California wants everyone to drive electric vehicles. How will low-income earners carry it? | California

When Graciela Deniz worked as a health educator in a medical office in Kerman, CaliforniaLooks like all the doctors drove a Tesla.

Denise, 32, assumed electric cars were a luxury for high-income people, until she started a new job last year as a community health worker at the Central California Asthma Collaborative. The organization participated in the EV Equity Program, an initiative to help low-income residents of the San Joaquin Valley purchase electric vehicles.

By switching to EV, Denise was hoping to save money on gas and reduce its contribution to the high levels of air pollution in the San Joaquin Valley, which contribute to some of the highest rates of asthma in the state. At that time, her daughter was diagnosed with asthma. “I learned about the link between environment and health,” Denise said. “But that was when I actually completed the circuit for me.”

The EV Equity Program helped Denise find an electric vehicle that fit her needs and guided her through the application process for two income-based grants from the California Clean Driving Assistance Program (DCAP) and the Clean Vehicle Discount Project (CVRP). She received a total of $9,500 down payment and purchased a Chevrolet Bolt EUV in July 2021. With fewer gas-powered cars, Denise and her husband were able to cut their fuel budget in half.

But a lot has changed since Denise bought her electric car — two state-funded assistance programs for low-income buyers have closed after money ran out. The average price of an electric vehicle in the United States hit $66,000 this summer, and low-income earners are struggling to compete for cars in a hostile market with high prices and sparse inventory. Strong demand for electric vehicles has been exacerbated by gas prices, which again averaged $6.43 a gallon in California last week.

Graciela Deniz and her daughter opened the car door
Graciela Deniz purchased an electric car to reduce fuel costs and to help alleviate air pollution problems in her community. Her daughter, Viviana, suffers from asthma. Photograph: Gabriella Aoun/The Guardian

As California undergoes an ambitious transition to electric vehicles — in August, the state announced it would do so Banning the sale of new gas-powered cars By 2035 – Low-income Californians risk being excluded from the electric vehicle transition, despite getting the most out of it. Electric vehicles are less expensive to operate and maintain, are more reliable and do not contribute to air pollution, which disproportionately affects disadvantaged communities. But with financial assistance programs facing challenges and market pressures intensifying, those who need them are more likely to be left behind.

Low-income Americans face a greater burden — and a greater need

Low-income families in the United States spend a much higher proportion of their income on transportation. According to the Bureau of Transportation Statistics, the lowest quintile of households in terms of income They spent 26.9% of their income on transportation in 2021almost double the national average of 13.9%.

This economic burden has been exacerbated by the sharp rise in gas prices. “Inflation is crazy, and they don’t have enough money to pay for gas,” said Ervin Rivero, helpful electrician at Acterra, a Bay Area nonprofit that helps income-eligible buyers apply for incentive programs. “And if they’re on a lower income, they usually tend to travel long distances to get to work, so they’ll fill out a lot.”

Low-income people also tend to drive older, crash-prone cars. Veronica Valencia, program manager for Valley Clean Air Now (Valley Can), the nonprofit company that operates the Clean Cars 4 All (CC4A) vehicle replacement program in California’s San Joaquin Valley.

By requiring fewer repairs and eliminating the need to spend money on gas, oil changes and engine repairs, electric vehicles can be a valuable tool in promoting upward mobility for low-income families. “We’ve already gotten emails saying, ‘Now that I have a reliable car, I’ve been able to get a better job, and I’ve got a house,'” Valencia said.

But electric cars are still far too expensive for low-income earners, even if they’re pre-owned. Average price of a used electric vehicle Exceeding $40,000 In July of this year, according to Recurrent, a tech startup in the used electric car industry. Financial assistance in the form of advance grants can provide a critical means of closing the affordability gap.

Hundreds of millions in aid – but not enough

California has spent more than $400 million on various incentive programs to help low-income drivers buy zero-emissions cars. There is the CC4A program, which offers up to $9,500 down payment for an electric vehicle if the applicant turns in a vehicle older than the 2005 model year. CVRP offers a $4,500 discount on new electric vehicles to income-qualified applicants. Before closing in 2021 due to funding issues, the Clean Vehicle Assistance Program (CVAP) offered $5,000 in grants for the down payment of a new or used zero-emissions vehicle. There are also many incentives offered by local governments and utility companies.

young man on laptop outdoor
Irvin Rivero is conducting a one-on-one consultation on Zoom with a potential electric vehicle buyer in San Jose. Photograph: Gabriella Aoun/The Guardian

“Sometimes you can get a used EV for free if you really qualify and stack grants,” said Linda Hutchins Knowles, senior director of e-mobility and advocacy at Acterra.

