Published on January 29th, 2014 | by Jo Borrás


California Offers Electric Car Subsidies For Low-Income Families

January 29th, 2014 by  

Originally published on Planetsave.

CARB electric car subsidies

Hybrid and electric cars can make a huge difference in reducing local air quality, and can help their owners save money while staying more insulated against the volatility of fossil fuel prices. Unfortunately, most plug-in electric cars cost more than the used cars that lower-income families and communities — the people who could most benefit from EV fuel savings, in other words — can typically afford. It doesn’t have to be that way, however, and California’s Air Resource Board (CARB) is working to help low-income families get access to EVs by proposing vouchers for such families starting at $2500.

CARB’s vouchers address the fact that the average US household spends on average anywhere between $9,000 and $10,000 each year on transportation energy — for a single-earner making $20-30K per year, that number represents a serious lack of mobility and freedom. With net operating costs approaching zero for cars like Nissan’s Leaf in some cases, electric car ownership could go a long way towards enabling low-income wage earners to get better education, as well as better access to healthy food and healthcare.

These low-income families would also be able to get to a number of private-sector jobs that, without an EV, would be off-limits to them. That means they’d quickly pay back CARB’s $2500 voucher through increased income, payroll, and sales taxes (as they participate in the economy to a greater degree). Not a bad investment for California at all, if you ask me!

It’s also worth noting that, while this is not the first voucher program CARB has created, it is the first that specifically targets low-income families who would like to reduce their carbon footprint and transportation costs through the benefits electric cars offer, but currently can’t.

Here’s more on the official CARB program in official-sounding law-talk, with more specific numbers explained. Enjoy!

This CARB program would be part of the Extension of Clean Vehicle Programs and covers the following;

AB 8 clears the way for 10-year extensions of several clean vehicle rebates enacted by AB 118 in 2007, including the Air Quality Improvement Program and the Alternative, Enhance Fleet Modernization Program and Renewable Fuel and Vehicle Technology Program. The new law focuses on voluntary trade-ins of high-polluting vehicles by supplying $1,000 incentives to EFMP participants, and $1,500 incentives to EFMP participants with a household income at or below 225 percent of the federal poverty level.  SB 459 also called for specific steps to ensure vehicle replacement in areas designated as federal extreme non-attainment.

The law enables these extensions to clean vehicle programs by authorizing increases to vehicle registration fees and surcharges into 2024. The law further authorizes the California Energy Commission to supersede the California Air Resources Board (CARB) in managing the deployment of 100 new hydrogen-fueling stations over the next 10 years using $20 million annually. The law also provides a new source of funding for the Carl Moyer Memorial Air Quality Standards Attainment Program by establishing a new $0.75 surcharge on tire purchases, which is projected to raise $34 million over the next 10 years.

Under SB 359, CARB will receive an additional $48 million in 2014 to continue funding monetary incentives administered through the Clean Vehicle Rebate Project and the Enhanced Fleet Modernization Program (EFMP). The new law focuses on voluntary trade-ins of high-polluting vehicles by supplying $1,000 rebates to EFMP participants, and $1,500 rebates to EFMP participants with a household income at or below 225 percent of the federal poverty level. SB 459 requires CARB to update EFMP guidelines by June 30, 2015. In doing so, CARB is authorized to increase the value of early vehicle retirement and replacement rebates for low-income participants beyond existing limits of $1,500 and $2,500, respectively.

Source: CARB, via Car News Cafe.

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About the Author

I've been involved in motorsports and tuning since 1997, and write for a number of blogs in the Important Media network. You can find me on Twitter, Skype (jo.borras) or Google+.

  • CaptD

    I believe that the State of CA should also extend these additional subsidies to the purchase of all electric modes of transportation (namely electric motorcycles, electric bicycles, etc.) because they would be not only be a lower cost solution that is great for all the single person commuters but they would also reduce the number of total parking spaces required.

    This is the forward thinking that for some reason, is lacking in current “future” transportation planning, since even our planners are still thinking of an automobile-sized vehicle based system!

  • CaptD

    One thing missing from this article is one or more links to exactly what income levels qualify for these subsidies.

    If our lawmakers and the CPUC were really thinking ahead they would also offer an additional subsidies for those that install BOTH solar and replace their gas vehicle! This would truly be a Win-Win for both CA and them.

