Is 2021 the Year that Everyone Can Afford An an Electric Vehicle?
by Christina Nagy-McKenna, Enerdynamics Facilitator
If 2020 was the year that the global automotive industry announced its intention to embrace electric vehicles as its future, 2021 is the year that all consumers will be encouraged to drive electric. No longer is the electric vehicle (EV) the car of the future. No longer is the market just a niche. EVs are mainstream. EVs are for everyone. EVs are now.
The number of new choices for consumers is staggering: SUVs, cross-overs, sedans, and hatchbacks are all available in plug-in electric and hybrid electric versions. Nostalgic much? There’s a Mustang. And soon a VW Minibus. But how do we get from showroom to driveway? And what are the incentives, chargers, and electric rates that are part of the new car-buying vocabulary?
To narrow the focus of the new EV market, we will concentrate on what is available to the majority of U.S. consumers for EVs that retail under $50,000. While this price is still fairly robust for an automobile, the federal government, selected state and local agencies, as well as local utilities offer a wide-range of incentives to catch consumers’ eyes and pocketbooks. These include:
- Cash rebates
- Electric rate discounts
- Emission test exemptions
- Free municipal parking
- HOV lane use
- Tax credits
The federal tax credit incentive is up to $7,500 on qualifying vehicles. However, current Tesla vehicles, the Chevy Bolt EV, and the Chevy Volt hybrid no longer qualify as they have already sold the number of vehicles (200,000) for which the government will provide rebates. In 2020, the federal government also renewed a long-expired tax credit up to $1,000 for qualifying charging equipment through Dec. 31, 2021. Currently up to 34 states offer some form of EV incentives from rebates to free parking. The list of incentives and qualifying vehicles is ever changing, and the best strategy for buyers is to check with their state, city, county, air quality district, and local utility to see if they offer incentives that match buyers’ needs.
Virtually every top global car manufacturer has a product in the under-$50,000 market. As long as consumers are not searching for a high-end sports car, there are plenty of choices in this price range. Most consumers are well acquainted with EVs such as the Nissan Leaf, Toyota Prius (albeit hybrid), Chevy Volt and Bolt, Tesla’s Models 3 and Y (the Y is priced just under $50K), and Ford’s Fusion and Escape. This is by no means an exhaustive list, and 2021 is bringing exciting new models including the aforementioned Mustang, the Volkswagon ID.4, KIA Niro EV, Hyundai Kona Electric, and Mazda MX 30 EV (only in California in 2021) in just the SUV and crossover market. Upping its hip credibility, Mini is releasing the 2022 Mini Cooper Electric to compete in the small sedan market. There’s no denying the cool factor of the new electric vehicles.
Getting from the showroom to the driveway is not difficult as electric chargers and rates with EVs in mind are becoming increasingly commonplace. Most consumers will need a either Level 1 Charger that uses a standard 110-volt outlet or a Level 2 Charger, which requires 240 volts. While sticking with a traditional 110V outlet may be tempting, the higher the voltage, the faster the charge. Incentives for chargers focus on Level 2 chargers, which may require an upgrade to a homeowner’s electrical panel and a new or upgraded connection point for the vehicle.
A number of utilities across the country help offset the cost for the upgrade by offering a rebate. For example, Georgia Power offers a $250 rebate to eligible customers who install a Level 2 Charger at their home. (This is in addition to the federal tax credit described above.) Electric utilities have in some cases designed rates specifically for electric vehicles or offer a time-of-use rate that encourages charging a car during off-peak hours when electricity is cheapest. In Michigan, four utilities offer discounted EV rates based on time-of-day. As the market share of electric vehicles increases, it is likely that more states will join in and create incentives and rates for EV drivers.
As people return to their commutes, carpools, and road trips in 2021, the options to reduce their carbon footprint via an EV will be full of exciting choices. We as consumers will be courted by an industry telling us that the future is here and EVs are now, an industry that has committed to a future free of combustion engines in the next 10 to 15 years. With the entry of so many new SUV and crossover vehicles plus generous financial incentives from some government agencies, perhaps we’ve reached the point where most consumers will at least consider an EV if they are looking for a new car. Time for a test drive?
Bibilogaphy
Capparella, Joey, “2022 Mazda EV-30 Coming to California This Fall, Hybrid to Follow,” Car and Driver, April 14, 2021.
Electric Vehicle Charging 101
“Federal Tax Credits for New All-Electric and Plug-in Hybrid Vehicles, U.S. Department of Energy, Office of Energy Efficiency and Renewable Resources," https://fueleconomy.gov/feg/taxevb.shtml
“IRC 30D New Qualified Plug-In Electric Drive Motor Vehicle Credit,” https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit
https://www.tesla.com/support/incentives
Oldham, Scott and Austin Irwin, “Here’s Every New Electric Vehicle Model for Sale in the US,” Car and Driver, February 11, 2021.
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