The president’s electric car order does not make buying a car easier. Here’s why.

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WASHINGTON – President Joe Biden this month signed an executive order to encourage sales of electric cars, aiming for half of new sales to be zero-emission vehicles by 2030. Alongside him are several automakers pledged to increase the manufacture of electric batteries, fuel cells and plug-in hybrid vehicles.

But buying these cars might not get any easier for the average car owner for a while, some experts and senators have said.

Ford, GM, and Stellantis (which owns Chrysler and Fiat) have pledged to ramp up production to meet Biden’s target by 2030.

BMW, Honda, Volkswagen and Volvo had already set similar goals in 2019 when they negotiated a plan to meet California standards for clean vehicles. Governor Gavin Newsom’s goal is for all new vehicles sold in California to be zero-emission by 2035.

But these automakers, who already make electric cars, can’t force consumers to buy them.

“The most direct, forward-looking change for consumers is a greater variety of electric cars,” said Ashley Nunes, an expert on how innovation affects economic markets at R Street, a public policy research organization, in a telephone interview. “And that will certainly encourage people who were previously slightly reluctant to embrace the technology, to some extent.”

Annual sales of electric vehicles in the United States have skyrocketed over the past decade, according to data from the US Department of Energy, which tracks alternative fuels. And California had 42% of U.S. electric vehicles as of December 31, 2020 – the most of any state.

Electric vehicles, which are often thought of as luxury cars, only made up about 2% of new car sales last year, according to the Pew Research Center.

Electric vehicles are expensive to buy

Until now, electric cars cost more upfront than gasoline vehicles.

In 2019, the Tesla Model 3 accounted for 50% of electric vehicle sales, according to the US Department of Energy. The starting price for this car, Tesla’s cheapest, is over $ 39,000, according to Kelley Blue Book, which tracks the car’s value. That’s almost twice the small car average in 2021.

The cheapest electric vehicle on the market is the 2021 Mini Cooper SE at just under $ 31,000, according to Edmunds, who tracks car prices.

That’s about $ 10,000 more than other small cars that depend on gasoline.

Including new and used cars, 44% of electric vehicle purchases in California were made by households earning less than $ 100,000 per year between 2011 and 2015, according to a 2019 UC Davis study.

There are federal tax credits of up to $ 7,500, depending on the make and type of vehicle, that buyers get for the purchase of electric cars. California offers discounts of up to $ 4,500 per vehicle for the purchase of an electric vehicle, depending on type as well.

Some of these incentives may end for high-income households. The Senate passed a non-binding amendment as part of the $ 3.5 trillion budget proposal early Wednesday morning to reduce tax credits for families with incomes over $ 100,000 a year and for cars that cost over $ 40,000.

“I don’t think we should subsidize the rich,” Senator Rick Scott, R-Fla told McClatchy. “That’s what we do. Half of the people who buy electric vehicles earn more than $ 70,000 a year and we give them tax relief.”

If a car buyer buys electric, however, there are savings in addition to government subsidies. Battery-powered car owners could save up to $ 10,000 over the life of their vehicle compared to similar gasoline-powered cars, according to a 2020 Consumer Reports study.

The high prices come from batteries, the cost of manufacturing of which U.S. automakers have slowly reduced over the past decade. Biden wants US automakers to continue this trend. He told McClatchy after signing the executive order on Thursday that the United States was focusing on gasoline vehicles and had fallen behind in battery production.

“China now has the market,” Biden said. “So we just have to get back into the game.”

Infrastructure

is not ready

The $ 1.2 trillion bipartisan infrastructure bill, which passed the Senate on Tuesday and submitted to the House for consideration, allocates $ 7.5 billion to build vehicle charging stations electricity along road corridors – with particular emphasis on “rural, disadvantaged and hard-to-reach communities. “, according to the White House.

There were more than 42,000 publicly accessible charging stations in the United States as of May 25, 2021, according to the Pew Research Center. Almost a third of them are in California.

The infrastructure bill could provide more than $ 384 million over the next five years to support an electric vehicle charging network in California, according to Brian Deese, White House director of the National Economic Council.

This would help people living in apartments, condos or affordable housing, as well as people who would not otherwise be able to afford to install a charging station in their home.

Still, Senator Ed Markey, D-Mass. – who is the chairman of the Senate Environment and Public Works Committee on Air Quality, Climate and Nuclear Safety – told McClatchy he was concerned that the infrastructure does not go far. enough and committed to work in other areas for “a more robust electric vehicle infrastructure”.

Are car dealers ready to sell more ZEVs?

Hang Ren, professor of consumer behavior and sustainability at the School of Business at George Mason University, told The Bee that working with dealers, who are the “middlemen” between automakers and customers, on the way of selling electric vehicles could be one of the most important. obstacles to overcome.

“For many dealers, they don’t really have all the knowledge, they don’t really have the infrastructure to sell electric vehicles,” Ren said in a telephone interview. “For them, they have to do a math to see if it’s worth it in their dealership.”

The National Automobile Dealership Association has spoken out against Newsom’s 2035 target, saying there are too many hurdles to get people to buy zero-emission cars in order to go all-electric than they do. is possible to meet an “arbitrary time limit”.


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