In Colorado, electric cars are mostly for rich people. Could federal and state politics change that?
State-level tax data shows similar differences in Colorado. From 2017 to 2020, more than 12,000 households received a government tax credit for purchasing a plug-in electric vehicle. More than 80 percent of these households reported an annual income of more than $ 100,000.
LaSheita Sayer, a Denver-based black businesswoman and electric car advocate, worries these statistics suggest that electric vehicles may be driving inequality. If only wealthy people can afford the vehicles, they alone will benefit from advantages such as cheaper transportation and lower maintenance costs.
“And they don’t need it nearly as much as the person who struggles week to week to bring food to the table,” she said.
Reduction of the sticker price
At the federal level, Democrats have made lowering electric vehicle prices a key part of their plans to combat climate change. These vehicles are still primarily aimed at a luxury market. A recent policy review found that between 2012 and 2020, the average starting price for a battery electric vehicle rose from about $ 42,000 to about $ 62,000.
The Build Back Better Act, President Biden’s climate and social law, contains tax credits designed to make vehicles far more accessible. The US House-approved version, valued at $ 1.9 trillion, includes up to $ 12,500 in incentives for mid-range car buyers. It would also make the tax credits “recoverable” so that EV buyers could claim the full value of the incentive even if they owe less federal taxes.
The current federal EV incentive is a “non-refundable” tax credit of $ 7,500. To qualify for the full incentive currently on the books, a single applicant must earn more than $ 66,000 a year – a design that benefits the wealthy.
If the bill is passed, certain electric cars like the Chevy Bolt EV – one of the most popular electric vehicle models in all of Colorado – could experience deep price cuts across the state. The car would qualify for the full potential incentive as it is made by a US unionized company. Income-eligible customers of Xcel Energy, the state’s largest electric company, can qualify for an additional $ 5,500 through EV discounts.
The final price after all the discounts? Approximately $ 14,000 before fees and taxes.
US Democratic MP Joe Neguse said those savings on a recent trip to his Boulder district could help cut climate warming emissions. Many studies have found that electric cars will help limit the worst effects of climate change, especially if the US continues to replace fossil fuels with renewables.
“That is a big reason why we have worked to convince some of our Democratic colleagues in the Senate that these provisions must remain intact,” he said.
Efforts to increase federal electric vehicle incentives hit an acceleration bump earlier this month when Senator Joe Manchin, a conservative Democrat from West Virginia, directly opposed the bill on Fox News. It is now unclear whether legislation stands a chance in an evenly divided Senate.
Colorado isn’t slowing down
Will Toor, director of the Colorado Energy Office, said he was disappointed with Manchin’s opposition to the Build Back Better Act.
To meet the state’s climate goals, Governor Jared Polis has set a goal of driving 100 percent electric light cars and trucks on the streets of Colorado by 2050, according to the Department of Motor Vehicles. Toor said the Build Back Better Act would “provide a significant boost” towards those goals, but he doesn’t see them as essential.
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“We have a lot intact at the country level, which allows us to continue anyway,” said Toor.
One example is Xcel Energy’s $ 110 million electricity transportation plan, approved by state utilities earlier this year. The company now offers $ 5,500 upfront discounts on new electric vehicles and $ 3,000 on used models as long as the price is no more than $ 50,000. To receive the discount, Xcel customers must earn 60 percent of the median income in the state or meet other income requirements.
Nadia El Mallakh, vice president of strategic partnerships, said the program has shown interest since it was launched last summer. As of December 10th, Xcel has approved 38 customers and 17 applications are pending.
Xcel Energy’s discounts come as the value of electric vehicle tax incentives in Colorado has shrunk. The original $ 5,000 tax credit was one of the most generous in the county when it went into effect in 2017. Two years later, state lawmakers extended them through 2025 with a plan to remove the discounts. It is now worth $ 2,500 by the end of 2022 and $ 2,000 from 2023 to 2025.
Unlike other state incentives, the Colorado rebate does not exclude or exclude high-income households
Luxury car models, but legislators have made separate efforts to expand access to electric cars.
Earlier this year, Governor Polis signed a $ 5 billion transportation package, including a new Community Access Enterprise funded with retail delivery fees from companies like FedEx and Amazon. State analysts estimate it will raise about $ 20 million in the coming fiscal year.
Maria Eiseman, transportation policy analyst for the Colorado Energy Office, is leading an “EV Equity Study” to guide the program based on input from the community. One question we ask is where and how should chargers be built.
“We are facing increasingly difficult problems making charging accessible to everyone who will drive an electric vehicle,” said Eiseman.
Charge in advance
For LaSheita Sayer, the decision to buy an electric car for her marketing company ZoZo Group quickly showed her the injustices of the public charging network.
Most of the private charging stations were hidden in garages or single-family homes. Far fewer were in the vicinity of apartments or rental properties. When it came to public chargers, many were in dark parking lots away from highways.
CONNECTED: Right now, the federal government is blocking Colorado from adding EV chargers to rest stops. But that may change soon
That experience led her to found Women Who Charge, a nonprofit that helps women and people of color switch to electric vehicles. She sees particular promise in the city’s plans to add additional street connections, such as a number of existing chargers in Five Points, a historically black neighborhood in Denver.
Sayer is now urging business districts to add similar chargers to Denver’s street lights. In addition to providing well-lit charging points for people without their own parking space, the connections could also serve as billboards to let less-favored communities know that they have a role to play in combating climate change.
“We’re just as interested in making a positive contribution to reducing greenhouse gases as people who are making more money. It’s just harder for this group of people to get access to the same car,” said Sayer.