MONEY Autos

Poor People Can Get Cars for Free in California Pilot Program

Nissan LEAF
John Murphy Photography—Nissan Nissan LEAF

You wanted an electric car, right?

A recently introduced pilot program in California is full of incentives aimed at simultaneously getting old pollution-spewing vehicles off the roads and putting low-income drivers behind the wheels of energy-efficient cars. The incentives are so generous and flexible that, in the right situation, a car can be purchased for $0. No joke.

The program is available to poor residents of certain “disadvantaged” areas of California, specifically the greater Los Angeles area and the San Joaquin Valley. Simply enough, the program from CARB (California Air Resources Board) works by “providing increasingly larger cash payments for the lowest-income families to move up to the very cleanest cars.”

How large are these cash payments? Upwards of $12,000, plus up to another $2,000 for the purchase of a charging unit for electric cars.

The incentives are based on a sliding scale, with the most money going to the poorest households that are turning in old clunkers and buying the most fuel-efficient cars possible. A household in the appropriate residential area with income at or below 225% of the federal poverty level is eligible for $9,500 with the purchase of a used electric car like the Leaf, or a plug-in gas-electric hybrid such as the Volt. An additional incentive of up to $2,500 is provided for the purchase of a brand new electric car, for a total of $12,000. A payment of up to $2,000 comes on top of that to help cover the cost of getting a charging unit installed.

No matter how noble the intentions of such a program, it must be noted that thus far low-income households have shown very little interest in electric cars. Plug-in vehicles account for a very small percentage of the car market, and early on, the buyers have tended to be overwhelmingly wealthy and well-educated. Certainly, the impracticality of owning a car that can be driven only 70 or 80 miles before requiring a recharge has been holding back electric cars from appealing to middle- and low-income drivers alike. The high purchase price of an electric car or even a hybrid like the Toyota Prius compared with a high-mileage used sedan has obviously also meant that many poorer drivers have never even considered an EV.

California’s pilot project aims to change some of the math concerning the affordability of more fuel-efficient cars. What’s most notable is that incentives are available not only for pricey new plug-ins, but for used, low-cost hybrids as well. Drivers who are in the lowest income category can get $6,500 if they’re scrapping an old car and purchasing a hybrid that is less than eight years old and gets at least 20 mpg. The incentive goes up to $7,000 for the purchase of a hybrid that gets 35 mpg or better.

As Wards Auto recently reported, in the right set of circumstances, it is indeed possible for low-income motorists to “end up driving off with a free EV.” What’s more, Green Car Reports noted, “The program doesn’t even require you to buy a replacement car. Instead, depending on your income level, you could, in return, get public transit passes worth between $2,500 and $4,500.”

MONEY Autos

The Case for Buying an Electric Car Is About to Get a Whole Lot Better

2015 Chevrolet Bolt EV
Luke Ray—Fuel Press Chevrolet Bolt EV Concept all electric vehicle with more than 200 miles of range and a price tag around $30,000.

Drive 200+ miles on a single charge, without paying Tesla prices.

Electric car sales have stagnated through the first half of 2015. Sales have slumped for several reasons, including cheap gas prices and increased fuel efficiency among gas-powered automobiles.

In May, dramatic price cuts helped boost sales of models such as the Chevy Volt, and the month saw the most EV sales of 2015, according to InsideEVs. Still, the May 2015 EV sales total of 11,540 was 7% lower than May 2014. The Nissan Leaf, the overall electric-car category leader, has been struggling in particular. After failing to cross 2,000 unit sales in any month in 2015, the Leaf finally hit the mark in May. But through the first five months of the year, only 7,742 Nissan Leafs have been purchased, a decrease of more than 25% off last year’s pace.

Over the next few years, however, advances in electric car technology could very well turn skeptics into plug-in adopters.

While purchase prices have decreased, EVs remain impractical for many households for the time being. Presumably, a large portion of drivers is reluctant to go electric because of limited driving range. Unless you’re willing to pay $70,000 or more for the likes of a Tesla, you’ll be limited to driving 70 or 80 miles per charge with the Leaf and nearly every other reasonably priced purely battery-powered vehicle. That’s just not enough for drivers who want a car that’ll be worry-free on road trips, longer commutes, and long days full of running errands.

Soon, though, the so-called “range anxiety” factor could be reduced significantly. Earlier this year, GM introduced a concept called the Chevy Bolt, an all-electric vehicle that should appeal to the masses seeing as it’s expected to be both affordable (around $30,000) and practical (200 miles per charge).

