To fight climate change, electric cars must be cheaper
Most electric car drivers are wealthy and most electric cars are luxury. Why this is important: To effectively tackle climate change, the opposite must happen: Electric cars must become affordable and widely attractive so that the masses can and want to buy them. Only with massive adoption will heat-trapping emissions drop sharply in America’s most polluting area. Stay on top of the latest market trends and economic information with Axios Markets. The big picture: The stereotype of wealthy Californians riding their Teslas isn’t a bad thing, at least not yet. It’s part of the new technology cost cycle. Wealthy drivers help reduce the cost of new electric car technologies by being able and willing (and subsidized by governments) to be the first to adopt these vehicles. “Now we’re at a point where the technology is there, we need to start thinking about how we make sure this transition benefits everyone,” said Scott Hardman, professional researcher at the Institute of Transportation Studies at the University of California, Davis. “But I don’t think things are going in the right direction,” he added, before sharing the following statistical snapshots: By the numbers: of the last 11 battery-electric vehicles introduced in the United States between 2018 and 2020, eight are luxury vehicles. The average starting price of an electric car has increased over the past eight years, despite falling battery costs. The average price in 2012 was d ‘about $ 39,000. Last year it was $ 52,000 (the cost of gasoline-powered cars is generally on the rise too.) The average salary of an electric car owner in California is $ 174,000, or more double of the national average. Teslas, which account for over 70% of the electric car market, have even richer drivers, with an average income of more than $ 300,000, according to Hardman’s research. (Several requests for comment to Tesla were not returned.) In the news: The Biden administration proposes to invest $ 174 billion in electric vehicles and associated charging equipment, including offering consumers of point-of-sale discounts to purchase electric vehicles made in the United States. This is essential to attract low income buyers. While the lifetime cost of owning an electric car may be lower than its gasoline-powered counterpart, the sticker price remains higher, deterring low-income drivers, Hardman says. electric cars, which President Biden is also proposing to expand, has generally benefited wealthier people who have more fiscal responsibility and can afford to wait to get their money back. What They Say: The White House seems to be aware of this dynamic. Biden offers investments “in a way that is user-friendly and that enhances accessibility of incentives for the widest range of Americans,” Ali Zaidi, deputy White House climate change adviser, said in a recent interview. Last year, electric cars made up 2.2% of the U.S. auto market (up from over 4% globally), according to BloombergNEF. New laws, competition from automakers and falling battery prices will dramatically increase these costs. percentages in the coming years, according to BloombergNEF The automakers that make up nearly a third of the US market are committed to making fully electric vehicles in the coming decades, consulting firm Rhodium Group found. to buy an electric car, says Felicity Latcham, an associate partner of consulting firm OC&C, which conducts regular surveys on the topic. Cheaper electric cars are coming as automakers compete for this market. I just launched new advertising campaigns promoting new hybrid and fully electric SUVs and sedans. Offers like this will ultimately expand the market for used electric cars, which is especially important for low-income drivers. Yes, but: roadblocks remain. Ask California, America’s leader in electric cars. Its goal is to have five million electric vehicles circulating by 2030 (today there are less than one million). His 11-year-old clean vehicle rebate project was a big hit, but ran out of money last month. Over 60% of all electric vehicle owners in California have used this program.In 2016, the legislature changed the program so that low-income people can receive more incentives and richer people cannot participate in the program. has adopted programs like the one in California, although most have no income limits, which could worsen inequalities. The program has just run out of funding in part because of its popularity and the fact that he did not receive any new funds last year. donors lamented the depletion of the money and the fact that its annual funding does not allow adequate planning. Budget decisions made later this month and in June will be part of the budget decisions made later this month and in June. “When you take away the incentives, I just think you could really hurt those on the fence,” said Eileen Tutt, general manager of the California Electric Transportation Coalition, a group of companies supporting electric cars. “If we eliminate this program now, it could spill over across the United States and really hurt the market.” The end result: “Let’s be realistic. We’re not even close to achieving our goals, ”Tutt said of California’s aspirations. “We have to reach a new set of consumers.” Editor’s Note: Amy Harder is vice president of publishing at Breakthrough Energy, a network of investment vehicles, philanthropic programs, policy advocacy and other activities committed to advancing the technologies needed to achieve net emissions zero by 2050. She is launching a new journalism initiative there. Previously full time at Axios, Amy now writes her Harder Line column monthly as an external contributor. Get more Axios and subscribe to Axios Markets for free.