In Colorado, electric cars are mostly for rich people. Could federal and state policy change that?

Sam Brasch/CPR News
Shere Walker picks up her daughter from an after school program at the Jefferson County Boys and Girls Club. To save money on a long commute, Walker is now considering an electric car.

The sun was setting when Shere Walker drove her 2014 Nissan hatchback to pick up her daughter from an after-school program in Jefferson County. 

The stop was her final destination before a crosstown trip to their home in Aurora. In total, Walker, a school administrator and community activist with the Black Parents United Foundation, logs between 60 to 70 miles a day in the red subcompact. Despite her car's higher-than-average fuel economy, she estimates all her driving costs about $400 per month at the gas pump. 

Walker is eager to replace her "little boop-boop" with an electric car, a switch she knows could help her save money and cut her contribution to global warming. While she's aware of the benefits, she's less clear on some practical points. 

"I've done some research. I've noticed some [electric cars] get up to like $110,000," she said. "Also, where do you charge these vehicles? Is it in your home?" 

Walker isn't alone in her concerns. Consumer surveys have found the high cost of new electric cars and charging access are the biggest roadblocks for most potential consumers. 

These are smaller barriers for wealthier people, who have driven early electric car sales. In California, the largest and best-researched market for plug-in vehicles, a 2019 study found electric vehicle buyers have an annual median household income of $190,000. Seventy-five percent are male. 81 percent own their own home, which often makes it easier to charge an electric vehicle overnight.

State-level tax data reveal similar disparities in Colorado. From 2017 to 2020, more than 12,000 households received a state tax credit to purchase a plug-in electric vehicle. More than 80 percent of those households reported an annual income of more than $100,000 a year.

LaSheita Sayer, a Black businesswoman and electric car advocate from Denver, worries those statistics hint at one way electric vehicles could drive inequality. If only wealthy people can afford the vehicles, they alone enjoy benefits like cheaper transportation and lower maintenance costs.

"And they don't need them nearly as much as the person struggling, week-to-week, to put food on the table," she said.

Bringing down the sticker price

At the federal level, Democrats have made reducing the price of electric vehicles a key piece of their plans to combat climate change. Those vehicles are still mostly aimed at a luxury market. A recent policy review found between 2012 and 2020, the average starting price for a battery-electric vehicle rose from about $42,000 to about $62,000.

The Build Back Better Act, President Biden's climate and social welfare bill, includes tax credits meant to make the vehicles far more accessible. The $1.9 trillion version approved by the U.S. House includes incentives worth up to $12,500 for middle-class car buyers. It'd also make the tax credits "refundable," so electric vehicle buyers could claim the total value of the incentive even if they owe less in federal taxes.

The current federal electric vehicle incentive is a $7,500 “non-refundable” tax credit. To qualify for the full incentive currently on the books, a single filer needs to earn more than $66,000 a year — a design that favors the wealthy

If the bill passes, certain electric cars, like the Chevy Bolt EV — one of the most popular electric vehicle models across Colorado —could see deep price cuts across the state. The car would qualify for the full potential incentive since it's manufactured by a unionized U.S. company. Income-qualifying customers of Xcel Energy, the state's largest power company, can qualify for an additional $5,500 through its electric vehicle rebates.

The final price after all those discounts? About $14,000 before fees and taxes.

Democratic U.S. Rep. Joe Neguse said those savings could help drive down climate-warming emissions on a recent trip to his Boulder district. Many studies have found electric cars will help limit the worst consequences of climate change, especially if the U.S. continues to replace fossil fuels with renewable energy. 

"That's a big reason why we've been working to convince some of our Senate Democratic colleagues that those provisions have to remain intact," he said. 

Efforts to boost the federal electric vehicle incentives hit a speed bump earlier this month when Sen. Joe Manchin, a conservative-leaning Democrat from West Virginia, rejected the bill outright on Fox News. It's now unclear if the legislation has any chance in an evenly divided Senate.

Colorado isn't slowing down

Will Toor, director of the Colorado Energy Office, said he was disappointed by Manchin’s opposition to the Build Back Better Act. 

To meet state climate targets, Gov. Jared Polis set a goal for 100 percent electric light-duty cars and trucks on Colorado roads by 2050. The administration has an interim goal of 940,000 electric vehicles by 2030, a big jump from the 47,000 currently registered in the state, according to the Department of Motor Vehicles. Toor said the Build Back Better Act would provide a "significant boost" toward those targets, but he doesn't see it as essential.

RELATED: Polis’ 2022-2023 budget plan includes money to make public transit free during Colorado’s ozone season

"We have a lot intact at the state level that will allow us to continue to move forward regardless," Toor said.

One example is Xcel Energy's $110 million electric transportation plan, which state utility regulators approved earlier this year. The company now offers $5,500 in upfront rebates for new electric vehicles and $3,000 for used models, so long as the price tag isn't more than $50,000. To access the rebate, Xcel customers must make 60 percent of the state's median income or meet other income qualifications. 

Nadia El Mallakh, a vice president of strategic partnerships, said there's been a steady interest in the program since it launched last summer. As of Dec. 10, Xcel has approved 38 customers and 17 applications are pending.

The Xcel Energy rebates come as the value of Colorado’s electric vehicle tax incentive has shrunk. The original $5,000 tax credit was one of the county’s most generous when it went into effect in 2017. Two years later, the state legislature extended it through 2025 with a plan to step down the rebates. It’s worth now $2,500 through the end of 2022 and $2,000 from 2023 through 2025. 

Unlike other state incentives, the Colorado rebate does not exclude high-income households or 

luxury car models, but the legislature has separate efforts to expand electric car access. 

Earlier this year, Gov. Polis signed a $5 billion transportation package, including a new "community access enterprise" funded with fees on retail deliveries from companies like FedEx and Amazon. State analysts estimate it should take in about $20 million over the coming fiscal year. 

Maria Eiseman, a transportation policy analyst with the Colorado Energy Office, is leading an "EV equity study" to guide the program based on community input. One question under consideration is where and how to build chargers. 

"We're getting into the harder and harder problems about making charging accessible for everybody who will be driving an electric vehicle," Eiseman said.

Charging ahead

For LaSheita Sayer, the decision to buy an electric car for her marketing firm, ZoZo Group, quickly showed her the inequities of the public charging network. 

Most privately owned charging stations were tucked away in garages or single-family homes. Far fewer were located near apartments or rental properties. When it came to public chargers, many were in dark parking lots off of highways. 

RELATED: Right now, the federal government blocks Colorado from adding EV chargers to rest areas. But that may change soon

The experience led her to found Women Who Charge, a nonprofit that helps women and people of color switch to electric vehicles. She sees particular promise in the city’s plans to add additional street-side hookups, like a set of existing chargers in Five Points, a historically Black neighborhood in Denver.

Sayer is now pushing business districts to build similar chargers into Denver street lamps. Besides offering well-lit charging stations to people without a dedicated parking spot, she said the hookups could double as billboards, letting less-advantaged communities know they have a role in combating climate change. 

"We're just as interested in contributing positively to the reduction of greenhouse gases as people that make more money It's just harder for this group of folks to get access to the same car," Sayer said.

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