California’s Low-Income Earners Struggle to Access EV Grant Programs

With the effects of runaway climate change becoming all too apparent with each passing year, different jurisdictions are taking steps to encourage the transition to electric vehicles so that pollution from the transportation sector can be reduced. California is one such jurisdiction that has set an ambitious 2035 target for ending sales of fossil-fuel vehicles. However, the average cost of an EV in the United States is approximately $66,000, and this figure is out of reach for nearly all low-income earners.

To help this section of the state’s population to access financial help in acquiring electric vehicles, California has established a number of grant programs targeting the most vulnerable of its population.

For example, Valley Clean Air Now (Valley CAN) is a not-for-profit entity charged with managing the state-funded Clean Cars 4 All (CC4A) EV program within the San Joaquin Valley. Under this program, residents who turn in conventional vehicles whose date of manufacture is 2005 or older qualify for a maximum of $9,500 to help in buying a new or used electric vehicle.

However, this grant program closed months ago because it had depleted the resources allocated to it. Valley CAN officials are frustrated by the closure because they had 1,500 completed applications awaiting the disbursement of funds, and they now have an additional 1,500 applications for assistance being processed. Several other state-sponsored assistance programs targeting the most-in-need people in the state have also closed shop due to lack of funding.

This is frustrating because statistics show that low-income earners are the most affected by climate change. For example, the households in the bottom quintile in terms of income spent 26.9% of their annual income on transportation. This is according to figures released by the Bureau of Transportation Statistics. The national average on transportation in 2021 was 13.9%, so poorer people spend nearly twice what others spend on transportation.

Additionally, poorer people tend to drive older cars, and these are prone to breaking down frequently while also being less fuel efficient. Many admit to receiving warning letters or even being dismissed from work for being late after their vehicles broke down.

These challenges make it all the more critical that help is extended to these vulnerable people so that they can acquire electric vehicles and reduce their expenditure on transportation at this time when inflation is eroding people’s ability to spend on various needs. Matters aren’t being helped by high gas prices, which have led to skyrocketing demand for EVs, and yet supply chain issues have kept electric vehicle production low.

The onus is now on the California state government and other state governments across the country to find ways to help low-income earners make the transition to electric vehicles as manufacturers such as Rivian Automotive Inc. (NASDAQ: RIVN) sort out the supply-side impediments shackling vehicle manufacturing.

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