Chevy hasn’t said when, exactly, the Bolt will be available for purchase, but it’s been widely reported that the likely date is sometime in 2017—probably late 2017. According to industry analysts cited by Automotive News, buyers could be behind the wheel of Bolts sooner than that. Production of the Bolt is expected to begin in October 2016, and sales would commence shortly thereafter.

By then, there could be even more compelling reasons to wait a little longer for what Nissan has in the works for the Leaf. Another Automotive News post notes that Nissan is working on a next-generation battery that would allow the Leaf a driving range of roughly 310 miles per charge. Such an impressive range won’t be available in the forthcoming 2017 Nissan Leaf, which should hit the market next year with an expected range of 105 to 120 miles.

What’s more, next year Tesla, which thus far has focused on the high-end market, is expected to introduce the Model 3, a mass-market vehicle rumored to have an impressive driving range and starting price ($35,000) that could come to dominate the field.

Overall, one or more of these new vehicles could be real game changers, with affordable prices and vastly improved driving ranges that’ll make the best arguments yet for switching to an EV.

Read next: Cheap Gas Helps Pull the Plug on Electric Cars

TIME Elon Musk

Tesla’s Elon Musk Just Had the Worst Birthday Ever

Tesla Elon Musk
Noah Berger—AP Tesla's CEO Elon Musk.

A disastrous weekend for both Tesla and SpaceX

Elon Musk turned 44 on Sunday, but the entrepreneur probably wished he could just crawl back into bed and forget the day ever happened.

It was, to be frank, a disastrous weekend for both Tesla and SpaceX, the two companies Musk leads.

First, the biggie: an unmanned SpaceX rocket on a resupply mission to the International Space Station exploded after it was launched. No one was hurt, and the astronauts on board the Space Station have enough supplies to last until October, but the Falcon 9 rocket that was destroyed represents a lot of lost capital, and it’s always embarrassing for an aerospace company when a craft just, well, explodes.

In news that was slightly less spectacular, but still troubling, reports say Musk said Tesla owners weren’t using the battery swap technology he debuted in 2013. While this doesn’t have quite the visual impact of an exploding rocket, it’s still not good news for a service that Musk and other Tesla execs hoped would help show consumers that electric cars, like Teslas, can be taken on longer trips with minimal wait time.

Musk himself admitted to having a bad day:

We hope your Independence Day weekend is better, Elon.

TIME Tesla

Tesla Shareholders Want a Vegan Car

But they probably won't get one

Some owners of Tesla Motors shares want the electric car company to make its cars more ethical — by taking out the leather seats.

Two shareholders, Mark and Elizabeth Peters, made a presentation at the company’s annual shareholder meeting Tuesday, asking Elon Musk and the rest of Tesla’s leadership to stop using animal products in the interiors of Tesla cars, and to go completely vegan by 2019, according to Bloomberg.

Right now, the Tesla Model S is available without leather seats, but not without leather trim. The couple said it was extremely difficult to get a vegan Model S.

Mark and Elizabeth Peters seem unlikely to get their wish, however, as the board of directors recommended against implementation of their plan.

For more details, head to Bloomberg.

MONEY Autos

Cheap Gas Helps Pull the Plug on Electric Cars

2014 Chevy Spark EV
GM 2014 Chevy Spark EV

Sales of the Nissan Leaf and other electric cars have dipped thus far in 2015, and automakers have resorted to price cuts to boost interest in plug-ins.

How does the price of gas correlate to electric car sales? One might reasonably assume that the higher gas prices go, the more likely battery-powered vehicles are to appeal to the masses. When gas prices are cheap, on the other hand, interest in electric cars would tend to fade, as the difference in the cost of charging versus fueling up shrinks.

Jessica Caldwell, director of industry analysis at Edmunds.com, has said that gas prices “certainly” have an effect on electric car sales. This week, Edmunds released some data that may seem particularly alarming to green car enthusiasts: Thus far in 2015, 22% of owners who traded in hybrid or electric cars did so while buying an SUV; only 12% did such as swap three years ago.

“For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment,” Caldwell said in a press release timed to coincide with Earth Day. “Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative fuel vehicles. But with today’s gas prices as low as they are, the math just doesn’t make a very compelling case.”

Edmunds is hardly the only auto industry observer to take note of how low gas prices affect car purchases. John Krafcik, the former CEO of Hyundai Motor America and current president of the car-buying website TrueCar.com, explained to NPR, “During months when gas prices are low, less fuel-efficient cars tend to take a greater share of the market and vice versa. It’s a fairly one-to-one relationship.”

