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California tries income cap, bigger rebate to boost electric car sales

In an effort to boost its campaign to have 1.5 million electric cars on the road by 2025, California is now only offering rebates to low- and middle-income people who buy zero-emission vehicles.

Under a law that took effect Tuesday, anyone making more than $150,000 a year will not qualify for a rebate, and the state is offering more cash back to certain low-income people who go electric.

The Golden State has about 240,000 zero-emission vehicles on its roads, according to the California Air Resources Board. It's taken six years to reach that number, and at that rate, the state will not meet the 2025 goal.

A visit to the Nissan dealership in Downey demonstrates that money isn’t the only barrier to increasing electric car ownership.

With a long black ponytail, a silver bracelet and a penchant for calling U-turns "flipping a B," salesman Gilbert Hoyos is the dealership's expert on the electric Nissan Leaf.

He's been selling Leafs since they came on the market in 2010, and he’s seen the demographics of electric car buyers slowly change. In the beginning, they were mostly wealthy and well-educated, and they knew more about the car than he did, says Hoyos. Now, he says, blue-collar customers are starting to come in for a test drive.

He says his pitch includes telling the customers that "you’re saving a lot of money from putting gas in the car, from putting maintenance on the car, having to go to smog [certification]."

Hoyos’ sales pitch aside, low-income Californians just aren’t buying that many electric cars yet. Over 75 percent of new electric car buyers make more than $100,000 a year, according to a survey of rebate recipients by the Air Resources Board.


Race is a factor, too. A recent UC Berkeley study examined the number of rebates per census tract, and found that Black and Latino areas have fewer new electric cars.

Early adopters of a new, expensive technology are often wealthy and white, says Joel Espino, an electric car expert with the Greenlining Institute, an environmental justice organization.

"The thing about electric vehicles is there is economic opportunity if you own one: fuel savings, maintenance," he says. "We saw a sort of disconnect in that it was wealthy folks who don’t really need those cost savings purchasing the cars, and we were wanting to rectify that."

So in 2014, the Greenlining Institute and others asked the legislature to put an income cap on who is eligible for the state’s electric car rebate. SB 1275 did just that, and the first caps took effect in March 2016. The legislature decided to lower the caps again this past summer as part of the massive funding package that allocated state cap-and-trade dollars to the rebate program.

Besides lowering the income cap to $150,000 a year, the new law allows households earning 300 percent or less of the federal poverty level ($72,900 for a family of four) to receive a $4,500 rebate, rather than the standard $2,500 rebate.

"We're going to need buy-in from everybody"

But the question arises: If the idea is to get more electric cars on the road to fight climate change and pollution, why does it matter who buys the cars?

Lisa Macumber, who oversees the state's rebate program at the California Air Resources Board, says there is a very practical reason: There aren't enough upper middle-class and wealthy people buying electric cars.

"In order to reach the 1.5 [million] goal, we’re going to need buy-in from everybody," she says. "It’s a significant goal. We have to focus energy on disadvantaged communities, on low income folks, just as much as we do the new car buyer."

Still, there are other barriers to getting electric cars into underserved communities besides money. Many people don’t know very much about them, and have a lot of questions.

Gilbert Hoyos says he hears those questions all the time: "Do I have to have a special driver’s license? Can I afford the maintenance? Can I understand the gauges? Does it take a lot of time out of my personal time to do what I need to do make the car work?"

To help familiarize people with electric cars, Downey Nissan takes the Leaf out into the community, at events like Downey’s recent Day of the Dead festival.

At the festival, Patty Rodriguez checks out some of the cars as people with half-painted faces wander past eating churros and carrying decorated sugar skulls. She just bought a new Chevy Cruze, and says her number one priority was fuel economy. She considered an electric car, but says they were "really expensive."

Where to plug it in?

A new Nissan Leaf starts at around $30,000. Even though tax credits and rebates can lower the price by $10,000, electric cars just seem more expensive than gas cars. Plus, the state rebate doesn’t arrive until three months later, so buyers have to front the cash for the down payment, which not everyone can do.

The Air Resources Board is aware of this problem, and has a pilot program in the Bay Area to help low-income people secure financing for new or used electric cars.

There’s another issue that’s even more complex than cost: where to plug it in? For those living in a multi-unit apartment building without a designated parking spot, plugging in an electric car can be nearly impossible. And many buildings don’t have charging stations. Because of this, just 9 percent of electric vehicle owners live in apartments, according to the Air Resources Board.

But for Daniel Delgado, who came to the Day of the Dead event, aesthetics are the biggest factor.

"They’re not very sporting looking," he says, looking over at the Leaf. "They’re not attractive cars."

Indeed, even electric car evangelist Gilbert Hoyos, the Nissan salesman, doesn’t own a Leaf. "It’s not my cup of tea," he says.

He much prefers his gas guzzling Ford Thunderbird.

"I love my car," says Hoyos. "It’s a classic!"