A few years ago, Greg Platt, an electric vehicle salesperson in Portland, Oregon, was having extraordinary success with a particular type of customer: foreigners. For a $250 fee, he’d ship cars north, where they usually crossed to western Canada by ferry. Other interested buyers would fly in from Europe. He’s still not sure why—it may have been exchange rates or local incentives or simply sudden enthusiasm for new tech. But the takeaway was clear: People in other countries wanted those cars, and Americans didn’t. So Platt sold new EVs in the US and used ones elsewhere.
That’s all changed. Now, there’s no shortage of demand for EVs, new or used. For Platt, the problem is supply. His sales haven’t changed much, but now most buyers are American, and he thinks he could sell many more vehicles—if he could get them. “Demand for EVs is astronomical, what people are willing to pay for them” is remarkable, he says. “I’ve never seen anything like this, and I’ve done this a long time.”
Used EVs are going mainstream. Half a million may be sold in the US by the end of the year, according to estimates by the startup Recurrent, more than double sales of three years ago. Just a few years ago, used EVs were a hard sell. Now there are more options, more familiarity, fewer fears about batteries and range, and more public chargers, with even more on the way. Platt describes the psychological shift simply: “It doesn't seem any different than a normal car for most people.” It also doesn’t hurt that gas prices are way up.
At the same time, supply is constrained. Fewer new cars are available, in part because of the global chip shortage, pushing buyers to used ones instead. The EV market also temporarily lost one of its bestsellers, the Chevy Bolt, to a wide-ranging recall, just as those vehicles were being freed from leases and sent to used cars lots. Altogether, prices for used EVs climbed even faster than for their gas-powered counterparts over the summer, according to data analytics firm Marketcheck.
Governments are jumping in, too. Local utilities have provided incentives for the EV-curious. States including Connecticut and Oregon offer rebates for pre-owned electric vehicles. Many of the programs aim to get lower-income people into EVs because so far electric vehicle drivers tend to look a certain way: male, white or Asian, high-income, highly educated, homeowners. In part, that reflects the cost of new EVs; even “entry-level” models like the $44,000 Tesla Model 3 and $31,000 Chevy Bolt are out of reach for many. But it’s also about where people live and whether they have access to charging at home or around town. In 2020, California drivers represented 42 percent of the 1 million new EV registrations in the US. In states like West Virginia and Mississippi, total registrations numbered in the hundreds.
Now Congress is considering something similar. The House of Representatives’ version of the Build Back Better Bill—still a work in progress on Capitol Hill—could for the first time give buyers federal incentives to buy a used electric car. A recent draft includes a $2,000 credit for a car that’s at least two years old and then another $2,000 credit if its battery still has at least 40 kWh of battery capacity, which includes most all-electric vehicles. The bill also includes a credit of up to $12,500 for any new electric vehicle, up from an older $7,500 federal credit that’s been phased out for big automakers like Tesla and General Motors as they’ve sold more EVs.
Environmental advocates say the tax credits could make EVs—new and used—more attainable for people with moderate incomes. They argue that EVs need to be more than a luxury commodity that’s been subsidized mostly for the rich.
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And yet local programs have struggled to attract takers, even among low-income residents. Oregon’s clean vehicle rebate program, begun in 2018 for low- and moderate-income households, has seen just 516 buyers opt for used EVs, or about 5 percent of the vehicles purchased through the program. The rest bought new models.
Alejandra Posada, who manages the used EV rebate program for Peninsula Clean Energy, an electric utility in San Mateo, California, cites several reasons for the slow uptake. Most participants in that program, which launched in 2019 for low-income residents, were looking for cheaper vehicles that left them few EV options with extended range. Those buyers were often single-car households and wanted an EV as their primary vehicle—not as a second car for puttering around town, a more common situation for wealthier buyers. Over the first two years, around 30 of the program’s 100 or so takers opted for fully electric cars, Posada says. Most instead opted for plug-in hybrids, which typically have a few dozen miles of all-electric range before a gasoline engine takes over.
