For most, car-buying comes only at a point of necessity, when one’s vehicle is no longer suitable for their needs but their need for transportation remains. SHiFT’s focus is primarily on vehicles at this end-of-life point.
And yet, millions of Americans cannot continue their lives as normal without a personal vehicle in their possession. This is why vehicle purchasing is most often a direct factor in vehicle retirement.
While SHiFT aims to produce the best environmental outcome for vehicle disposal, it is difficult to understand the environmental impacts of retired vehicles without considering the vehicles replacing those that are retired.
So, this explains SHiFT’s interest in car buying habits and EV adoption more broadly. EVs are now pervasive enough that anyone purchasing a new car is likely to toy with the idea of EV adoption. There are many factors to consider in this instance, which will be elaborated on in this article.
For starters, let’s talk about what matters most to the majority of people: money!
EVs are rapidly becoming more affordable. According to Kelley Blue Book, the average transaction price for a Tesla vehicle dropped 24.7% from June 2022 to June 2023. Prices continue to face cuts in early 2024. This is a consequence of greater competition between EV manufacturers, decreased consumer demand, and decreases in the price of inputs. Lithium, a critical component in many EV batteries, is becoming cheaper, according to a recent report by the International Energy Agency (IEA). Prices are expected to continue a downward trend as mining capacities increase.
The cost of charging your EV will be dependent on how much you pay for a KwH of energy. This can be easily calculated by looking over one’s most recent electricity bill.
Most EVs get 3-4 miles of range per kWh, so depending on your transportation habits you can come up with a sense of how often you will need to charge your EV and how much you would be paying per a charge.
Energy.gov details these calculations as well as provides an estimate of EV charging costs based on the average price of electricity in the U.S.. Their estimate suggest $60/month in charging costs.
In 2023, qualifying individuals could receive up to $7,500 in federal tax credits for the purchase of a new EV, with the minimum credit per the IRS being $3,751. An additional $417 was added for each kilowatt hour of battery capacity greater than 5KW hours.
In 2024 individuals can redeem the $7,500 as a tax credit at the end of the year or apply it to the vehicle price at the moment of purchase at participating dealerships.
Additional requirements to receive the full credit were implemented in April of 2023, which include both a critical mineral requirement and a battery component requirement. Each of these new requirements are meant to encourage automakers to build up battery infrastructure domestically rather than relying on entities abroad.
It should also be stated that as of 2024 eligible vehicles “may not contain any battery components that are manufactured by a foreign entity of concern”. In 2025 this becomes even stricter: “an eligible clean vehicle may not contain any critical minerals that were extracted, processed, or recycled by a foreign entity of concern”.
These new restrictions mean that less vehicles qualify for the full tax credit in 2024 when compared to 2023; even less will qualify in 2025 as these restrictions continue to tighten.
Some states have their own additional incentive programs, California most notably. While the State’s Clean Vehicle Rebate Project was closed to new applicants as of November 2023, this program offered up to $7,500 to new clean vehicle drivers, which is on top of the $7,500 maximum credit offered federally.
Currently, Rhode Island offers up to $1,500.000 for eligible clean vehicle adopters. In many other states, including Alaska, Alabama, and Arizona for starters, certain electricity companies also offer incentives, albeit smaller, to customers who purchase an eligible EV or install a home charger. Kelley Blue Book provides a relatively up-to-date list on all available incentive programs by state, accessible here.
For a full list of eligible vehicles the IRS points consumers to fueleconomy.gov.
The second most important factor for most individuals, particularly those who do not own a home with the ability to install a home charger, is the availability of charging infrastructure.
It is very fair to have concerns regarding range and charging infrastructure, so much so that the U.S. Department of Energy released a statement in November 2023 titled “Correcting The Record About Electric Vehicle Sales”. In this report, they cite that at the time of writing, they have successfully installed 160,000 of 500,000 charging ports by 2030 per the National Electric Vehicle Infrastructure (NEVI) Formula Program. Correspondence from the White House as of January 2024 puts the number of chargers at 170,000 and states plans for reach the 500,000 goal by 2026. This could be impacted by the November 2024 Presidental elections.
Consumers can also feel reassured as EV chargers become more standardized, with most automakers adopting or pledging to adopt Tesla’s North American Charging Standard (NACS). The only holdouts on this are Stellantis (Jeep, Dodge, Ram, Chrysler, etc.) and Mitsubishi, but they are expected to submit to this new standard in the near future. The widespread deployment of charging adapters for current EV owners are also expected to also ease issues with charging incompatibility.
This factor is the one that SHiFT cares the most about but often falls low on the list of priorities for consumers compared to more practical concerns.
EVs have no direct tailpipe emissions. Instead, their in-use emissions can be attributed to the sources of electricity used to power them. Much of local power generation still depends heavily on natural gas or coal. With this said, renewable energy projects are numerous and growing. In 2020 renewables became the second largest source of U.S. electricity generation. To get a sense of your home energy mix, check out SHiFT’s latest post highlighting notable climate tools in 2024.
The non-renewables industry has long exploited uncertainty (see here) to sow doubt in the severity of the climate crisis. In actuality, all science comes with uncertainties; the recognition of the fact that very little can be certain is what validates the scientificness of it all.
There has been a degree of uncertainty surrounding the environmental benefits of EVs over their ICE counterparts. Despite a relatively small number of specific use cases (i.e. ordering an EV and keeping it for < 6 years or junking one’s nearly-new car to convert to an EV), the evidence is overwhelmingly in favor of EVs as better for the environment over traditional gas vehicles. They are better in terms of air quality, quantity of lifetime emissions, and options for alternative energy sources.
Purchasing a new or new-to-you car is a very personal decision. Only you can decide what is best for you and your transportation needs. For some, that might mean foregoing a car altogether. Despite its reputation for near ubiquitous driving, even the United States has seen a decline in per-capita driving in recent years. Despite these trends, cars will likely continue to be a mainstay of American society for many years to come.
