{"id":119586,"date":"2021-08-09T18:40:02","date_gmt":"2021-08-09T18:40:02","guid":{"rendered":"https:\/\/fin2me.com\/?p=119586"},"modified":"2021-08-09T18:40:02","modified_gmt":"2021-08-09T18:40:02","slug":"electric-cars-for-everyone-not-unless-they-get-cheaper","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/electric-cars-for-everyone-not-unless-they-get-cheaper\/","title":{"rendered":"Electric Cars for Everyone? Not Unless They Get Cheaper."},"content":{"rendered":"
SAN DIEGO \u2014 Robert Teglia bought a Tesla Model 3 sedan even though he knew it cost more than many luxury cars. He didn\u2019t particularly care that it might be better than the others for the environment.<\/p>\n
Mr. Teglia, a commercial real estate appraiser in San Diego, tallied the costs of a gasoline vehicle and a Tesla, and he realized that even after paying more to buy a battery-powered car, he would end up saving money on gas and maintenance.<\/p>\n
\u201cI\u2019m a Tesla buyer who didn\u2019t buy it for altruistic reasons,\u201d Mr. Teglia said. \u201cI bought it just because I think it\u2019s awesome.\u201d His wife, Dianne, bought one, too.<\/p>\n
Their decision illustrates the challenge President Biden and automakers face as they push Americans to go electric to help address climate change. These cars cost much more than gasoline vehicles, which can deny the thousands of people who would want to buy an E.V. \u2014 regardless of reason \u2014 to be able to actually purchase one.<\/p>\n
At the high end, a Tesla Model S starts at more than $80,000, and at the low end, a Chevrolet Bolt starts at $31,000 \u2014 nearly $10,000 more than a larger gasoline-powered sedan like the Chevy Malibu.<\/p>\n
A federal tax credit can lower the sticker price by as much as $7,500, but it no longer applies to Tesla and General Motors models. In addition, some Americans do not owe enough in income taxes to take advantage of the credit, and others can\u2019t manage to pay thousands of dollars in anticipation of a refund the following year.<\/p>\n
As a result, many Americans cannot buy one E.V., let alone two like the Teglias, because they cannot make the large investment needed to reap savings that the cars can deliver on fuel and repairs.<\/p>\n
Mr. Biden said last week that he wanted half of new cars sold in the country to be battery-powered by the end of the decade. But that ambitious target could be hard to meet. Less than 4 percent of new cars sold in the United States in June were electric, a far lower rate than in China and Europe, which offer more generous incentives and have stricter auto regulations.<\/p>\n
The Biden administration wants to invest billions of dollars to build charging stations for E.V.s and to lower the vehicles\u2019 cost. But the bipartisan infrastructure bill in the Senate would authorize only $7.5 billion for chargers, half of Mr. Biden\u2019s original request, and it does not expand incentives for E.V. purchases.<\/p>\n
Automakers have pledged to support the transition with dozens of new models. G.M. said in January that it would stop producing gasoline cars by 2035. Ford Motor, Volkswagen and others are also aggressively pushing into E.V.s.<\/p>\n
To achieve those aggressive targets, Mr. Biden and the automakers will need to secure something more elusive: buy-in from drivers.<\/p>\n
Consider Carmel Valley, Mr. Teglia\u2019s well-to-do neighborhood in San Diego. Vehicle registration data compiled by Drive Dominion, a research firm, found that there are more Teslas registered in the 92130 ZIP code, which includes most of the neighborhood, than in all but two others in California, in Palo Alto and Orange County. Banks of electric vehicle chargers have mushroomed in the neighborhood, including 18 Tesla Superchargers atop a parking garage at a mall, One Paseo.<\/p>\n
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The Times interviewed more than a dozen electric vehicle owners in this part of San Diego, and only a few cited environmental considerations as the primary motivator for buying an E.V. Many were drawn in by technological novelty or were persuaded by friends and family members.<\/p>\n
The people here are not Hollywood stars or billionaire tech entrepreneurs who might own Ferraris and private jets. But they are well off. The median household income in the area exceeds $165,000, and half the homes are valued at more than $1 million. Eight in 10 residents have at least an undergraduate degree. As early buyers with high incomes, they can easily take advantage of the federal E.V. tax credit.<\/p>\n
The incentives are, in effect, \u201csubsidizing my luxury,\u201d said Mr. Teglia, who also has solar panels on his home. The Model 3s he owns sell for about $40,000 before government incentives.<\/p>\n
Dr. Jack Hsiao, an obstetrician-gynecologist, had avoided buying an electric vehicle for fear that he wouldn\u2019t be able to drive very far before having to plug in \u2014 a phenomenon known as range anxiety. But his sister, who moved to California from Texas and bought solar panels and a Tesla, persuaded their father, who lives with Dr. Hsiao, 54, to buy one, too. Following his family, Dr. Hsiao bought a Tesla and solar panels.<\/p>\n
\u201cGas prices have just gone through the roof, and so, given that I\u2019ve got the solar panels, it cost me next to nothing to charge,\u201d he said. \u201cFor me, it was just a perfect fit.\u201d<\/p>\n