  • Gary Richardson

    Let the insurance companies manage the risk of EV and renewable investment failures as part of the cost of financing. If the vehicles have auto driving features incorporated into the vehicles, this can substantially reduce risk of accidents and lower costs to insure. The added insuring of reliability makes up for lost revenue of lowered accident premiums but provides good cash infusion to bolster EV/Charging purchases. I would trust that the insurance companies can do a better job of making sure the quality of the investments are as high as possible due to consolidated oversight.

    • Gary Richardson

      I think this will only work if the dealerships are taken out of the equation similar to how tesla handles purchases.

    • Bob_Wallace

      I wonder if auto insurance companies might be looking at some sort of business interruption similar to what utilities are starting to experience?
      Self driving cars, just the collision avoidance warning systems, are likely to make drastic cuts in accidents. The idea of adding kill switches which can be remotely triggered could large eliminate car thefts.

      Car insurance might just roll into homeowners/renters policies as part of the personal property coverage.

  • Gary Richardson

    With some of the EV’s such as Tesla cars having a higher resale value, it may be worthwhile to come up with a financial proposal similar to a micro-investment that pays a dividend and has a share value based on the proportion of investment. Same goes with micro-financing a community solar to pay for charging costs with returns at or near wholesale prices to be fair with utilities. I think this may work because too many people are at risk of defaulting on a car loan due to problems staying employed/earnings consistency.

  • SirSparks

    I think in theory it is a great idea, however in practice it has little chance of success unless the Carb deal comes with financing

  • Bob_Wallace

    Many working people live in houses. They will have places to plug in. Your apartment argument applies just as much to higher income level city people.

    We will need to wire apartment and public parking as time goes along. For now roughly half of all US drivers have a place to plug in and those people will be the ones most likely to buy an EV or PHEV.

    Battery problems in high temperatures has been a very small problem and seems to have been fixed. There will be problems with any new technology, we’re only a couple of years into the modern EV era and lessons are being learned.

    • Kyle Field

      I agree that most “low income” families that would fit into this program would likely not be living in a house that they own, making charging difficult. We still have a ways to go for other charging solutions to shape up.

  • Gary Richardson

    You deleted my post without challenging me?

    • Bob_Wallace

      No, for some reason your comment was put in the spam folder by Disqus.

  • Kyle Field

    What a ridiculous idea. There’s nothing about being poor that relates to needing an electric car. The whole purpose of a government incentivising a technology is to seed the tech with funds in order to get that tech out into the world. …but why they would feel the need to spend even more on a single car so that low income families can afford a car that not even middle class families can afford with rebates available at their income level seems absurd. meh

    • not sure why you say that middle class families can afford EVs. about half the EVs on the market cost less than the average new car.

      as far as helping the poor with EV subsidies, i think it makes plenty of sense. 1- the operational costs of gasmobiles are a huge burden on poor families, especially when they own old & inefficient cars. 2- the health costs of driving old, polluting cars is also a burden. 3- stimulating more EV purchases, whether from the rich or the poor, helps the industry to mature.

      but that’s just my 3 cents. you’re welcome to your own.

        • Gary Richardson

          Your arguments are too one sided and there is contradicting evidence to these claims.

          • sorry, you’re going to have to be more specific than that. your general comment doesn’t seem to make sense.

          • Gary Richardson
          • Bob_Wallace

            Please don’t drop links.

            If you have a point to make then make it in your own words.

          • Gary Richardson

            I can say the same to Zachary too

          • Gary Richardson

            That’s fine, I can avoid dropping links. However, I may choose to quote others in agreement as reference when I feel there is credibility to their claims. That should be fair.

        • Gary Richardson

          I have concerns with quality and promises on new cars, from the manufacturer to the dealership. The Chevy Volt and Tesla cars seem alright but still expensive. The other EV’s I have a wait and see attitude on. Ford may also make a reliable EV as well and worth taking a risk on. However, I have had some bad experiences with Electric Bicycles, Hyundai cars, and dealership honesty/integrity. I don’t want to see others get burned in similar fashion to my experiences.

        • Gary Richardson

          This evobsession link feels too good to be true is my point….
          Just a bunch of seeming half truths…

        • Gary Richardson

          If a car sits for one week in extreme weather without thermal management, this may significantly reduce battery life and no one I know of is addressing this concern directly. The Nissan Leaf with it’s Lithium Polymer battery may be more temperature tolerant than the other battery chemistries. However, it is too early to tell if Nissan has figured out ways to deal with non-use.

        • Gary Richardson

          A 40 mile commute or even a 100 mile range is not really that practical. A 200 mile + range is much better and gives a better sense of freedom. Especially if you forget to charge your battery or want to take a road trip on a whim to a remote location.

