For some, electric vehicle cost remains barrier to purchase

SAN DIEGO – Robert Teglia bought a Tesla Model 3 sedan even though he knew it cost more than many luxury cars. He didn’t care that it could be better for the environment than the others.

Teglia, a commercial real estate appraiser in San Diego, calculated the cost of a gasoline vehicle and a Tesla and realized that even if he spent more money on buying a battery-powered car, he would save money on gasoline and maintenance.

“I’m a Tesla buyer who didn’t buy it for altruistic reasons,” said Teglia. “I bought it just because I think it’s great.” His wife Dianne bought one too.

Your decision illustrates the challenge President Joe Biden and automakers face in pushing Americans to go electric to fight climate change. These cars cost much more than gasoline vehicles, which thousands of people who want to buy an electric vehicle – for whatever reason – may refuse to actually buy one.

On the high end, a Tesla Model S starts at more than $ 80,000, and on the low end, a Chevrolet Bolt starts at $ 31,000 – nearly $ 10,000 more than a larger gasoline-powered sedan like the Chevy Malibu.

A federal tax credit can reduce sticker price by up to $ 7,500, but no longer applies to Tesla and General Motors models. Additionally, some Americans don’t owe enough income taxes to draw on the loan, and others fail to pay thousands of dollars in anticipation of a refund the following year.

As a result, many Americans can’t buy an electric vehicle, let alone two like the Teglias, because they can’t make the huge investments it takes to get the savings the cars can make on fuel and repairs.

Biden said earlier this month that he wanted half of the new cars sold in the country to be battery-powered by the end of the decade. But that ambitious goal could be difficult to achieve. Less than 4% of new cars sold in the US in June were electric, a far lower proportion than in China and Europe, which offer more generous incentives and have stricter car regulations.

The Biden government wants to invest billions of dollars in building charging stations and reducing the cost of vehicles. But the Senate bipartisan infrastructure bill would only approve $ 7.5 billion for chargers, half of Biden’s original proposal, and it doesn’t add to the incentives for electronic device purchases.

Automakers have pledged to support the transition with dozens of new models. GM announced in January that it would end production of gasoline cars by 2035. Ford Motor, Volkswagen and others are also aggressively pushing for electrics.

To achieve these aggressive goals, Biden and the automakers will need to achieve something more elusive: driver consent.

COMMON AREAS

Consider Carmel Valley, Robert Teglia’s affluent neighborhood in San Diego. Vehicle registration data compiled by Drive Dominion, a research firm, found that zip code 92130, which covers most of the neighborhood, has more Teslas registered than any but two others in California, Palo Alto and Orange Counties. In the neighborhood, banks of electric vehicle chargers have sprung up like mushrooms, including 18 Tesla Superchargers on a parking garage in a mall, One Paseo.

The Times surveyed more than a dozen electric vehicle owners in this part of San Diego, and few identified environmental considerations as the main motivating factor for buying. Many were attracted by technological innovations or won over by friends and family members.

The people here aren’t Hollywood stars or billionaire tech entrepreneurs who may own Ferraris and private jets. But they are wealthy. The median household income in the area exceeds $ 165,000, and half of the homes are worth more than $ 1 million. Eight out of ten residents have at least a bachelor’s degree. As an early buyer with a high income, you can easily take advantage of the federal e-car tax allowance.

The incentives “subsidize my luxury,” said Teglia, who also has solar panels in his home. The Model 3s he owns sell for about $ 40,000 before government incentives are granted.

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. “I found her elegant and sexy,” said Borseth, who now heads the Electric Vehicle Association of San Diego.

“It’s almost one of those cases where the more you see it just grows on its own,” she said, explaining why there are so many electric cars in her neighborhood.

Research confirms their intuition. Word-of-mouth advertising plays a huge role in car purchase decisions. A 2017 study commissioned by the California Air Resources Board, a state agency, found that neighborhoods that adopted electric vehicles early continue to buy them at higher prices, suggesting that both socioeconomic status and exposure to the vehicles also play a role.

“It’s not about the Super Bowl ads, it’s about listening to others, and that’s why it takes time,” said Gil Tal, director of the Plug-In Hybrid & Electric Vehicle Research Center at the University of California, Davis.

The places that are most advanced in moving to electric vehicles tend to share three characteristics, he said: They have high-income individuals, lots of single-family homes, and early adopters introducing the idea of ​​electric propulsion to others. People rarely give just one reason for buying electrical appliances, Tal said. They argue that electric vehicles are fun, quick, easy and, as an added bonus, good for the environment.

“We never find someone who says, ‘I don’t care about the environment, it’s all about 0 to 60’ or someone who says, ‘It’s just about saving that $ 20 a week,'” he said. “It’s the bundle that works for people.”

AFFORDABLE AID

Interest in electric vehicles is growing, but concerns about the range of cars for a fee and the availability of public charging stations are preventing many Americans from taking the plunge. And then there is the cost.

While many electric and hybrid vehicles are eligible for the $ 7,500 federal tax credit, the value of the credit varies by make and model, which can be confusing. Unifying the incentive and turning it into a discount that lowers the purchase price – an approach that states like New York and New Jersey are taking with their incentives – would do more to encourage consumer electronics purchases, policy experts said.

“There are many reasons why a direct consumer discount, or ‘cash on the hood’, is a really important incentive,” said Ben Prochazka, executive director of the Electrification Coalition, a Washington nonprofit group advocating greater use of electric vehicles. “It’s clear, very clear to everyone, the buyer and the person selling.”

Scott Eng and his wife, who live just a few miles south of zip code 92130, thought about an electric vehicle when they bought a car this year. Even so, they ultimately couldn’t justify the cost of buying a new car, said Eng, the pastor of an interdenominational church. Because there were few used electric vehicles to choose from and there wasn’t an easy way to measure the condition of a car’s battery, they bought a used hybrid Chevy Volt that would match what they already have.

“The volts are working for us at the moment, but ideally we want to be fully electric,” he said.

Automakers and their suppliers have steadily reduced battery costs, which is the main reason electric vehicles are expensive. But it will probably be several years or more before vehicles achieve parity with gasoline vehicles.

Electricity providers are also trying to encourage the use of electrical energy, which increases electricity demand, by installing public charging stations. According to San Diego Gas & Electric, a third of its chargers are in disadvantaged communities. The utility is also testing whether electric vehicles can send electricity back into the grid when needed.

“You just have to do it,” said Caroline Winn, the company’s managing director, of people switching to electric cars. “But you also have to educate.”