Suggested Citation:
Muehlegger, Erich and David Rapson (2017) Policy Brief: Price Discrimination and Market Access Are Not Barriers to Electric Vehicle Adoption by Low-Income Households. Institute of Transportation Studies, University of California, Davis, Brief UCD-ITS-RR-17-65

Policymakers consider alternative fuel vehicles an important element of reducing urban air pollution, lowering carbon emissions and reducing overall petroleum consumption. Federal, state and local governments offer incentives to encourage consumer adoption of these vehicles. But adoption of these vehicles by African-American, Hispanic and low-income consumers has lagged behind the adoption by Asian, White and high-income consumers (see Figures 1 and 2)*. As a result, incentives have tended to accrue disproportionately towards high-income households.

Understanding the low-rate of adoption for certain demographic groups is of particular interest to California – SB350 requires the California Air Resources Board to study barriers to zero-emission transportation options faced by low-income consumers. The Clean Vehicle Rebate Program (CVRP) and Enhanced Fleet Modernization Program (EMFP) target these groups by offering more lucrative tax incentives to low income consumers or consumers who live in disadvantaged communities.

Key words: incentives, alternative fuels