It would be very easy to write about sexy EVs and why they are so much fun and, quite frankly, attractive vehicles. In recent months I have begun seeing some highly anticipated EVs on the road in my hometown of Fresno, CA. For example, the Rivian R1T and R1S, Lucid Air, and the very exciting Tesla Cyber Truck. I am a car enthusiast, who has spent more Saturdays than I care to admit with my dad and grandfather restoring classic cars or going to car shows. The progression of cars over the years is fascinating to me and one I thoroughly enjoy watching.
However, I want to call attention to a topic of conversation that has been circulating amongst my closest colleagues. This topic has to do, in part, with why EVs are not selling with the fervor we originally thought they would; particularly in the San Joaquin Valley.
There are a lot of reasons for this. However, if I had to pick on one main issue, it is affordability.
The San Joaquin Valley has the highest concentration of SB 535 disadvantaged communities in the state of California. In a nutshell, an SB 535 disadvantaged community is defined as, “…areas disproportionately affected by environmental pollution and other hazards… with concentrations of people that are of low-income, high unemployment, low levels of home ownership….” If you would like to take a deep dive into SB 535, visit this page. I would also like to invite you to take a look at the SB 535 CalEnviroScreen map here.
Let’s take a second to appreciate what this means in the real world: those who are the most impacted by the negative effects of air pollution are not in a financial position to do much about it.
Let’s talk numbers. The average cost of a new electric vehicle as of September 2024 was $56,351 which is 16% higher than the average cost of a fuel combustion vehicle. This price disparity has held steady in recent years. In order to do a true cost comparison between EVs and fuel combustion vehicles, you have to look at the total cost of ownership.
This article by Car and Driver magazine does a very good job of looking at all the aspects of ownership costs in multiple EVs and their fuel combustion counterparts. Unfortunately, there is not a straightforward answer to the question of whether it is cheaper to own an EV than a fuel combustion vehicle and it depends on the vehicle you are comparing. For example, Car and Driver found that the total cost of ownership for a Ford F-150 Lightening is less than the cost of ownership of a Ford F-150 by about $2,664. This difference becomes more dramatic when you account for the available federal tax credit. The Ford F-150 Lightening becomes even less expensive by $10,164 (Car and Driver, 2022).
However, these longer-term cost of ownership arguments become less compelling to someone more preoccupied with immediate concerns, such as the rising costs of food and rent, especially as they consistently outpace wages. As a nation, we are moving forward with our electrification initiatives and lessening our dependence on fossil fuels. These efforts are aimed to minimize the impacts of climate change primarily caused by greenhouse gas emissions. So, how do we push forward without leaving entire communities behind?
Efforts have been made to make EVs more financially attainable in recent years. One example of this is the Previously Owned Electric Vehicle (POEV) rebate currently offered by PG&E. This program offers a $1,000 rebate for the purchase of a previously owned electric vehicle and up to a $4,000 rebate for income-qualified customers. Income-qualified customers are also automatically qualified for an additional $700 rebate for purchasing eligible EV charging equipment if they apply for the POEV program. These rebates can be stacked on top of already available federal tax credits.
Additionally, beginning in January 2024, federal tax credits for EVs are offered as a direct discount. Meaning, that the tax credit is taken off the purchase price of the vehicle so buyers do not have to wait to file their taxes to take advantage of the benefits. This, in effect, lessens the sticker price at the dealership (CNN, 2023).
In addition to tax credits for new EVs, tax credits are also available for qualifying used vehicles of up to $4,000. Purchasing a used vehicle may be more attractive for those not looking to afford the initial depreciation all new vehicle owners experience in their first year of ownership.
Does this solve all our EV affordability problems? Absolutely not, however, they are small steps in the right direction.