“It’s a high-touch job,” Posada says of setting people up with used EVs. That includes helping people navigate other incentive programs to make the costs more reasonable. She talks through their uncertainties about batteries and range and the logistics of charging. Many people don’t know, for example, that they can plug an EV into a standard outlet.
Plenty of Americans are confused about the basics of EVs, says Jeff Allen, the executive director of Forth, an advocacy and research organization focused on electric mobility. A question he still hears from drivers: “‘Can I take it safely through the car wash? Spoiler: Yes,” he says.
Fears about EV batteries are diminishing, too. “The batteries in these cars have really outperformed what [car companies] thought they would do,” says Luke Walch, who owns the used electric vehicle dealership Green Eyed Motors just outside Boulder, Colorado. A cottage industry of battery health diagnostic companies has sprung up to assess used cars. With permission from owners, Recurrent collects data from 6,000 EVs on the road. “Transparency here helps accelerate the market,” says cofounder and CEO Scott Case.
Stephanie King, who lives outside of Portland, Oregon, bought her second electric vehicle—and first used one—this month, after a crash totaled her old car. Her used 2019 Kia Niro was more expensive than the new one she bought two years ago, but there just wasn’t that much available, she says. For King, driving electric is non-negotiable, especially because she’s a full-time ride-hailing driver who puts a lot of miles on her car. “I couldn’t do that to my planet,” she says of gas-powered cars. She’s filing paperwork to take advantage of Oregon’s rebate program now.
Policy experts are divided on the value of EV incentives, especially for used cars. For reducing greenhouse gas emissions, “it’s not a well-targeted solution,” explains economist Dave Rapson, who teaches at the University of California at Davis. EVs are greener than conventional cars, but they still make use of a dirty electric grid, and money spent forcing their adoption might be better used getting utilities and big industries to clean up the energy supply. Tax credit programs for new EVs have proven expensive, with part of the benefit absorbed by automakers who may use it as an opportunity to raise prices. That sort of padding might have made more sense a decade ago, when carmakers were reluctant to build any electric vehicles at all, but are less so now, with a dramatic shift to all-electric lineups. (That’s one reason the initial federal tax credits phased out when an automaker sold 200,000 vehicles.) And insofar as those discounts do help lower the prices of electric vehicles, additional incentives for used cars result in “double dipping,” according to Rapson, because the government is subsidizing the same car twice.
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But if the mission is simply to get more people driving electric cars? In that respect, incentives do the job, Rapson adds—so long as they’re designed well. Existing incentives for new EV buyers aren’t helpful for many people because these incentives are structured to reduce tax burdens on higher incomes. The recent House of Representatives draft of the Build Back Better bill would help solve that problem by applying a rebate when the buyer purchases their vehicle so it can go toward their final car payment. The dealership would be reimbursed by the IRS.
Pete Slowik, a senior researcher in the electric vehicle program at the International Council on Clean Transportation, believes incentives are key to getting more and different kinds of people into EVs. “Our research finds that the financial savings from EVs relative to household income are significantly higher for lower-income households,” he says, largely because poor people spend a higher proportion of their income on fuel. These customers are also more responsive to incentives than wealthy buyers, who were likely going to buy the new car anyway.
Posada argues it is as crucial as ever to encourage EV sales because EVs are not just good for the planet, but for the people who switch to them from gas-powered cars. Providing they can find a car. In August, Posada’s program in San Mateo relaunched without income requirements, and it now has about 200 people in the queue, she says, with a shopping period that’s double the norm as buyers struggle to find the perfect vehicle. It’s heartening to see the interest, and she hopes the supply crunch is a hiccup that won’t discourage buyers. Because the world needs a lot more of them. Even in the heart of the electric-happy Bay Area, EVs remain a small fraction of new vehicle registrations—far too few, in her view, to reach an imminently carbon-free future.
Updated, 11-18-21, 6:20pm ET: An earlier version of this article incorrectly characterized how Dave Rapson of UC Davis described “double dipping.”
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