PD Editorial: A more equitable EV incentive plan
As California’s transition to electric vehicles accelerates, it’s good to see the state shift incentives toward lower-income car buyers.
The state is phasing out the Clean Vehicle Rebate Project, launched in 2010, at the end of this year. It will instead expand subsidies for lower-income Californians who can’t afford cleaner, more sustainable and more expensive electric vehicles.
Under the new guidelines, Californians who earn more than 300% of the federal poverty level will no longer qualify for state subsidies when purchasing an electric car. This is a significant shift from the previous program, which extended benefits to individuals earning up to $135,000 and joint filers earning up to $200,000, with varying rebate amounts. These incentives no doubt contributed to the state’s rapid adoption of electric vehicles. As Bloomberg recently reported, EVs account for a remarkable 22% of new car sales here — a jump from 2% in just five years.
But the task now is to democratize clean transportation. To achieve this, the state must make electric cars accessible to people of all incomes. In many ways, this is the heavier lift.
Stark disparities in electric car ownership occur across California’s ZIP codes. A look at state registration figures reveals that Los Angeles County, thanks to its size and number of wealthy residents, has more newly registered light-duty zero-emissions vehicles than anywhere else.
In Sonoma County, EVs were about 18% of new 2022 registrations, but in wealthy Santa Clara County, 1 in 3 new vehicle registrations were zero-emissions vehicles. In counties like Trinity, Siskiyou or Del Norte, those percentages fell into the single digits. In Modoc County last year, the county’s lone new EV registration accounted for less than 1% of sales.
Critics of the new subsidy policies might argue that ending rebates for middle-to-higher-income buyers could discourage EV adoption. Perhaps that’s true at the margins. The fact is that many Californians can afford the more expensive vehicles. The discounts are gravy.
Meanwhile, targeting state support at buyers for whom EVs fall on the fringes of affordability will encourage more sales. Reaching those car owners is essential if the state is to achieve its goals of electrifying 35% of new vehicles by 2026, 68% by 2030 and 100% by 2035.
The statewide expansion of the Clean Cars 4 All program next year will offer income-
eligible residents up to $12,000 to replace older gas-powered vehicles with cleaner alternatives. Federal tax credits will continue to incentivize eligible buyers.
As a next step, state leaders should double down on the charging infrastructure investments necessary to bring this transition home. The state’s most populous and prosperous counties have thousands of EV charging stations, while some smaller, less wealthy counties are home to as few as a dozen, according to state energy officials. California must address this disparity so that lower-income people incentivized to buy new EVs can charge them.
California’s decision to refocus EV incentives on lower-income buyers is not just a matter of equity; it’s a step toward a more sustainable and environmentally responsible future. The state has a pivotal role in electrifying its transportation sector, and this shift in incentives reflects a thoughtful approach to ensure that no one is left behind in the electric vehicle revolution.
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