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SUPPORT: Senate Bill 1445, Electric Vehicle Manufacturers

SB 1445 helps Californians afford EVs and supports well-paying jobs for Californians

 

May 1, 2020

Senator Ben Allen

State Capitol, Room 4076

Sacramento, CA 95814

RE: SUPPORT: Senate Bill 1445, Electric Vehicle Memberships

Dear Senator Allen:

On behalf of the Los Angeles County Economic Development Corporation (LAEDC), an organization whose purpose is to collectively advance opportunity and prosperity for all the residents of Los Angeles, please accept this letter in support of Senate Bill (SB) 1445.

Today in California, wealthier households, i.e. those earning over $100,000 per year, are far more likely to own electric vehicles(EVs) than those at lower income strata, and mass adoption of electric vehicles will not happen in the state as long as electric vehicles continue to be more costly than combustion engine vehicles. According to the American Automobile Association, electric vehicles currently cost, on average, about $600 more each year than owning combustion-engine cars. SB 1445 undoes this electric vehicle ownership disparity by making it more cost-effective for more Californians to have access to an electric vehicle via a month-to-month subscription arrangement.

Specifically, this bill would create a legal framework for “electric vehicle memberships” that provides easy access to electric vehicles without up-front costs, expensive financing agreements and/or longterm commitments. Procedurally, SB 1445 is necessary because the electric vehicle membership model does not fit squarely into existing laws regulating the rental car industry or vehicle leasing. While electric vehicle sales in California are increasing, they are not increasing at a pace that will be required to meet the state’s zero emission vehicle goals. As electric vehicles remain more expensive to buy than traditional internal combustion engine vehicles, alternative ownership options are necessary to get more California consumers into these EVs. This is because many consumers lack stable employment, good credit, or the discretionary income necessary to save for a down payment; in essence, too many Californians have been locked out of the electric vehicle market – a market that we must expand in order to meet our state’s greenhouse gas emission reduction and other air quality goals.

Expanded consumer access will also drive California’s electric vehicle industry growth, as California already has distinct productive advantages in this industry vis-à-vis other states and nations, and the EV industry is concentrated and uniquely positioned in California with 13 electric vehicle company headquarters in the state, along with 43 electric vehicle companies who have a design presence, R&D facility or warehouse in California. This represents a significant and concentrated industrial ecosystem supporting 275,600 good-paying jobs. Clearly this is a growth industry that California needs to support. But first, consumers in California need a more accessible, short-term commitment option to access the electric vehicle market; an option that this bill would provide.

For these reasons, the LAEDC is pleased to support SB 1445.

Sincerely,

David Flaks

President & COO

Los Angeles County Economic Development Corporation

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