more attractive than most for electric cars: California uses no coal to generate electricity; its major electric utility companies have time-of-use rates and special power rates for electric cars, effectively lowering their energy costs; and perhaps most importantly, pure electric cars are still eligible to use carpool lanes on the state's notoriously congested freeways with just a driver onboard. In addition, public charging infrastructure is on a faster track than it is elsewhere in the nation.

In the end, the new money earmarked for the $2,500 rebate is almost twice as much as budgeted in the original program and is likely to be more widely distributed. It may not make sense to subsidize $100,000 electric roadsters, but offering modest rebates to more consumers may lead to even more affordable electric cars traversing California's scenic roads.

See our guides to alternative fuels and fuel economy.