But this requires knowing that the programs exist in the first place, and being able to identify all scholarships for which you qualify and successfully navigate the application process. Organizations like Acterra and Valley can run grassroots campaigns to raise awareness of the programs in underserved communities and provide language and computer assistance to help people apply for them.

“You have to have time to educate yourself, apply, follow up, file paperwork, and that’s stressful for someone who works two jobs only to pay rent,” Hutchins Knowles said.

She said the frustration was exacerbated when someone invested the time to go through the application process, only to discover that they had run out of money.

Max Perez was in the market for his first car after graduating from college in 2020. He wanted to buy an electric car to reduce carbon emissions. After attending one of Acterra’s media workshops, he applied for the $5,000 CVAP scholarship and received a letter a few months later. The program has run out of funds and is temporarily closed. About 3,200 people were placed on the waiting list.

“I was very disappointed,” said Perez, 24, of Alameda, California. “I could only fund for one year and finish paying for it.”

There was another scholarship program available – the Clean Driving Assistance Program, or DCAP – but Perez found the application too complicated and gave up. He eventually collected a down payment and financed a longer loan for a used Chevy Bolt. Last month, DCAP ran out of money, too.

Even before the closure of down payment assistance programs, financial incentives were not always sufficient, and some programs did not meet the needs of disadvantaged communities. The $7,500 federal tax credit helped very few low-income buyers, because they actually paid little or no taxes. The $4,500 CVRP rebate wasn’t available until after a car was purchased, and most low-income buyers needed help up front to afford a down payment. CVAP gave recipients 60 days to buy a car — but the highly competitive auto market made finding a qualified electric vehicle in that time frame nearly impossible.

Quentin Nelms, 43, a low-voltage technician in the Tulare School District in the San Joaquin Valley, is eligible for the $5,000 CVAP grant in January, before the program closed. But when he started shopping, Nilms found that prices for electric vehicles at dealerships who participated in the grant program had gone up by as much as $12,000.

man next to the car
Quentin Nelms received a $5,000 grant for an electric car, but due to dealer tags and a lack of inventory, he wasn’t able to find one within his budget before the grant expired. Photograph: Gabriella Aoun/The Guardian

“I started by telling the dealers, ‘I don’t think it’s fair that you are part of this program and now you are charging,'” he said, ‘because I made the time and I work on this grant program and you absorb the entire grant.’

When Nilms didn’t find a car in the 60-day window, the program gave him six months. By August, Nilms was still unable to find a car available within his budget. He will have to wait until the CVAP reopens to apply again.

Thousands on the waiting list

The California Air Resources Board (CARP) administers electric vehicle incentive programs in the state, and agency representatives said they are working to reform the incentive programs and address issues that have caused some to close prematurely.

Carb representatives and equity advocates said the rapid depletion of CVAP and DCAP funds is largely because many people whose incomes were close to the maximum — 400% of the federal poverty level — enforce that there was no money left for people who are yesterday the need. .

“The first-come, first-served model doesn’t prioritize anything,” said Lisa McCumber, Air Resources Supervisor at Karp. “Departing from this paradigm is really important to prioritizing equity.”

Macumber said that when CVAP reopens, it will use a needs-based model that will put applicants with the lowest incomes at the front of the line. It would also merge two of the programmes, so that applicants would need to fill out fewer applications. High-needs applicants will be assigned a case manager to help them apply, and grant amounts will increase so those most in need can receive up to $15,000 in advance assistance.

McCumber said she hopes to reopen CVAP in the spring of 2023.

Meanwhile, interest in electric vehicles among the most needy buyers continues to grow. Knox said Valley Can has a waiting list of about 1,500 completed applications for the vehicle replacement program, with another 1,500 applications processed. To increase equitable access to electric vehicle fees, Valley Can is also working with the state on a new pilot program that distributes preloaded bank cards to help drivers pay public fees.

As for Denise, six months after she bought a Chevy Bolt EUV, she’s still glad it made the change. “I certainly had no remorse from the buyer,” she said.

Last month, she and her husband took their daughter on a trip to the Central Coast. “In our Jeep, the fuel price for that trip was only a few hundred dollars.”

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