        • Gary Richardson

          I have an electric bicycle and committed my last 2 years to a discipline of living within the limits of this bike and arranging back up when things go wrong. So, I do know what needs improvement and see similar concerns with EV’s.

      • K. Lam

        The poor don’t have access to EV’s, not because of the cost of EV’s, but because the 2nd hand EV market hasn’t matured yet. The Nissan Leaf has only been out for a little over 3 years, and they’re barely coming off of lease. As more used EV’s come into the used car market, there will be more choices for them … sans subsidies.

        Secondly, the most environmentally beneficial option for anyone, rich or poor is mass transit or bicycling.

        Buying a new car is the worst way for poor people to spend their money. This subsidy is nothing more than a gift to the people who scam the system by declaring they don’t make enough money to support themselves.

        Those who actually are poor, aren’t pining for a new shiny toy. It’s only the morally poor who want this.

        • Bob_Wallace

          Best you hope that you don’t get the dose of karmic justice you seem to deserve.

          Just imagine. You suddenly lose your “special position” and find yourself an hour and a half and three bus transfers from your low paying job that you could get to in 20 minutes if you had some affordable wheels.

          I wonder if you’d then consider yourself morally poor….

          • K. Lam

            I’ve biked 12 miles to work regularly at one point in life. I’ve ridden the bus at another, when I didn’t have a car. It ain’t the end of the world.

            I currently drive a Leaf. Although I love driving it, the operating costs aren’t on the cheap end. Because I have a garage, I can charge at 11 cents / KWh. But without that, I’d have to rely on Blink or ChargePoint to provide me power at ~40 cents / KWh. at 250wh/mile, that would be ~10 cents / mile to drive an EV. A hybrid prius costs only 8 cents / mile to operate.

            Next, poor people don’t qualify for the $7500 federal tax rebate, so their purchase price is at least $26k, which is much more than an equivalent new hybrid. Unless you are expecting the state to cover that difference?

            Also, the super-off-peak rates only applies between the hours of 12am-6am. Outside of those hours, it’s more. So now you have to throw in an additional $700 (for the evse alone, since I’m assuming they don’t have the money to pay an electrician $500+ to run the cables and install it for them).

            Yes, the circumstances make it so that the rich gets richer, but this proposed subsidy doesn’t help the financially poor one bit. Only people who under-report their income (and have the actual capital) can take advantage of this.

            I got to where I am now honestly for all my life (wage-earner since I was 15), so karma has nothing on me.

        • Sorry, i’m a huge proponent of bicycling and transit — have been car-less for ~10 years — but some people do need cars in order to survive in modern society. To ignore that is to ignore reality.

          • K. Lam

            For those who need a car to survive, they either need to commute far distances, or have needs that requires a specialized vehicle, right?

            Correct me if I’m wrong, but aren’t there already programs to assist those who have special vehicle needs?

            As for the long-distance commuters, if they’re poor, then chances are that they live in an apartment. This then goes back to my earlier point about the cost of public chargers actually making an EV more expensive to operate than a hybrid.

            The current fleet of EV’s are essentially technology proving grounds. As batteries improve, and costs are driven down, their affordability will go along with them. To the point where everyone can afford them WITHOUT state assistance. Until then, it’s essentially tax dollars to support a few company’s R&D (Nissan, Ford, and Chevy).

            For any cases outside of these two, the more appropriate assistance would be for A vehicle (any vehicle), regardless of the method of propulsion.

    • Bob_Wallace

      Nothing ridiculous about putting working people into reliable transportation that improves their lives.

      • Kyle Field

        I don’t generally equate working people as a whole to “low income” which may be the disconnect here. As an established middle class worker bee (a few years into a mortgage, both cars paid off, kids in daycare yada yada) I dont feel that I can afford a Leaf. I understand that if we were to buy a new car (and the one that I want, not my wife 😉 ), the leaf would be a very attractive option and more than likely, the best option for us. I would rather the govt funds go to further subsidize this tech for the masses (reinforce existing rebates (federal tax credit, state rebate, etc), continue others (car charger rebates, fund public charging stations etc) than to create programs specifically for low income families. As noted in other comments, low income families are not financially suited to purchase a new vehicle – if they can afford a nissan sentra new, they can already afford a nissan leaf (roughly speaking) otherwise, the used market is still available and will continue to be as these cars make it into that market. There are other issues as well that make this a less than attractive proposal for me as a taxpayer…but not worth bickering about.

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