When Might Lower-Income Drivers Benefit From Electric Vehicles? Quantifying the Economic Equity Implications of Electric Vehicle Adoption

Between 2025 and 2030, cost reductions in electric vehicles (EVs) will lead to lower prices for used EVs and cost parity with used internal combustion (IC) vehicles. High depreciation rates for owners of new EVs will benefit lower-income second owners. By 2029, EVs will reach price parity with IC vehicles. At present, once fuel and operating savings are accounted for, some households in all income groups could save by replacing at least one IC vehicle with an EV; this will increase to 45% of households by 2025, and 95% by 2030. Savings from EVs will be much higher for low-income households, non-White households, and households in areas with higher air pollution. By 2030, owners in the lowest-income range who switch to EVs will gain annual savings of $1,000 per household, or 7% of income. Despite improvements in EV affordability, action by policy makers will be needed to ensure equal access to EVs. Previous studies have shown that low-income EV buyers are more responsive to incentives, and that incentives for EV purchase are increasingly important. Regulations for phasing out IC vehicles can push manufacturers towards more diverse markets, and access to EV financing will be crucial for low-income households. Policymakers must also ensure deployment of home and public charging facilities to financially vulnerable communities and to renters who have less access to charging.

• Record URL:
  https://theicct.org/sites/default/files/publications/EV-equity-feb2021.pdf
• 
• Summary URL:
  https://theicct.org/publications/EV-equity-feb2021
• Corporate Authors:

  International Council on Clean Transportation (ICCT)

  1500 K Street NW, Suite 650
  Washington, DC  United States  20005
• Authors:
  • Bauer, Gordon
  • Hsu, Chih-Wei
  • Lutsey, Nic
• Publication Date: 2021-2

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; Maps; References; Tables;
• Pagination: 21p
• Serial:
  • Working Paper
  • Issue Number: 2021-06
  • Publisher: International Council on Clean Transportation (ICCT)

Subject/Index Terms

• TRT Terms: Automobile ownership; Electric vehicles; Equity (Finance); Forecasting; Low income groups; Prices; Purchasing
• Subject Areas: Finance; Highways; Planning and Forecasting; Vehicles and Equipment;

Filing Info

• Accession Number: 01772117
• Record Type: Publication
• Files: TRIS
• Created Date: May 21 2021 10:57AM