For all the commercials you see touting this electric car and that electric car that is out or coming out, all of them are expensive and not meant for your average citizen, but for someone who has $40k, $50k, $60K, and up to piss away on an EV as their fun car. Because most of them will have a fossil fueled vehicle for actually going somewhere. If you’re taking a long drive, how many Teslas do you see on the highway?
To combat climate change, electric cars have to be cheaper
Most drivers of electric cars are wealthy, and most electric cars are luxury.
Why it matters: To effectively combat climate change, the opposite needs to happen: electric cars need to become affordable and broadly appealing so the masses can and want to buy them. Only with mass adoption will heat-trapping emissions steeply decline in America’s most polluting sector.
The big picture: The stereotype of rich Californians driving their Teslas isn’t a bad thing—at least not yet. It’s part of the cycle of new technology costs. Wealthy drivers are helping drive down the cost of new electric-car technologies by being able and willing (and subsidized by governments) to be early adopters of these vehicles.
They are? Driving to what? From $50k to $49k?
By the numbers: Of the 11 newest battery electric vehicles introduced in the U.S. between 2018 and 2020, eight are luxury vehicles.
- The average starting price of an electric car has increased over the past eight years, despite battery costs plummeting. The average price in 2012 was about $39,000. Last year, it was $52,000. (The cost of gas-powered cars is generally trending up too.)
- The average salary of an electric-car owner in California is $174,000, more than double the national average.
- Teslas, which make up more than 70% of the electric-car market, have even wealthier drivers, with average incomes of more than $300,000, Hardman’s research has found. (Multiple requests for comment to Tesla were not returned.)
There were few options in 2012, mostly the Nissan Leaf. That hasn’t changed all that much, and most are from what we call “high-line” manufacturers. BMW, Lexus, etc. Average folks aren’t going to go for a loan that would be $981 a month for 5 years (based on that $52K number above), and banks aren’t going to extend credit on one to quite a few people. They will say “this is beyond your budget. No.” People aren’t even going for plugin hybrids, why would they go for pure hybrids?
Driving the news: The Biden administration is proposing to invest $174 billion into electric vehicles and related charging equipment, including giving consumers point-of-sale rebates to buy American-made electric vehicles.
- This is key to attract lower-income buyers. Although the lifetime cost of owning an electric car can be lower than its gasoline counterpart, the sticker price remains higher, dissuading lower-income drivers, Hardman says.
The tax credits, which are mentioned, mean little, as they just reduce a taxpayers liability, not give them actual cash equal to $7,500. Even if they said “we’ll pay the bank $7,500 directly”, you’re still talking over $800 a month, with the banks still denying.
“When you take away the incentives, I just think you could really harm those that are on the fence,†said Eileen Tutt, executive director of the California Electric Transportation Coalition, a group of companies supporting electric cars. “If we eliminate this program now, that could ripple across the U.S. and really harm the market.â€
The bottom line: “Let’s be real. We’re not even close to meeting our goals,†Tutt said of California’s aspirations. “We’ve got to get to a new set of consumers.â€
Incentives do not matter to those who would still not be able to afford them, and find them to be rather inconvenient for actual life. Some people can afford an Accord or Camry as their first vehicle, maybe an Odyssey or Sienna, and have a motorcycle for fun. An EV is that motorcycle, but, their first car is also really expensive.
Read: Axios: Electric Cars Are Rather Expensive And Playthings For The Rich, You Know »