Increasing Electric Vehicle Adoption in the Second-Hand Market

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Plug-in electric vehicles (EVs) provide benefits to all Americans: cleaner air, reduced healthcare costs, reduced reliance on foreign oil and improved national security, financial savings for consumers, jobs in the technology and innovation sectors, and reduced carbon emissions. Given these benefits, it is no surprise that adoption of these clean vehicles is growing, with nearly 1.5 million EVs on the road throughout the U.S. today. These light-duty passenger EVs are one piece of the larger transportation sector that is transitioning to an all-electric future.

Photo credit: Expert Meetings Plus

In order to reap the benefits from a fully electric transportation sector, all aspects of the light-duty vehicle sector need supportive policies. One often overlooked sector is the second-hand EV market. With thousands of new EVs coming off of leases, used EVs are more available than ever before, particularly in states where there has been a growing new EV market the past few years. Since battery electric vehicles (BEVs) have ten times fewer moving parts than gas cars, the only major concern in purchasing or leasing a used EV is the quality of the battery. Even with plug-in hybrid EVs (PHEVs), which run on electricity and/or gas, these cars experience less wear and tear because the miles driven on the electric motor reduce wear on the internal combustion vehicle components. In terms of the battery, most BEVs and PHEVs are under warranty by the automaker for typically eight years, but the batteries can last anywhere from 15-20 years or longer without losing much capacity to hold a charge, depending on how the vehicle is driven and charged.

Used EV Purchase Incentives

Federal, state, and local incentives have lowered the effective purchase price of new EVs, which in turn has lowered the cost of used EVs. There are an increasing number of used-EV incentives, which can take the form of a straight rebate, a “cash for clunker” program, or a reduced charging rate from local utilities. These incentives are important to make EVs even more affordable to traditionally underserved communities and lower income households. Most existing examples of used EV incentives are direct rebates, though new policies targeting lower-interest loans may also be highly effective. Regardless of the form of the purchase incentive, ensuring there are new and used vehicles on the road broadens the visibility of these vehicles amongst all consumers.

California:

  • The Clean Cars for All program focuses on providing up to $9,500 through the California Climate Investments (CCI) to lower-income California drivers to scrap their older, high-polluting cars and replace it with a new or used BEV or PHEV. The program is limited to vehicle owners residing in participating air districts, and those who meet income and vehicle requirements.
  • The Low Carbon Fuel Standard requires the utilities in CA who have opted in to this program to offer a credit back to current and future EV drivers. The credit has ranged from $50-$1000 depending on the utility, and may be used for the purchase of a used EV.
  • Pasadena Water and Power (PWP) provides rebates of $250 to residential customers who purchase or lease an eligible new or used EV. An additional $250 is available if the EV was purchased or leased from a Pasadena dealership. Customers participating in PWP’s income-qualifying programs may also qualify for an additional $250 rebate, for a total of $750.

Florida: The Orlando Utilities Commission provides rebates of $200 to residential customers who purchase or lease an eligible new or used EV. Applicants must apply within six months of the purchase or lease of the EV.

New Hampshire: The New Hampshire Electric Co-op offers rebates of $1,000 for the purchase or lease of a new or used BEV, and $600 for the purchase or lease of a new or used PHEV.

Oregon: Clean Vehicle Rebate Program: Low and moderate income households may be qualified for the Charge Ahead program, which offers a rebate of $2,500 for the purchase or lease of a new or used BEV or PHEV. All EVs must have an MSRP of $50,000 or less.

Pennsylvania:

  • Duquesne Light Company offers a rebate of $1,000 to DLC customers for the purchase or lease of a used BEV or PHEV.
  • The state Alternative Fuel Vehicle rebate offers $750 for “one-time preowned” BEVs and $500 for a “one-time preowned” PHEV with less than 75,000 miles.

Washington: The retail sales tax of 6.5% will not apply to either the sale or lease of used BEVs or PHEVs with a range of at least 30 miles.

Battery Replacement Programs for Used EVs

Some states are also implementing policies that will assist buyers of used EVs to replace the battery in an EV, if certain criteria are met. One such state is California. The California Air Resources Board will establish the Zero Emission Assurance Project (ZAP) to offer rebates for the replacement of the battery or other related vehicle component for eligible used EVs. Rebates will be limited to one per vehicle, and applicants must be at or below 80% of the statewide median income, and will be available through July 31, 2025.

Zero and Low Interest Loans for Used EVs

Financing programs can help consumers purchase used EVs, particularly low-income consumers. In Washington state, the “EVs for EVERYONE” program is offered to Washington residents through a partnership between Plug In America and the Express Credit Union. Loans to purchase a new EV are as low as 3.24%, while loans to purchase a used EV are as low as 3.49%. Applicants also receive a free access to Plug In America’s EV Support Program, and also have optional access to an experienced EV owner as a mentor to assist in the car buying process. In California, the Clean Vehicle Assistance Program is administered by the Beneficial State Foundation (BSF) and offers low-income Californians grants of up to $5,000 for a used EV (or new) and affordable financing opportunities (≤ 8% interest); including up to $2,000 for a Level 2 home charger installation for eligible vehicle purchases or a $1,000 prepaid charge card and a free portable Level 1 charger.

If you have questions, contact us at info@pluginamerica.org.