Yet other data indicates that falling gas prices have little, or perhaps no, impact on sales of electric vehicles. The Los Angeles Times pointed out that plug-in EV sales were up 3% in January 2015—when the national average price for a gas was a cheap $2 per gallon—compared with sales in January 2014. Sales of the plug-in Nissan Leaf remained strong last fall and hit a record high for 2014, even as gas prices plunged and fuel-efficient hybrids like the Toyota Prius struggled to win over buyers. Some electric car enthusiasts have therefore concluded that “gas prices don’t affect electric car sales,” or that there is “zero correlation” between gas prices and plug-in electric vehicle sales.

Let’s look at how things have played out over the past few months, however, during a time when gas has remained cheap, and when forecasts indicate that prices at the pump will stay low for some time to come.

Indeed, EV sales in January 2015 surpassed the same month in 2014, and sales in the first three months of this year are above the corresponding period from 2014. According to Inside EVs data, 23,339 plug-in cars were purchased in the U.S. from January to March 2015, compared with 22,671 for the same three months in 2014. Yet 2015’s total includes 2,681 sales of the BMW i3, a vehicle that wasn’t on the market during the same period in 2014. What’s more, sales of the $70K+ Tesla—which, presumably, few buy for the sake of saving money on fuel—have taken off lately. Through March 2015, an estimated 4,700 Tesla Model S vehicles have sold, compared to 3,500 a year ago. Remove the i3 and the Model S from the equation, and EV sales in 2015 have fallen behind the 2014 pace.

Notably, the world’s best-selling electric car, the Nissan Leaf, is in a sales slump. Just over 4,000 Leaf purchases have been made in the U.S. during the first three months of 2015, down more than 20% compared with roughly 5,200 for the corresponding period a year ago. The #2 best-selling plug-in, the gas-electric hybrid Chevy Volt, has fared even worse: The prospect of the forthcoming 2016 redesign, as well as anticipation of the long-range Chevy Bolt down the road, seems to have dampened enthusiasm for the current Volt. Sales are down roughly 50% compared with last year, and Chevy announced it would halt production of the Volt in May with the hopes of clearing out a backlog on dealership lots.

A couple of other GM electric cars are showing obvious signs of weakness as well. Cadillac just cut the price of the ELR plug-in hybrid, while Chevy dropped the price of the Spark EV—essentially bringing the takeaway cost to under $15,000 in some places once incentives are factored in—and has also begun offering leases for as little as $139 per month.

That’s “cheaper than the average family’s monthly phone bill,” as Kelley Blue Book’s Karl Brauer put it in a USA Today story. “Automakers are doing what they can to get these vehicles out of showrooms and into consumers’ hands.”

It’s foolish to say that the price of gas is the only reason more people aren’t buying these cars. Still, the cheap price of gas can only hurt the case for owning such a vehicle.

As for what’s the smartest approach when it comes to deciding which car to go with, it’s unwise to buy into an idea just because it happens to be trendy at the time, just as it’s unwise to make a big-ticket purchase based on the price of gas at any given time. Most car buyers expect to own their vehicles for the long haul, and they should fully expect gas prices to fluctuate over the years. Edmunds.com put it this way: “The best rule of thumb is that the longer you intend to keep a vehicle, the less you should rely on the present price of fuel when determining whether your budget can handle the monthly operating costs.”

TIME Companies

How Google Almost Bought Tesla

Tesla Model S vehicles parked outside a car dealership in Shanghai on March 17, 2015.
Johannes Eisele—AFP/Getty Images Tesla Model S vehicles parked outside a car dealership in Shanghai on March 17, 2015.

Tesla was almost acquired as it approached bankruptcy

Tesla Motors is flying high these days, with a backlog of orders for its Model S electric car and a stock price above $200. But two years ago, the company was reportedly in such dire straits that it was nearly sold to Google.

An excerpt of an upcoming biography of Tesla CEO Elon Musk published by Bloomberg explains that Musk was on the verge of selling his unprofitable electric car company to Google early in 2013. Musk and Google CEO Larry Page are old friends, and Musk was able to work out some very favorable terms for the deal—Tesla would sell for $6 billion, Google would bankroll an extra $5 billion in capital expenditures for factory expansions and Musk would remain at the helm of Tesla for as long as eight years.

According to Bloomberg, the deal would have ensured that Tesla remained an independent brand until it produced an electric car that appealed to the mainstream market.

Spokespeople for Google and Tesla did not immediately respond to a request for comment.

When the two companies were close to inking the deal, Model S sales finally began to take off, and Tesla squeaked out an $11 million profit in the first quarter of 2013. No longer fearing bankruptcy, Musk called off the deal with Google.

