Pirate's Cove

Obviously, through massive government help. Government creates the problem, then provides the “solution”

California wants everyone to drive EVs. How will low-income people afford them?

When Graciela Deniz worked as a health educator at a medical office in Kerman, California, it seemed like all the doctors drove Teslas.

Deniz, 32, assumed electric vehicles were a luxury reserved for those with high incomes, until she started a new job last year as a community health worker at the Central California Asthma Collaborative. The organization was involved with the EV Equity program, an initiative to help low-income residents in the San Joaquin Valley buy electric vehicles.

By switching to an EV, Deniz hoped to save money on gas and reduce her contribution to the San Joaquin Valley’s high levels of air pollution, which contribute to some of the highest asthma rates in the state. Right around that time, her own daughter was diagnosed with asthma. “I knew about the link between the environment and health,” Deniz said. “But that was when it really came full circle for me.”

That would be smog, not CO2

The EV Equity program helped Deniz find an electric vehicle that fit her needs and guided her through the process of applying for two income-based grants from California’s Driving Clean Assistance Program (DCAP) and the Clean Vehicle Rebate Project (CVRP). She received a total of $9,500 for a down payment and purchased a Chevrolet Bolt EUV in July 2021. With one fewer gas-powered car, Deniz and her husband were able to cut their fuel budget by half.

Where are they charging it?

But much has changed since Deniz purchased her EV – two of the state-funded assistance programs for low-income buyers have shut down after running out of money. The average price of an EV in the US reached $66,000 this summer, and lower earners are struggling to compete for cars in a hostile market with high markups and sparse inventory. Strong demand for EVs has been exacerbated by gas prices that again averaged as much as $6.43 a gallon in California last week.

If you notice, the vast majority of EVs being released are in what’s called “high-line”, ie, BMW, Mercedes, Lincoln, etc. There aren’t that many for the average working and middle class folks, who can’t really charge them at their apartments.

Low-income households in the US spend a much higher percentage of their income on transportation. According to the Bureau of Transportation Statistics, the lowest quintile of households in terms of earning spent 26.9% of their income on transportation in 2021, almost twice the nationwide average of 13.9%.

This economic burden is being exacerbated by the sharp rise in gas prices. “Inflation is crazy, and they don’t have enough money to be paying for gas,” said Irvin Rivero, beneficial electrification associate at Acterra, a Bay Area non-profit that helps income-qualified buyers apply for the incentive programs. “And if they’re low-income, they usually tend to travel pretty far to their work, so they’ll be filling up a lot.”

Not mentioned is that the cost of energy is spiking, too, which means it will cost more to charge them.

But EVs are still largely unaffordable for lower earners, even if they are pre-owned. The average price for a used EV surpassed $40,000 this July, according to Recurrent, a tech startup in the used-EV industry. Financial assistance in the form of upfront grants can provide a crucial way to close the affordability gap.

And there it is: just give them money. Make them more dependent on Government, after Government created the problems.

Quentin Nelms, 43, a low-voltage technician for the Tulare school district in the San Joaquin Valley, qualified for the $5,000 CVAP grant in January, before the program closed. But when he began shopping, Nelms found that the prices of EVs at dealerships that participated in the grant program were marked up by as much as $12,000.

“I started telling the dealers, ‘I don’t think it’s fair that you guys are part of this program and you are now charging a markup,’” he said, “‘because I put in time and work into this grant program and you’re absorbing the whole grant.”

You can tell them whatever you want, they don’t have to listen. If the government gives all this money, the price of those goods will go up. That’s economics. And $5k won’t make all that much difference with an average price of $40k for used.