Making electric vehicles easier to buy: the California example

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Efforts targeting lower income Californians aim to bring more EV buyers into the market and continue efforts to clean up transportation in the state.

Lower-income car buyers in parts of California can get substantial incentives through the Enhanced Fleet Modernization Program for scrapping an older polluting car and switching to a cleaner vehicle. (source: California Air Resources Board)
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Electric cars reduce both oil use and global warming emissions and are cheaper to operate than gasoline-powered vehicles. However, electric cars can cost more to buy than a conventional vehicle, and this initial outlay can prevent cars buyers from choosing a vehicle that is both a greener choice and will save money in the long run.

Now California is poised to make buying electric vehicles an option for more people through new investments and incentive programs.

The state collects funds into a Greenhouse Gas Reduction Fund from the sale of carbon permits; decisions are underway about how to invest the proceeds. Transportation accounts for more than 35% of California’s climate emissions, so it makes sense to make sizeable investments in cleaning up cars, trucks, and buses. Gov. Jerry Brown has proposed putting $350 million towards these clean transportation programs for the next fiscal year to expand the number of clean cars and trucks on the road.

California has had programs in place to help make electric cars more affordable since 2010. For example, the Clean Vehicle Rebate Program (CVRP) has provided over 100,000 rebatesto buyers of plug-in hybrids and battery electric vehicles. The state will consider extending and expanding this successful program at the June 25 meeting of the Air Resources Board.

Incentive program modifications will expand access to electric cars

To grow the number of electric vehicle buyers, the board is considering several initiatives specifically targeted at less affluent car shoppers. This is a critical step because offering incentives to lower-income people will allow them to reap the benefits of electric vehicle ownership and put them on the road to long-term fuel savings.

For example, the CVRP program would add an additional $1,500 rebate for qualifying low-income buyers of both plug-in hybrid and battery electric cars, financed in part by a new provision eliminating rebates for the highest-income EV purchasers. Previously, the wealthiest consumers did not face an income cut-off for claiming a rebate.

In addition to the CVRP incentive, the Air Resources Board plans to supplement an existing “cash for clunkers” program (the Enhanced Fleet Modernization Program) with a new voucher that lets qualifying Californians trade in polluting older cars for new electric vehicles. Participants in disadvantaged communities within areas with the worst air quality (Central Valley and Los Angeles) can get up to $12,000 towards a newer clean car, and will also save money by replacing gasoline with cheaper electricity.

Lower-income car buyers in parts of California can get substantial incentives through the Enhanced Fleet Modernization Program for scrapping an older polluting car and switching to a cleaner vehicle. (source: California Air Resources Board)
Lower-income car buyers in parts of California can get substantial incentives through the Enhanced Fleet Modernization Program for scrapping an older polluting car and switching to a cleaner vehicle. (source: California Air Resources Board)

Getting older cars off the road can be a very effective strategy for reducing air pollution, as vehicles that are 20 years old and older account for only 5 percent of all miles traveled in California, but are responsible for 40 percent of daily smog forming emissions from motor vehicles.

Investments in cleaner freight to accelerate low and zero-emission technologies

Cars are not the only vehicles getting cleaner, as California makes investments to clean up trucks, buses, and freight. The majority of the funding is directed towards communities that bear the brunt of current air pollution, like the areas surrounding ports, rail yards, and freeways. Clean freight projects will help companies add electric and hybrid trucks to their fleets to reduce the amount of diesel that is burned.

I asked my colleague Don Anair, a freight expert, about this and he said: “ The trucks, trains and ships that move goods in California are responsible for an estimated $20 billion in air pollution-related public health costs each year and are a growing source of climate emissions. These early, targeted investments in cleaner freight technologies will help speed commercialization and deployment that are needed to meet California’s air quality and climate challenges over the next several decades.”

Extending existing programs, combined with the innovative new efforts targeting lower income Californians will bring more potential buyers into the EV market and continue the efforts to clean up transportation in California.