The two tech firms may soon be adversaries as Google expands its own ambitions in the world of driverless electric cars.

TIME Autos

How Silicon Valley Suddenly Fell in Love With Cars

Tesla Model S.
Tesla Tesla's battery makes it cleaner than gas-guzzling alternatives—but think about what else it's made of.

The last great remaining American preoccupation tech hasn't yet tackled is the automobile. That's about to change

“The American really loves nothing but his automobile,” Gavin Stevens says in Faulkner’s Intruder in the Dust. “Because the automobile has become our national sex symbol.” Given that longtime infatuation, you’d think Silicon Valley’s tech companies would have been eager to get into the auto industry before now. Instead, many are surprised that it’s happening at all.

Ever since the personal computer became mainstream, Silicon Valley has been inventing or reinventing new gadgets: the music player, the phone, the computer itself, first as a portable, now as a tablet. Amazon remade the shopping mall and put it on a screen. Netflix and YouTube subverted the TV set, and now Google’s Nest is going after other household appliances. This year, Apple is reworking the wristwatch, casting tech as jewelry.

The last great remaining American preoccupation that tech hasn’t yet tackled is the automobile. Much of this has to do with logistics–selling phones or music players is child’s play next to the expensive, highly regulated business of manufacturing cars–but there’s also a historical mindset at work. Detroit, with its combustion engines and metallic gears, was the epitome of an analog era that Silicon Valley displaced. The car was an anachronism, however beloved.

No longer. Google has been working on self-driving cars for a number of years. Uber has started looking into them as well. Now, according to the ever-churning Apple rumor mill, the Cupertino giant is working on a stealth car project. For tech companies, the automobile has gone from a super-sized docket to park a smartphone while you drive to a gadget that can be reimagined from the ground up with digital technology.

The sudden shift is happening for a few reasons. First, with PCs, tablets and smartphone markets close to saturation, tech giants are looking for new markets to invade with their innovations. Second, the car market seems ripe for a makeover. American automakers like GM may be reviving post-financial crisis, but the U.S. looks to have reached “peak driving:” Annual miles driven per person is down 9% from 1995, and even more among young drivers.

But the biggest single reason tech suddenly loves the car is Tesla. The company founded by Elon Musk in 2003 to make electric cars has become much more: It has fused the automaker with the tech company, and not only built a cultural bridge between Detroit and Silicon Valley but showed that both were converging toward each other.

Tesla was a wake-up call to automakers that had grown complacent about innovation. It showed that technology was a powerful way to differentiate a particular model from the herd, and that if automakers wanted to reach out to younger consumers, they should embrace the kinds of technology they enjoy. Soon, you began to hear auto executives talk about “smarter cars” and roadways as “connected networks” structured like the Internet (15 years ago, that simile ran mostly in the opposite direction).

Read more: How Apple Is Invading Our Bodies

Google CEO Larry Page has said his interest in driverless cars stems from the inefficiency of roadways, which not only cost lives but waste worker time in traffic jams. (It doesn’t hurt, either, that driverless cars could offer commuters more opportunity to look at Google ads.) Uber is also researching self-driving cars to lower costs for its passenger service as well as a planned delivery service.

The loudest buzz surrounds Project Titan, a rumored Apple car that in reality could be pretty much anything: an electric vehicle, a leased minivan, a driverless car, a ploy to acquire Tesla, a bluff to pressure automakers into putting its CarPlay software in their vehicles, or a clever Apple hoax trolling Apple rumor-mongers. Wall Street analysts, though, think an Apple car is the likely bet, and if so the marriage of Detroit and Silicon Valley is a matter of time.

If nothing else, Apple’s rumored entry into automobiles seems to have turned up the heat. Last week, Musk said Tesla would start offering “autopilot” technology in its cars this summer. Google said its more ambitious driverless-car system would be ready for broad consumption in five years.

But the dark-horse in this new race may be Samsung, which according to Thomson Reuters has “has the largest and broadest collection of patents in the automotive field including a very large interest in batteries and fuel cells for next generation vehicles.” If automobile technology boils down to a patent race, Samsung may end up having an edge. Samsung even has some history in car manufacturing.

The end goal of these tech aspirations in the automotive industry may well be partnerships with established manufacturers. After all, what company is dying to break into a low-margin heavy industry? Many auto executives scoff at the idea that jumping from smartphones to cars is good idea. They may be surprised. Cars are just another form of technology, albeit one in need of an upgrade. And who is better positioned to upgrade them Apple or Google?

