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Fox Business
Fox Business
25 Mar 2023

President Joe Biden's campaign for Americans to buy electric vehicles (EVs) rather than fuel-powered cars continues to run up against the barrier of the average person's wallet — a reality highlighted by a new report out of California.

EVs in the Golden State are overwhelmingly concentrated in affluent communities dominated by white and Asian, college-educated, and high-income residents, according to CalMatters, which conducted a statewide analysis of ZIP codes based on California Energy Commission data.

Atherton, for example, is a small community in San Mateo County, Calif., that boasts not only California's highest percentage of electric cars — one out of every seven, or 14 — but also an average home value of nearly $7.5 million and average household income exceeding half a million dollars. The fact that Atherton is both wealthy and full of EVs isn't a coincidence, according to the data.

Most of the biggest EV clumps were found to be concentrated in Silicon Valley cities and affluent coastal areas of Los Angeles and Orange counties, the central hubs of tech titans and Hollywood giants.

President Joe Biden in an electric vehicle, left, and California Gov. Gavin Newsom

President Joe Biden in an electric vehicle, left, and California Gov. Gavin Newsom (AP Photo/Evan Vucci // Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images)

Overall, according to CalMatters' analysis, most of the median household incomes in the top 10 communities for EV ownership exceed $200,000, much higher than the statewide $84,097, and typical home values exceed $3 million. Plus, at least three-quarters of residents have a bachelor’s degree or higher.

California's highest concentrations of electric cars — between 10.9% and 14.2% of all vehicles — are also in areas where residents are at least 75% White and Asian.

While more EVs are found in wealthier places home to mainly Whites and Asians, the inverse is also true: EVs are almost non-existent in low-income California communities, especially with high populations of Black and Latino residents, ranging from zero to 2.6%.

The demographic disparities are particularly striking given California's concerted efforts to push EVs. Under a state mandate enacted last year, 35% of cars sold in California must be zero-emissions beginning with 2026 models. The figure skyrockets to 68% of cars sold in 2030 and 100% in 2035.

"As more electric vehicles are on the road, we're going to need to be creative about policy solutions to address those issues to make sure that the benefits of owning an electric vehicle are shared across the demographics in the state of California and beyond," Kevin Fingerman, an associate professor of energy and climate at California State Polytechnic University Humboldt, told CalMatters.

President Biden at the Detroit Auto Show

President Joe Biden tours the Detroit Auto Show, Wednesday, Sept. 14, 2022, in Detroit.  ((AP Photo/Evan Vucci) / AP Newsroom)

Beyond California, the question of cost has been a major problem for EV proponents. As of last month, the average cost of a new EV was $58,385, down from about $65,000 last year but still about $14,000 more than the average price paid for a non-luxury vehicle. Lower-end EVs start around $27,500.

Other issues for EVs include high upfront vehicle costs and a lack of chargers and sufficient access to public charging stations in low-income and rural communities.

Still, at the federal level, Biden is pushing EVs as a central answer to combating climate change and transitioning away from fossil fuels, which currently power most vehicles with either gas or diesel fuel.

Biden has said his goal is for half of all new vehicles sold in the U.S. to be electric by 2030 on the way to a net-zero emissions economy by no later than 2050. To make this happen, the Biden administration has invested tens of billions of dollars into various EV projects, bolstering billions more going to EVs through Democrat-backed legislation such as the Inflation Reduction Act, which also includes a tax credit incentive of up to $7,500 for buyers of EVs.

However, EVs still remain more expensive — and not just because of the retail price. According to Anderson Economic Group, fuel costs for traditional internal combustion engine vehicles were cheaper in the last quarter of 2022 than EVs.