Blog 26.07.23

The Hidden Disparities in California’s Electric Vehicle Rebate Program

Climate change disproportionately impacts historically marginalized communities, yet some of the very programs meant to combat the crisis are exacerbating these inequities. California’s vehicle electrification efforts primarily benefit wealthy communities to the exclusion of historically marginalized communities, including low-income individuals and people of color.

The Clean Vehicle Rebate Project (CVRP), launched in 2009 to reduce car emissions, offers rebates for electric, plug-in hybrid electric, and fuel cell vehicles. The state dedicated 17%, or $238 million, of the state’s 2019–2020 Greenhouse Gas Reduction Fund discretionary spending to the CVRP. To date, $1 billion, or roughly 450,000 individual rebates, have been distributed.[1]

However, a recent study from PLOS Climate found that the program benefits some more than others. To date, 46.4% of the rebates have gone to more affluent communities, while more disadvantaged communities[2] received only 7.27%. A few reasons for this disparity include the program requiring buyers to pay the full price upfront, which creates a financial barrier for low-income groups. More disadvantaged communities also have less exposure to the CVRP’s marketing materials, and, as a result, are less likely to be aware of the program.

Disadvantaged communities not only receive fewer rebates, but also suffer from an increase in pollution. The shift from traditional vehicles to electric vehicles moves pollution from tailpipes to power plants. Disadvantaged communities constitute 25% of the state’s population but contain 50% of its natural gas power plants. While car emissions decrease with fewer gas and diesel cars on the road, emissions from power plants used to power electric vehicles increase.

When sustainability programs fall short, it can be because they fail to focus on the needs of disadvantaged communities. This is not specific to the CVRP. Green space initiatives in urban areas, for example, often drive-up home values and displace low-income communities because they increase property values. Successful sustainability programs center race, class, gender, and the experiences of other marginalized communities in their conception. Programs that do not risk perpetuating long-standing inequities. 

[1] Black and Richards, 2020. Eco-gentrification and who benefits from urban green amenities.

[2] Disadvantaged communities are defined as those suffering the most from economic, health, and environmental burdens.

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Talia Vicars

ESG Consultant

Clients: United Rentals, Utz

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