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  • California—A Model for EV Adoption | VinFast

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    12/10/2022 at 10:02

    California—A Model for EV Adoption

    Electric vehicle (EV) adoption has been slower in the US than in other “rich” nations. Don’t get me wrong—it has been growing, and at an increasing rate. Nevertheless, Pew Research notes that, while the US accounts for about 17% of the world’s stock of 10.2 million EVs, EVs only comprise about a 2% market share in the US In other words, EVs only make up about 2% of the new vehicles sold in the US.

    There are barriers to EV adoption in the US. Some are practical, rooted mostly in the difficult terrain and broad geography of the US; some are rooted in culture or unfair subsidies given to fossil fuel companies; and some are changeable aspects that could be tackled by wise legislation and innovation. It’s this last group that we’ll be discussing, today.

    See, the US already has a perfect model for how to increase EV adoption nationwide: California. Despite having 12% of the US population, California has 25% of the country’s zero-emission EVs. In fact, in the first quarter of 2021, the market share of EVs in California hit 9%, placing it among the top 15 nations for EV adoption. This growth of EV adoption seems to be accelerating, despite the economic downturn caused by the pandemic.

    So, the question is… why? Why is California rocketing ahead of the rest of the country in EV adoption? The answer is mostly in the laws and incentive programs that California has instituted statewide. By taking a closer look at these programs, we can begin to create a model for other states that could help increase EV ownership nationwide.

    But before we tackle that, let’s take a closer look at California, itself.

    The Model State: California

    In many ways, California is a fantastic representative of the US as a whole. Especially when we’re talking about the practical realities of adopting EVs on a wide scale.

    For starters, one of the major worries about EVs is their range and the availability of charging stations. While topographically smaller nations in Europe can get by installing fewer charging stations, spread-out countries like the US will require a higher investment, just due to the necessity of putting more charging stations across its vast terrain. After all, there is a minimum charging-station density you need to make EVs viable in any given region. Those cars aren’t much use if the nearest station is more than a full charge away!

    California provides a great test case for this because it’s the third-largest state in the country. What’s more, once you take travel time and terrain into account, as well as the “dead zones” in the two states with more area than California—places where no one goes, but that still count towards the state’s area—it may well rank higher. Most of California is traversed in some way, and much of it is mountainous enough to spike travel times above what the bare mileage would make you think.

    On top of this, the terrain of California is varied enough to provide a test case for the viability of EVs in different terrains. There are hot deserts, snowy mountains, temperate coastal regions, and dense forests. There are even dense cities and small townships. Few eco-types can’t be found in California.

    As far as public perception goes, California also provides a solid model. It is politically divided between several regions that run the gamut of the political and economic spectrum, from the red Central Valley to the blue Bay Area, from big cities to insular mountain townships.

    So, California is a region that serves as a good example for some of the most difficult problems facing the US in regard to EV adoption. Let’s look at how the state has handled the barrier to EV adoption, so far, and counter some common misconceptions.

    How California Topped the List

    If you were to take California’s EV market share of 9%, it would place 13th on the list of most EV-friendly nations in the world, right between Ireland and Austria. So, what is it that brought California’s EV purchase rates up so high, despite the practical challenges of doing so?

    Let’s knock down two explanations commonly thrown around when people discuss the adoption of forward-thinking policies in California—political leaning and wealth.

    The first is easy to dismiss. As it turns out, EVs are popular across the political spectrum. While EV popularity and adoption is slightly lower among Republicans, California's adoption rate is much higher than both Republican leaning and Democratic leaning states, making the ideological disparity negligible.

    The idea that California is more wealthy does hold some weight. On a statistical level, it is true—California has more millionaires and billionaires than any other state and a higher average net worth. The thing is that the presence of so many rich individuals skews the statistics. And that wealth certainly isn’t spread around. When you combine the lower adjusted net worth with the high cost of living in much of California, you’ll find that the difference in disposable income likely doesn’t count for the disparity in EV ownership either. In fact, disposable income in California sits right in the middle of nationwide rates.

    So, if it’s not individual political leanings or wealth that led to the growth of EVs in California… What did?

    Well, by and large, it looks to be the incentives and rebates offered by California.

    There are a lot of them. It would be impossible to list each one. But, take a quick search here, and you’ll find more than you can handle. In large part, two specific types of programs seem to have had the most effect: incentives and rebates for individuals buying EVs, and incentives and rebates for those installing charging stations.

    Individual Buyer Incentives

    The first of these is easy to understand. One of the biggest obstacles to buying EVs is the price. Not just the fact that they’re often more expensive than combustion engines (though this is quickly changing), but the fact that it’s hard to find them used. A single rebate offered in California—the Clean Vehicle Rebate Project—offers $4,500 for high-income Californians, and up to $7,000 for low-and-moderate-income residents. The source listed above credits that one program with getting up to 350,000 EVs on the road. And that program isn’t the only one. There are a bevy of local programs that knock dollars off the price tag of the initial purchase down, as well as ones like CARE and FERA, which give you a discount of up to 30% on your electric bill to help with charging.

    Depending upon where you live, as long as it is within California, it’s very possible to wind up with a five-figure discount on an EV. The benefit of this kind of program is obvious and, sure enough, you can see purchase numbers spike right around 2010, when the Clean Vehicle Rebate Project was instituted.

    The impact of electric charging station rebates will require more explanation.

    Electric Charging Station Incentives

    As mentioned before, the biggest reasons that people refrain from buying EVs (right behind cost, which we’ve already tackled) is charging station availability and charge range, which are intrinsically linked to one another—it doesn’t matter much if your car has a short range if there are charging stations everywhere, after all.

    This means that, if you want drivers to go all-electric, you need them to be sure they will be able to find charging stations outside of their home. In California, this is absolutely the case. It has more charging stations than any other state by an almost unbelievable margin—5,095 to the second-place Florida’s 1,165. Charging station density in California is closer to that of European countries with high rates of EV adoption than it is to the rest of the US.

    Which begs the question… Why are they so prevalent in California?

    Well, once again, rebates and incentives can be thanked. It’s a risk for any business owners to install these things, but California’s recent run of rebates can cover up to 75% of the installation cost of a mid-range charging station and up to $80,000 for a high-end one.

    Charging stations are an investment for a business. When they realize that investment will be subsidized by other entities, they feel more confident in taking the risk. Once that risk has been taken on a wide scale, people feel more confident buying EVs, as they now know that they won’t have any trouble finding charging stations for their vehicles.

    The Verdict?

    Prospective EV buyers are often most worried about two things: whether they’ll be able to charge their new EV, and the cost. Between the increased prevalence of charging stations (enabled by government incentives) and the rebates offered to EV buyers, those two worries are blown out of the water in California.

    This simple strategy has functioned in a state that has all the biggest worries that befall most states in the union. It worked. And if it worked in California, it can probably work on a wider scale.



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