Source: UCSUSA. Reproduced with permission.

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  1. Ian 4 years ago

    Boy we need this kind of scheme here in Australia too.

  2. JohnRD 4 years ago

    We should also be thinking about retrofitting existing cars to give at least partial replacement of fossil fuels with electricity. Work could range from putting an electric motor/generator somewhere on the power train to motor and gearbox replacement.

  3. Jacob 4 years ago

    Every nation should exempt electric cars from tax for the next 5 years.

  4. Mark Melocco 4 years ago

    In Australia you would need to remove the existing taxes as well as supply a subsidy. A Nissan Leaf starts at A$35,000, remove stamp duty, GST and give a subsidy and the car drops to about A$20,000 which is still a big ask for someone on a low income. Then the question is how to pay for it, most likely a tax on gas guzzlers but that is politically difficult.

  5. Lars Lohmann 4 years ago

    EV’s will only reduce emissions if they are powered by solar energy. Plugging an EV into the existing grid (e.g coal powered) would result in higher emissions than a fuel efficient hybrid or small diesel (discounting problems with particulate pollution). Thus, the real challenge for everyone, not just the low income households, is ensuring they can also afford to have a large solar array on their rooftop and most likely also battery storage.

    Finally, one should not just look at the upfront cost of the vehicle but rather the ‘total cost of ownership’ over the life of the car, including subsequent disposal/residual value. If you powered your EV from your own solar PV or at work, your marginal ‘fuel’ cost will be close to zero (well at least once the solar installation is paid off). There is still also some debate about the cost/value proposition to replace batteries once they have reached end of life.

    • Neil_Copeland 4 years ago

      The cost of going 100% green power with your electricity retailer, and you might have to change retailers to one that offers it, is very little compared to the cost of the weekly fuel bill. If you don’t have solar already this is one way to ensure zero emissions.

      • Lars Lohmann 4 years ago

        Neil – good point and this strategy would encourage more renewables to be built irrespective of the RET. I enquired about this during a recent campaign from Get Up! and the cost per kWh was about $0.32. This is a 50% premium on what I pay now and equates to $100/MWh. I can buy RECs/STCs for less than this.

        There are of course PPA’s that are selling energy at only $0.15/kWh with a 10 year pay out and no cost up front. This is excluding storage so still unsure how you power your car at night unless you can plug in at work during the day also using 100% renewable. So infrastructure is critical as well as employers with the foresight to offer this as an incentive to their employees.

        Would be interesting to see the breakeven cost per kWh vs petrol at different prices to back up your comment. I did something like this years ago to work out comparative emissions but things have moved on since then.

    • Chris Fraser 4 years ago

      I agree with using PV energy wherever possible, but i’m buying old hydro kWh at the moment. They have an auditing system to make sure the clean energy i buy is put across Basslink into Vic (hopefully to save somebody from burning brown coal). No it’s not quite renewable, but it’s only 11c/kWh after 10pm.

  6. Neil_Copeland 4 years ago

    For the government to offer incentives, they need to care. Our current government will only see two results of incentives. The up front cost of the incentive, be it a grant or whatever and the loss of tax revenue from fuel sales. They don’t believe in climate change, so the emissions reductions don’t mean anything to them.

  7. Chris Jones 4 years ago

    Direct subsidies work, without a doubt. But they are expensive and I personally don’t like the thought of a handout for a non-essential item like an electric car. However governments could do their bit by making sure a large percentage of their motor vehicle fleet is electric. Then after 3 years they can enter them into the second hand market. This causes little price distortion and is better use of public money. Finally they could help pay for fast recharging infrastructure. Like what the RAC has done in WA with their Electric Highway. A very inexpensive investment in the future for Australian transport.

  8. Green Tostay 4 years ago

    ‘Thanks for the report – see our campaign now! The ‘EV’ a
    Alliance Community Google+

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