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Berkeley study finds clean vehicle rebates have predominantly benefited wealthy, white Californians

The distribution of California’s clean vehicle rebates across different socioeconomic groups has been uneven, with higher income groups more likely to receive rebates, according to a new study by a team from the University of California, Berkeley. The analysis, published in the journal Transportation Research Record further suggests that census tracts where the majority of the population is Hispanic or African-American are less likely to receive rebates, even when income is accounted for.

Researchers Dana Rubin and Evelyne St-Louis, two recent graduates of the University of California, Berkeley’s master’s program in city and regional planning, analyzed 98,901 rebates issued to Californians buying or leasing low-emission vehicles from the inception of the Clean Vehicle Rebate Project in 2010 through March 2015.

They used ordinary least squares (OLS) and negative binomial regressions to identify the definitive effect that income played in obtaining rebates.

Rubin and St-Louis say that considering the high costs of fuel-efficient electric, plug-in hybrid electric, and fuel cell vehicles, whose sticker prices start at around $20,000, it was not surprising to find that 83% of rebate recipients in the period studied reported yearly incomes of more than $100,000.

While a state law passed in 2014 requires that 10% of CVRP funds be allocated to disadvantaged communities, Rubin and St-Louis found that residents of neighborhoods with a majority Hispanic or African American population are less likely to have applied for, and therefore be benefiting from, clean vehicle rebates, even when income is held constant.

Regarding race and ethnicity, the model indicates that a tract that has 10% more Hispanics receives 0.54 fewer rebates per 1,000 households (b = −0.0544, p = .000). Similarly, a tract that has 10% more African- Americans receives 0.48 fewer rebates (b = −0.0484; p = .000). This is noteworthy and indicates that the distribution of rebates is potentially problematic not only across incomes but also across race and ethnicity. Furthermore, race and ethnicity were significant when the OLS model was run without income, and continued to remain significant afterwards when the variable was added. Thus, the inclusion of income, rather than muting the relationship between Hispanics and African-Americans and rebates, demonstrates that there remains a significant and substantive relationship between race–ethnicity and the allocation of rebates.

—Rubin and St-Louis (2016)

There may be other reasons why communities of color aren’t receiving and benefiting from clean vehicle rebates, say Rubin and St-Louis.

Nonparticipation by low-income people and people of color shows us that barriers prevent these groups from accessing CVRP subsidies. We can surmise that this is partially attributed to the auto industry targeting wealthier areas with marketing campaigns, and also because information and guidance about electric vehicles and subsidy programs is not distributed evenly across all populations.

—Evelyne St-Louis

As of 1 November 2016, CVRP began instituting changes in its income requirements and rebate levels. Rebates for all types of eligible light-duty passenger vehicles increased by $500 for a total of $2,000 more for each rebate, for a range of $3,500 to $7,000. To qualify for the increased rebates, applicants must have household incomes not more than 300 percent of the federal poverty level.

Residents will not be eligible for rebates if their gross annual income exceeds $150,000 for single tax filers, $204,000 for head of household filers and $300,000 for joint filers. However, the limits do not apply to fuel cell electric vehicles, which represent less than 1% of rebate applications.

St-Louis and Rubin say the adjustments are a first step to rectify the program’s imbalance in terms of income, race and ethnicity.

In the long term, it will be important to reassess the trade-off of clean-vehicles—and by default, vehicle ownership—over other cleaner forms of transportation (e.g., public transportation or car- sharing). There has been a recent initiative in California to implement pilot projects for carsharing programs, specifically in disadvantaged communities. Carsharing programs have the potential to reduce localized pollution and can be an inexpensive transportation alternative. Placing more carsharing programs in low-income communities, where GHG emissions are notoriously higher, could be an effective alternative to promoting ownership of clean vehicles.

Notwithstanding the debate of whether vehicles should be promoted over other alternative transportation options, it is important that governments sponsor transportation systems that are affordable and accessible across socioeconomic lines. All programs need to be evaluated not only on the basis of their economic value but also on the basis of equity.

—Rubin and St-Louis (2016)

Resources

  • Dana Rubin and Evelyne St-Louis (2016) “Evaluating the Economic and Social Implications of Participation in Clean Vehicle Rebate Programs Who’s In, Who’s Out?” Transportation Research Record: Journal of the Transportation Research Board 2598: 67-74 doi: 10.3141/2598-08

Comments

mahonj

What did they expect?
EVs are expensive and poor people can't afford expensive things.
The best they could do would be to make it possible to buy used Nissan Leafs.

DaveD

You mean....that most people who buy $100,000+ cars and/or can afford to have multiple cars in their household.... are rich and white??? OH MY GOD, what a revelation!

And somebody took the time to write this brilliant insight down? I sure as hell hope they didn't waste any gov't money on this study. It's bad enough they wasted their time.

Herman

But the best part is this:

"We can surmise that this is partially attributed to the auto industry targeting wealthier areas with marketing campaigns, and also because information and guidance about electric vehicles and subsidy programs is not distributed evenly across all populations."

Of course. White people are holding back EV info from non-whites.

ChrisL

The Federal EV incentive is in the form of a tax-credit, rather than a point-of-sale rebate. For retired people (like myself) who have low incomes but ample savings, the tax-credit is not available. I can afford to buy any EV, but still do not qualify for the Federal incentive. Please do not stereotype; it's not becoming. But likely the drafters of the incentive rules held the same biases. The program is discriminatory.

SJC

You write the laws better you can get more equitable outcomes.

Calgarygary

I'd speculate that the wealthy whites would be even wealthier today had they not bought the EV's. Going forward it may be a different story as EV's get closer to the parity line.

Lad

If you want to make it fair, make it a rebate like California does. The idea of making it a tax offset sounds like it came from Republicans.

HarveyD

Laws, regulations and subsidies are rarely equitable because they are designed to help/favor groups or technologies.

However, electrified vehicles subsidies could be re-designed to be fairer to more potential buyers by varying the total amount inversely proportional to the buyers' income. Those subsidies could vary from 0% for buyers above $200K to as much as 50+% for very low income buyers. The same could be done with the purchase/sale taxes.

A $40,000 TESLA III could become a good $20,000 EV for millions. Many would scrap their oil burning ICEVs thus reducing GHGs and pillution quicker.

SJC

Laws are designed to address inequities.
Economic justice must prevail or we fail.

ai_vin

In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread. - Anatole France, circa 1894

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