Can Electric Cars Shed Their Elite Reputation?

By · September 04, 2015

Tesla Model X with falcon doors

Tesla Model X

On June 25, the California Air Resources Board approved changes to plug-in car incentives to limit rebates for high-income consumers, and increase rebates for low- to moderate-income buyers. Those changes will take effect in the coming months, just as a wave of luxury EVs and plug-in hybrids come to market—most noticeably the Tesla Model X all-electric SUV.

The Model X is one of the most anticipated electric vehicles of the past couple years. The type of doors used in the Model X—so-called falcon doors that rise up and above the vehicle—are usually reserved for the most expensive supercars.

CARB’s decision in June set a cap at $250,000 per year for an individual, and $500,000 per year in annual household income. The Golden State offers a $2,500 rebate on top of the $7,500 tax credit granted by the federal government for battery-only EVs, and $1,500 for plug-in hybrids. (For more information on plug-in vehicle incentives in your state, check out our Incentives page.)

Buyers with incomes less than 300 percent of the Federal Poverty Limit will get up to $3,000 for a plug-in hybrid, and $4,000 for an electric car.

Critics of government support for electric vehicles sometimes characterize them as “high-priced toys for the rich.” While most high-earners would still be eligible to receive the subsidy, CARB chair Mary Nichols told the Los Angeles Times in late August that the cap is being set to apply only to “super-rich” EV buyers. “Our policy objective here is to rapidly increase the percentage of zero-emission vehicles in the state,” she said.

So far, the state’s Clean Vehicle Rebate Project has provided $242 million in reduced EV costs to nearly 115,000 buyers. According to the Center for Sustainable Energy, only about six percent of households receiving the subsidy earn more than $500,000 per year. An additional 34 percent of EV buyers who were granted the tax earn $200,000 or more, while 77 percent earning more than $100,000 per year.

Who Benefits?

While those numbers may give the impression that the credits will still find their way mostly into the pockets of the wealthy, the primary beneficiaries of the subsidies have always been the automakers, who are required by CARB mandates to sell a minimum number of electrics and plug-in hybrids—or face fines. Without the subsidies, CARB officials believe carmakers would have a more difficult time finding buyers. In other words, the credits are primarily targeted at making the EV market viable while automakers find ways to cut production costs, and thereby reduce purchase prices.

At face value, CARB’s rule change seems targeted at makers of relatively expensive EVs, such as Tesla, BMW and Mercedes. But the effect of the incentives on these buyers, and the broad market, is not entirely understood. The Tesla Model S, and upcoming Model X, commonly sell for around $100,000. Models from BMW, Audi and Mercedes—while not as highly priced as Tesla vehicles—are certainly in the luxury category, tens of thousands of dollars higher than the most affordable EVs on the market.

The federal tax credit remains open to all. The State of Washington is also considering limits to EV incentives, but instead is targeting the purchase price of the vehicle—by disallowing cars that cost more than $35,000.

California hopes that the cap will have the effect of quieting critics of CARB’s rebate, without significantly discouraging EV adoption. Several other incentives like single-occupancy access to carpool lanes and local parking perks in some towns and cities, would still benefit all buyers, regardless of income.

Last year, state Sen. Kevin de León, of Los Angeles, now the state Senate leader, had legislation signed into law by the governor that directs the state to put 1 million low- and zero-emission vehicles on California roads by 2023.

Of course, the other beneficiaries of the California tax credits are those who breathe air—namely, everybody. Pure electric cars—regardless of their price tags—have no tailpipes, and therefore emit no pollution.

Comments

· · 1 year ago

Sadly, the answer to this question is probably not, and definitely not any time soon. The reason EVs have an 'elite reputation' in the mind of the public is because perception is reality. Unfortunately, the forces who have so successfully marketed the elite perception have nothing in common with, or worse, are in opposition to the existence of EVs. The electric car manufacturers created the problem for themselves by unwittingly inviting attacks from the right through their own ignorance. Instead of trying to sell EVs as the fun, cheap to operate cars they are, car makers insisted EVs be marketed as 'green' and 'environmentally friendly'. Conservative talk radio and media outlets stole the carmakers' message and turned it into 'tree-hugging liberal hippies adopt new electric cars', or something similar. In the South, where I live, calling someone a liberal or progressive is akin to saying their mother was of low morals and possessed by an uncontrollable libido. Calling someone a hippie is to add a penchant for farm animals to the previous definition. I speak from experience when I say those of us who drive EVs in the south are reviled by ICE drivers.

Tesla was the first & only company to recognize and correct the error. Now Tesla is the darling of the mainstream media and seemingly gets more press than all other electric cars combined (which to some is proof evil must be involved). The name Tesla has become synonymous with electric cars in the public perception. What is the most expensive EV line? What does the average Tesla cost? Right . Therefore only the rich can afford electric cars is the reality the general public believes. Recently, politicians with the influence of big oil, have piled on the prevailing anti-EV sentiment and twisted the public message into us-vs-them. The argument goes something like, ' Those electric people aren't like us, they think they're better than everybody else', etc.

So, how do you get the misinformed public to see EVs as just another fun to drive, low maintenance car with a different propulsion system? Find a way to get them on the dealer lots so they can see what an average EV that's not a Tesla really costs compared to similar ICE cars. Then hold a gun to their head if you must and don't let them leave without a test drive. Last year's 'Drive Electric Day' converted a third of people who test drove EVs into owners. In the meantime, if government is going to offer any benefits to EV drivers, they need to be for everyone who drives electric, or not at all. Fair is fair.

· · 1 year ago

Believe it or not most people do not buy new cars. Therefore, buying a new vehicle is by default an elitist activity. The average price of a new car is about $32K. That is more than a leaf or a volt cost the consumer after the federal tax credits. Although, many people do not pay enough in federal taxes to vilify for the entire $7,500 credit. So, if you buy new cars you are an elite.

If you buy EVs now, keep trading up every three years, that will put the used ones on the market, and that will help the average people see the value of EVs. Anyway, when volume gets high enough and price is lowered more still, then they will begin to make inroads into the average consumers realm.

· · 1 year ago

Qualify, not vilify.

· · 1 year ago

@brotherkenny,

I agree. I am very fortunate that I am able to drive not one - but two plug-in vehicles, both "purchased" new. I would not have qualified for the tax credit, so I leased up front. Both Nissan and Ford took the credit and rolled it straight into the lease as if it were a down payment. And then I purchased/will purchase the car at lease end. In my case, both cars were cheaper to lease / buyout than to buy upfront because of the tax credit.

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· · 41 weeks ago

Yes i have read about this Model X super car from many superiorpapers.com blogs and got to know about it's amazing wonders and features. I too anticipated and also dreamed to own this car. It has really acquired high reputation.

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