Reducing the Risk of Investing in Electric Vehicles for Low-Income Consumers

This briefing discusses the barriers to electric vehicle (EV) adoption for low-income consumers, specifically highlighting the risk of high repair costs. It argues for strategic investments in EV government fleets and public transportation to benefit environmental justice communities while cautioning that subsidies for individual purchase must be paired with considerations for full lifecycle costs to prevent vulnerable households from losing vehicle access.

• Low-income consumers face significant barriers to EV adoption, including vehicle purchase costs and the risk of expensive maintenance and repairs. While the U.S. Inflation Reduction Act provides used EV tax credits of up to $4,000 or 30 percent of the cost, repair costs remain a critical risk; for example, replacing a damaged EV battery can cost between $5,000 and $15,000.
• High repair and maintenance costs are the primary reason low-income households transition out of car ownership. For a surveyed group that lost access to their cars, 32 percent experienced job loss and 58 percent reported decreased job opportunities. Additionally, 52 percent reported a negative effect on their quality of life, with others noting impacts on caregiving and medical care access.
• Investing in EV heavy-duty fleets, such as school buses and delivery vehicles, is recommended for community-level benefits. These vehicles have lifecycle costs estimated to be on par with or lower than combustion engine vehicles. The Environmental Protection Agency's Clean School Bus Rebates program, funded by the Bipartisan Infrastructure Law, estimated $500 million in total funding for 2023 applications to replace fleets and add charging infrastructure.
• Research indicates that replacing internal combustion engine vehicles with EVs leads to significant emission reductions, even if 50 percent of the electricity is generated by fossil fuels. While cities wholly reliant on fossil fuels might see a temporary increase in carbon emissions, the overall net impact is likely negative due to CO2 reductions and technological innovation.

APA

Rasch, R. (2024). Reducing the Risk of Investing in Electric Vehicles for Low-Income Consumers. Energy Innovation. https://energyinnovation.org/expert-voice/reducing-the-risk-of-investing-in-electric-vehicles-for-low-income-consumers/

Chicago

Rasch, Rebecca. Reducing the Risk of Investing in Electric Vehicles for Low-Income Consumers. Energy Innovation, 2024. https://energyinnovation.org/expert-voice/reducing-the-risk-of-investing-in-electric-vehicles-for-low-income-consumers/.

Wikipedia

{{cite report |last1=Rasch |first1=Rebecca |title=Reducing the Risk of Investing in Electric Vehicles for Low-Income Consumers |publisher=Energy Innovation |date=29 March 2024 |url=https://energyinnovation.org/expert-voice/reducing-the-risk-of-investing-in-electric-vehicles-for-low-income-consumers/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rasch2024reducing, author = {Rasch, Rebecca}, title = {{Reducing the Risk of Investing in Electric Vehicles for Low-Income Consumers}}, institution = {Energy Innovation}, year = {2024}, month = mar, url = {https://energyinnovation.org/expert-voice/reducing-the-risk-of-investing-in-electric-vehicles-for-low-income-consumers/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }