Expanding EVs to Everyone: Developing a Business Model to Bring EVs to Low-Income Californians

Electric vehicles (EVs) are a valuable tool in addressing the climate and energy challenges placed on our transportation systems. However, while national and international market shares of EVs have been rising with exponential rates, access to EVs of low-income populations has been significantly slower. New Mineta Transportation Institute (MTI) research, Developing a Feasible Business Model for Expanding the EV Market to Lower Income Californians, conducted surveys to create a business model that would bring EVs to more low-income Californians.

The study’s findings—based on a statewide representative sample of 1,450 complete responses from low-income households—and qualitative data from various stakeholders (e.g., electric and solar companies, professional and community-based organizations, state agencies, research institutions, and more) revealed that:

• Generally, there is willingness among stakeholders to engage with new ideas and creative solutions to change the dynamics within the EV market, overcome its obstacles, and serve low-income Californians.
• As for low-income Californians, it seems that the lack of adoption is mainly related to cost, convenience (e.g., in charging, limited mileage range, and limited models available), charging infrastructure, and financing options. If these issues are addressed, residents’ willingness to purchase or lease an EV will be positively impacted, based on survey results.
• This research identifies various courses of action for the business model, including: government investment in charging stations in low-income neighborhoods; offering leasing as a solution to increase the adoption of EVs among low-income Californians; and the importance of bilingual outreach and education in increasing awareness, especially of financing opportunities.

“One common finding has been that people lack information about the costs, benefits, charging infrastructure, and incentives surrounding electric vehicles,” explain the study’s authors. “This barrier was compounded for low-income individuals, who may not be exposed to electric vehicles frequently in their communities and who may have limited access to broadband internet service and therefore can’t access information on clean vehicles, incentives, and/or the locations of charging stations.”

The expansion of the EV market to low-income Californians is a challenging task that requires the collaboration of multiple stakeholders. Currently, EV programs for low-income Californians require a higher level of integration and new synergies to more effectively overcome the existing barriers. Hence, the integrative business model offered in this research creates such an integration and includes some revenue streams to aid the sustainability of this expansion. The model can be used by state administrators, policy makers, and social organizations to mitigate the barriers faced by low-income Californians within the EV market.

ABOUT THE MINETA TRANSPORTATION INSTITUTE

At the Mineta Transportation Institute (MTI) at San Jose State University (SJSU) our mission is to increase mobility for all by improving the safety, efficiency, accessibility, and convenience of our nations’ transportation system. Through research, education, workforce development and technology transfer, we help create a connected world. Founded in 1991, MTI is funded through the US Departments of Transportation and Homeland Security, the California Department of Transportation, and public and private grants, including those made available by the Road Repair and Accountability Act of 2017 (SB1). MTI is affiliated with SJSU’s Lucas College and Graduate School of Business.

ABOUT THE AUTHORS
This research was completed under the California State University Transportation Consortium (CSUTC). Dr. Samer Sarofim is an award-winning marketing scholar and educator. He is a Faculty Fellow at Fresno State Transportation Institute and an Assistant Professor of Marketing at Craig School of Business, California State University – Fresno. Dr. Sarofim’s research has appeared in multiple prestigious academic journals, including Marketing Letters and the Journal of Business Research. Aly M. Tawfik, Ph.D., PTP is an associate professor of transportation systems engineering and founding director of the Transportation Institute at California State University, Fresno. His area of expertise includes modeling as well as simulation and optimization of individual travel behavior and transportation systems, and he has a particular passion for transportation sustainability and the future of transportation.

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