A new age of motoring beckons. In the first nine months of 2022, Americans snapped up nearly 600,000 electric vehicles — about a 70 percent increase from the same period in 2021. Sales of gas-powered vehicles simultaneously fell, the number of charging stations soared, and EV enthusiasts declared that soon, “you will no longer have a reason not to buy an electric vehicle.”
Electric vehicles preserve the virtues of traditional car ownership (providing transportation to better jobs, better schools, and better health care to name a few) while avoiding carbon dioxide emissions that have made traditional automobiles major contributors to global warming. And though typically more expensive to buy, EVs cost less to run, are quieter, and offer a smoother ride.
No wonder President Biden is excited about them. At a recent auto show, America’s 46th president — who has committed billions to incentivize buying electric vehicles — roared, “The Great American Road Trip is going to be fully electrified.”
I’m sold. On paper, at least.
In practice, however, I’m worried. Studies show that the majority of EV owners don’t give up their gas guzzlers. In fact, nearly 90 percent of households with an EV also have a gasoline-powered counterpart in tow. More alarming, EVs are driven a fraction of the miles traveled by traditional cars. That may be because public charging stations are hard to find. Or because many electric cars can’t travel as far on a full charge as gas-powered autos can on a full tank of fuel. Whatever the reason, many Americans seem to be more enthused about buying electric cars than driving them. And that’s a problem.
EVs are more carbon intensive to manufacture than gas guzzlers, due to processing the minerals in their batteries. The only way for an electric vehicle to close this “carbon gap” and prevail over traditional cars is by racking up miles on the road. The more drivers forsake their gasoline-fueled cars and use their electric cars, the more those EVs contribute to curbing climate change. Buy an EV and continue driving your fossil-fuel car and you could be doing more harm than good.
Tackling this reality means rethinking government policy. Let’s start with EV tax credits. Prospective car owners can claim up to $7,500 in nonrefundable federal tax credits for purchasing an EV. Not only is this policy regressive (claiming tax credits entails having sufficient tax liability, something which favors wealthier households), it’s also economically wasteful. Studies show that many of these households probably would have purchased the EV regardless of whether taxpayer cash was being doled out. (The Inflation Reduction Act passed this year expands a tax credit program for EV purchases while also setting income limits on those credits. But those limits are high — individuals making over $150,000 and couples earning over $300,000 aren’t eligible — meaning some higher-income families will still benefit.)
So why subsidize these purchases at all?
If we are going to favor EVs, let’s do it in a way that maximizes emissions reductions for every taxpayer dollar spent. This means favoring consumers for whom subsidies would do the most good and who drive their cars a lot. Who are these people? Lower-income Americans.
Not only do America’s poor struggle to afford an electric car, but they are also less likely to own more than one car, regardless of type. Fewer cars in a household centers the bulk of household travel — for many families, tens of thousands of miles annually — around the primary car. And that’s what we want — or more precisely, what we need — from EVs to lower carbon emissions.
Getting lower-income Americans to drive EVs matters for another reason. Some of the dirtiest cars in America are owned by less affluent Americans. The reason? They can’t afford newer, cleaner, more fuel-efficient ones. Consequently, if using EVs to lower emissions is the name of the game, adoption should be encouraged where it would matter most. And that’s at the doorstep of America’s working class and poor.
Getting these individuals to go electric requires, among other things, cheaper EVs. Electric car prices have been dropping, with some costing less than $30,000. We need to incentivize automakers to produce “no-frills” — not just luxury — EVs. Second, those buying these EVs should get financial relief at the point of sale. No mail-in-rebate checks that arrive months later, no tax credits that require high earnings and can only be claimed when filing your taxes. Instead, financial relief for going electric should be forked over with the car keys.
Government should also incentivize so-called “dual-car households” — households that own both gas and electric cars — to cover more of their miles using EVs. Building more public charging stations is one way to do this. The infrastructure bill passed last year included $5 billion for building charging stations along interstate highways, but it remains to be seen how many states take advantage of the program.
Some may argue that cars should be replaced with a reliable public transportation system — buses, trains, ferries, and trams — that can be both more eco-friendly and cost effective. Perhaps. But building extensive systems may not be possible in many rural and suburban communities. Moreover, escaping poverty tracks strongly with car ownership. Riding the bus, not so much. For many people, escaping poverty will require owning cars. And if they’re going to own cars, they might as well own a green one.
Ashley Nunes is director for federal policy, climate, and energy at the Breakthrough Institute and research fellow at Harvard Law School.