Elaine Borseth, a retired chiropractor, is another convert. Before she bought a Model S, she had never spent more than $20,000 on a car. But after seeing several of the big, sporty sedans on the road, she drove one about seven years ago. \u201cI thought they were sleek and sexy,\u201d said Ms. Borseth, who now runs the Electric Vehicle Association of San Diego.<\/p>\n
\u201cIt\u2019s almost one of those cases where the more you see, it just kind of breeds upon itself,\u201d she said to explain why her neighborhood has so many electric cars.<\/p>\n
Research backs up her intuition. Word of mouth plays a major role in car buying decisions. A 2017 study commissioned by the California Air Resources Board, a state agency, found that neighborhoods that were early to adopt electric vehicles continued to buy them at higher rates, suggesting that both socioeconomic status and exposure to the vehicles play a role.<\/p>\n
\u201cIt\u2019s not about the Super Bowl ads, it\u2019s about listening to other people, and that\u2019s why it takes time,\u201d said Gil Tal, director of the Plug-In Hybrid & Electric Vehicle Research Center at the University of California, Davis.<\/p>\n
The places furthest along in switching to electric vehicles typically share three traits, he said: They have high-income individuals, many single-family homes, and early adopters who introduce the idea of going electric to others. People rarely give just one reason for buying electric, Mr. Tal said. They tend to argue that electric vehicles are fun, fast, easy and, as an added bonus, good for the environment.<\/p>\n
\u201cWe never find someone who\u2019s like \u2018I don\u2019t care for the environment, it\u2019s only about the 0 to 60\u2019 or someone who says, \u2018It\u2019s only about saving the $20 a week,\u2019\u201d he said. \u201cIt\u2019s the bundle that works for people.\u201d<\/p>\n
Interest in electric vehicles is growing, but concerns about how far the cars can travel on a charge and about the availability of public charging stations keep many Americans from taking the leap. And then there is the cost.<\/p>\n
While many electric and hybrid vehicles qualify for the $7,500 federal tax credit, the value of the credit varies by brand and model, which can be confusing. Making the incentive uniform and turning it into an rebate that lowers the purchase price \u2014 an approach states like New York and New Jersey take with their incentives \u2014 would do more to encourage E.V. purchases, policy experts said.<\/p>\n
\u201cThere\u2019s just lots of reasons why a direct consumer rebate or \u2018cash on the hood\u2019 is a really important incentive,\u201d said Ben Prochazka, executive director of the Electrification Coalition, a Washington nonprofit group that advocates greater use of electric vehicles. \u201cIt\u2019s clear, very clear for everybody, the buyer and the person who\u2019s selling.\u201d<\/p>\n
Scott Eng and his wife, who live just a few miles south of the 92130 ZIP code, considered an electric vehicle when they were car shopping this year. Still, they ultimately couldn\u2019t justify the cost of buying a new car, said Mr. Eng, the pastor of a nondenominational church. With few used electric vehicles to choose from and no easy way to gauge the health of a car\u2019s battery, they bought a used hybrid Chevy Volt to match the one they already have.<\/p>\n
\u201cThe Volts work for us right now, but we would ideally like full electric,\u201d he said.<\/p>\n
Automakers and their suppliers have steadily reduced the cost of batteries, which are the main reason electric vehicles are expensive. But it will probably take several years or more for E.V.s to achieve parity with gasoline vehicles.<\/p>\n
Local officials are seeking to address some barriers to the use of E.V.s. Los Angeles and Indianapolis offer electric cars through car-sharing programs and have installed chargers in communities where many people live in apartments or homes without garages or an adequate electrical panel to charge electric cars. Atlanta and Denver have begun to require at least some new homes and apartment buildings to be wired for easy installation of car chargers.<\/p>\n
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Without providing these kinds of resources, \u201cwe aren\u2019t going to see this get to our low-income compatriots,\u201d said Mayor Eric Garcetti of Los Angeles, who began driving an electric vehicle in 1997 when he got the EV1, an early G.M. model.<\/p>\n
Electric utilities are also trying to encourage use of E.V.s, which increase demand for power, by installing public charging stations. San Diego Gas & Electric says a third of its chargers are in disadvantaged communities. The utility is also testing whether electric vehicles can send power back to the grid when its needed.<\/p>\n
\u201cYou have to make it easy,\u201d Caroline Winn, the company\u2019s chief executive, said about getting people to switch to electric cars. \u201cBut you also have to educate.\u201d<\/p>\n
The Engs are moving in that direction, having just installed solar panels on their roof. Mr. Eng said he was also getting a fast-charging outlet, which will come in handy when the couple eventually buys a fully electric car.<\/p>\n
\u201cOne part of it is definitely the environment \u2014 we need to advance our technologies to get off of carbon quickly,\u201d he said. \u201cPart of it, too, is that I\u2019m pretty practical in terms of finances, and we\u2019re saving tons of money on gas.\u201d<\/p>\n