Abstract:

This analysis finds that cost reductions in new electric vehicles (EVs) will lead to decreased used EV prices and cost parity with used gasoline vehicles for low-income households in the 2025-2030 time period. Higher rates of depreciation for first owners of EVs will lead to larger benefits for lower-income second owners. By 2029, EVs will reach upfront price parity with the average vehicle purchased by a low-income household, less than two years after the average vehicle purchased by a high-income household. Currently, once accounting for fuel and other operating savings, some households in all income groups could save money by replacing at least one vehicle with an EV; this increases to 45% of households by 2025 and 95% of households by 2030. Previous studies have shown that low-income EV buyers are more responsive to incentives, and that purchase incentives have become more important over time.