Barriers to Low-Income Electric Vehicle Adoption in California: An Assessment of Price Discrimination and Vehicle Availability

Research Team: Erich Muehlegger (lead) and Davis Rapson

UC Campus(es): UC Davis

Problem Statement: 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 adoption by Asian, White and high-income consumers. Understanding the low-rate of adoption for certain demographic groups is of particular interest to California legislators – SB 350 requires the California Air Resources Board to study barriers to zero-emission transportation options faced by low-income consumers.

Project Description: This study analyzes data for over 400,000 California vehicle sales between 2011 and 2015, containing information on the price paid by the consumer, the location of dealership, the zip code of the buyer and buyer demographic characteristics (e.g., race, gender, income, age) for each transaction. Researchers test for the presence of two commonly asserted barriers to electric vehicle (EV) adoption: (1) price discrimination against low-income consumers and (2) limited selection of EVs at dealerships proximate to disadvantaged communities, by comparing the prices and distance traveled for buyers of EVs in different demographic groups. As a control, researchers compare EV sales to sales of internal combustion engine (ICE) cars. Researchers find little evidence that price discrimination amongst demographic groups or differences in EV availability explain low rates of EV adoption.

Status: Completed

Budget: $80,000

Project Partner(s): California Air Resources Board

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