No Rich White Guy Left Behind: The Selling of Electric Cars as Zero Emission Vehicles

Electric cars and their $1600 cost per ton for CO2 reduction. And, yep, you’re paying for it. 

Electric cars have environmental benefits, no doubt about it, and anyone who drives one is making a contribution to a cleaner world. That’s the good news.

But, “Zero emission vehicle”? Wrong, unless you agree with the guy who just burped 12 times in your face that because it didn’t come out of his tailpipe, he doesn’t have gas.

The bad news? We can do better. According to the DOE’s recent Quadrennial Technical Review, the average “well-to-wheel” emissions for electric plug-in hybrids and all-electrics, which check in at around 80 percent compared to baseline E10 gasoline, are higher than simply using corn ethanol E85 or renewable diesel.

The worse news? Electrics are generally purchased by rich white guys, who get big tax breaks, at the expense of the poor and Latinos, who tend to favor renewable fuels over electrics when it comes to reducing carbon.

We should’t be entirely surprised. As Salon.com observed this summer:

“Gilens’ dataset demonstrates convincingly that the preferences of women, people of color and those falling into low- and middle-income brackets have almost no effect on policy. It directly asks: Do the people get what they want? The answer is: Yes, if they’re rich white men.

“As male support increases from 0 percent to 100 percent, the odds of policy enactment rise from about 0 percent to about 90 percent. But as female support varies over the same range, the likelihood of adoption falls from roughly 80 percent to roughly 10 percent. When men and women disagree, then, stronger female backing for a policy seems entirely futile.”

Let’s look at the hard data:

Rich

Average household income of the California-based electric car owner: $150,000
Average household income in California: $61,320
Starting price of a Tesla Model S: $69,000
Percentage of Tesla Model S buyers with incomes over $200,000: 34
Rank of Tesla among electric cars, by sales: 1

White

Percentage of Californians who are white: 39
Percentage of electric car owners who are: 73

Guys

Percentage of Tesla Model S Owners who are male: 83

Tax breaks

Maximum tax credit for buying an electric car in California: $10,500

Over on the renewable fuel side

Now, let’s look at the corresponding data for users of renewable fuels such as E85 or renewable diesel:

Poorer

Average household income of the California-based E85 customer : $39,000
Average household income in California: $61,320

Less White

Percentage of Californians who are White: 39
Percentage of E85 customers who are: 54
Percentage of E85 customers in a 2014 Propel Fuels San Joaquin Valley/Inland Empire survey who are: 34

Tax breaks

Maximum tax credit for buying a flex-fuel car in California: $0

A regressive tax on poor people?

Do tax breaks for electric cars benefit the environment? Yes they do. Are they a tax windfall — in that they offer a reward for reducing carbon that can be achieved without a tax break? Yes they are.

In the sense that they confer added financial benefits without added environmental benefits on rich white guys, are they a regressive tax on poor people and Latinos? That’s certainly one way to look at it.

Some good news? California has a proposal to end tax breaks for rich white guys when they buy electric vehicles. Why not break out the bubbly just yet? It impacts about 30% of the overall credit, so poor people will still be subsidizing the rich.

And for the environment, it would be better if the Silicon Valley guys switched to E85 or renewable diesel, and we just sent them each a $7500 check. Cheaper to administer, too.

Did tax breaks for the rich drive the electrics market as expected?

Not exactly. As Greenlining.org observed in 2011: “most [EVs] will likely be purchased by affluent buyers who are already driving relatively clean vehicles. Statewide sales are projected to be in the 200,000-300,000 range by 2015.”

200,000-300,000 EVs in California? Did sales reach those levels? That would be a “no”, National US sales of EVs are 118,000 this year, through September, not quite half of those in California.

Are rich white guys simply more concerned about in the environment than poor people, and thereby more deserving of our support?

‘Fraid not. In California Greenline.org reports that 85% of Latinos worry about air pollution — compared to 61% of whites.

Who’s carrying the load for emissions reductions, poor people or rich white guys?

Here’s our math. We’ve taken out consideration of how a mandate to use a fuel might raise prices for all motorists, since a) it doesn’t affect a comparison of two renewable pathways and b) it’s not inevitably the case that fuel mandates raise prices.

Percentage of miles traveled “all-electric” in EVs: 54%
Increase in of miles that EV owners travel, vs other cars: 7%
Emissions reduction for “all electric” mode: 20%
Net average emissions reduction per vehicle: 10%
Net reduction of CO2 emissions: 417 kilos
Cost of the tax credit: $7500-$10,500
Taxpayer cost per ton of CO2 reduction over 15-year life of vehicle: $1192-1676

Net average emissions reduction, per E85 vehicle: 20%
Net reduction of CO2 emissions: 834 kilos
Taxpayer cost per ton of CO2 reduction over 15-year life of vehicle: $0

The Bottom Line

It’s not a case of electrics=bad, renewable fuels=good. It’s a case of electrics=good, renewable fuels=better. There’s room for both technologies, but society might benefit from a sober review of the costs and benefits of electric car tax credits.

For now, poor people carry the can for low carbon society in two ways, it appears. First, they patronize high-blend renewable fuels, which are better on emissions, overall, than electrics at this time. Second, they tend to subsidize the tax credits given to rich white guys to buy electrics.

Note: Data sources for the above are: the California Air Resources Board, Greenline.org, Propel Fuels, the state and federal tax schedules, and Green Car Reports.