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California Subsidizes the Golden State’s Wealthiest and Most Trendy

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Keep It Grounded In Fact
(American Fuel & Petrochemical Manufacturers)

  

Only wealthiest and most trendy in California buy the already subsidize electric vehicle, but its the low to middle class footing the infrastructure bill.

Last week the California Public Utilities Commission unanimously approved over $768 million to build electric vehicle (EV) infrastructure and EV use and very kindly stuck ratepayers with the bill.

While news coverage, and the Commissioner, touted California’s leadership and vision, they failed to account for several realities.

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The first is that electric vehicles are still largely restricted to wealthier households. A recent EIA report found that 67% of EVs were purchased by households with $100,000 or more in annual income. This echoes numerous other studies that have found that EVs are disproportionately purchased by wealthy households and therefore subsidies, tax credits, and benefits disproportionately accrue to those same households, effectively penalizing the low and middle class families whose tax dollars go to provide these benefits.

The utilities’ plans ostensibly sought to address this inequality by “locating infrastructure in disadvantaged communities, in an effort to make charging accessible.” Which would be admirable, except that it ignores a critical fact: EVs are overwhelmingly purchased by wealthy households because various constraints, the primary one being high prices, make EVs unsuitable for many as a primary vehicle.

The likely outcome, therefore, are unused chargers sitting in neighborhoods of people for whom electric vehicles are either impractical or out of reach … but who are forced to pay higher utility bills all the same.

Similarly, the millions dedicated to increasing the number of EV charging stations are likely to make it more convenient for wealthy families to keep the Tesla charged, while making it harder for lower-income families to keep the lights on. As a recent study concluded, “EV subsidies also represent a wealth transfer from lower-income people to higher-income people and, therefore, could have negative consequences on overall income distribution.”

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And California doesn’t need any help in the income inequality arena. After all, it has a poverty rate of over 20%, the highest state poverty rate in the nation, according to the US Census Supplemental Poverty Index. (This Index, which includes the cost of housing, food, clothing, and utilities, is considered a more accurate measure than arbitrary poverty lines.)  That’s one out of five residents who are already struggling to make ends meet … without the upcoming increases to fund this infrastructure overhaul.

Sadly, the current financial burden is, by all accounts, only a drop in the bucket. As an EarthJustice attorney stated, “I think this money is going to go quickly, and I think we’re going to see the need for even more investment.” That jibes with a recent study from the Manhattan Institute, which found that California’s price tag for widespread EV adoption may well exceed $100 billion.

So while some wealthy Californians will be living “the EV dream,” low and middle income taxpayers will be left footing the bill.

Editor’s Note: Then, there is this from Industry Week:

Automaker Tesla is one of those companies that everybody loves to talk about because the company has tried to create its own rules in its quest to develop electric, semi-autonomous vehicles. There is a distinct aura of “cool” surrounding the Tesla brand, and with that aura has come an almost-fawning relationship between the popular press at Tesla’s founder, Elon Musk, who seems to delight in having the media follow his every word and his every tweet, no matter how outrageous. It’s certainly helped make Musk a rich man and Tesla a household name (although most households could never hope to afford one of their cars).

Once a company reaches a certain level of status in the marketplace, inevitably people will start analyzing the company to determine its corporate culture. Tesla, like other entrepreneur-led startups that make it big, has more than its share of arrogance, exuding a vibe that suggests its vehicles are so special and culturally significant to the zeitgeist that they don’t have to play by the same rules that other automakers have to play by. That kind of hubris might be excused if the topic is, say, access to government subsidies. It’s definitely not okay, however, if the topic is safety.

In March, the driver of a Tesla Model X was killed when the vehicle—which uses an autonomous driving feature called AutoPilot—crashed into a highway barrier. The promise of self-driving vehicles, of course, isn’t just the convenience but more importantly, the safety. Robot cars don’t fall asleep at the wheel, or text on their cellphones, or get blinded by the sun, or drive while intoxicated. But apparently, they also don’t always slow down when an accident is about to happen. Amazingly, Tesla’s response to the accident was to blame the driver. Their official statement claims, “the only way for this accident to have occurred is if [the driver] was not paying attention to the road.” How’s that for offering up a sacrificial lamb to the cause of technological progress?

…It wasn’t Tesla’s tone-deaf blame-game response that got the automaker in trouble with the National Transportation Safety Board, though—it was when the company broke protocol by releasing its conclusions about what caused the accident before the NTSB had the chance to vet and confirm the investigation results. That’s one of those big no-nos that really gets under regulators’ skin, and by jumping the gun, Tesla got its wrist slapped by the NTSB, which revoked the automaker’s party status, a “privilege” granted companies that allows for the sharing of investigative information during the early fact-finding phase of an investigation, with the understanding that early, inconclusive results are not disclosed…

So a company whose reputation was built on having cool cars that were the safest thing on the road is now having to defend itself against killer robot cars built in dangerous factories. The feel-good story of Tesla’s overnight success doesn’t really feel all that good anymore. Whenever safety takes a back seat to anything else—whether it be profits, productivity or time-to-market demands—nothing good will come of it. If ever there was a company in need of a safety culture intervention, that company is Tesla.

Subsidized and unsafe? Sounds like CNG vehicles area much better deal.

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