TIME Innovation

Tesla’s New Software Will Help Drivers Avoid Running Out of Juice

Preview Day Two At The 2014 Paris Motor Show
Simon Dawson—Bloomberg / Getty Images The driver's electronic dashboard sits illuminated inside a Tesla Model S automobile, produced by Tesla Motors Inc., at the Paris Motor Show on the final preview day in Paris, France, on Friday, Oct. 3, 2014.

The 'range assurance app' will keep track of cars' distance from charging stations

Tesla CEO Elon Musk unveiled a new app Thursday for the company’s all-electric cars that will help drivers keep their vehicles charged.

The new range assurance software will use maps and sensors to warn drivers before their car gets too far from a charging station to arrive using its current energy reserves. Every 30 seconds, the car will check energy usage against the amount of energy needed to get to the nearest charging station.

“This makes it effectively impossible for the driver of the model S to run out of range unintentionally,” said Musk at a press conference. “The car will actually double check. You’ll have to say, ‘Yes, I’m sure,’ twice, before you actually run out of range.”

The app will be released as an “over-the-air” software update for all Tesla Model S vehicles. The update will also include a Trip Planner that will guide drivers to the most convenient charging stations, factoring in a range of energy-sapping variables, including wind speed and mountainous passes.

This new update comes after Tesla recently improved the acceleration time on the high-end Tesla Model S P85D through a similar software update. Musk said Thursday that Tesla will continue to improve its cars’ sensitivity to their surrounding environment through quarterly software updates.

“We’re kind of waking up the car, if you will, and increasing its capabilities over time,” he said.

Tesla shares slipped by roughly 1.6% following the announcement, deflating a brief speculative surge of buying in the days leading up to the press conference.

 

TIME Innovation

Five Best Ideas of the Day: March 12

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Protecting whistleblowers protects national security.

By Mike German at the Brennan Center for Justice

2. Could we treat pain by switching off the region of the brain controlling that feeling?

By the University of Oxford

3. Small businesses are booming in China, and it might save their economy.

By Steven Butler and Ben Halder in Ozy

4. Not so fast: Apps using Apple’s new health technology could require FDA approval. That doesn’t come quick.

By Jonathan M. Gitlin in Ars Technica

5. We might feel better about driving electric cars, but they’re still not good for the environment.

By Bobby Magill in Quartz

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Autos

For Electric Cars, High Gas Prices Can’t Come Back Quickly Enough

2015 NIssan LEAF
Nissan—Wieck 2015 NIssan LEAF

Gas prices have rebounded a bit, but they remain low enough to kill the cost-saving argument for buying a plug-in electric car like the Nissan Leaf or Chevy Volt.

Thanks to the dramatic decline in prices at the pump, the average American household is expected to spend $750 less on gas in 2015 than it did last year. We’ve already seen how some of this “saved” money is being spent, what with restaurants, casinos, hotels, and recreational activities all seeing a bump in business lately. Cheap gas seems to have affected big-ticket purchase decisions as well, exhibited most obviously by the spike in SUV and luxury car sales.

It’s an entirely different story, however, when it comes to the impact of cheap gas on electric cars such as the Nissan Leaf. Nissan just released its February numbers, and sales for the brand were up 1.1% compared with last year. Sales of the all-electric Leaf, however, were down 16%. That follows on the heels of a 15% decrease in January, the first such sales decline for the Leaf in two years. Overall Leaf sales dropped from 2,677 for the first two months of 2014 to 2,268 this year.

The recent sales performance of the Chevrolet Volt, the gas-electric pioneer that has been vying with the Leaf for the title of most popular plug-in among buyers, has been even worse. January was the worst month for the Volt since August 2011, with only 592 units sold, a decrease of 41% compared with January 2014. According to General Motors data, 693 Volts sold in February 2015, a drop of 43% compared with 1,210 the year before.

Surely, the prospect of new Chevy plug-in models has hurt Volt sales lately. The all-electric Chevy Bolt, expected to cost $30,000 and get 200 miles on a single charge, is planned to hit the market in 2017, while the 2016 Volt should be available for purchase during the second half of 2015. Many would-be Volt buyers are simply waiting for the newer model, which can be driven 50 miles on electric power, up from 38 miles for the current one.

That explains some—but not all—of the decline in Volt sales. Certainly, cheap gas prices have done damage to sales of the Volt as well as the Leaf, other plug-in vehicles, and even hybrids like the Toyota Prius to boot. After all, one of the big reasons to buy an electrified vehicle is that powering it is cheaper than filling up at the pump. Consequently, when the price of gas plummets, like it did month after month for nearly half a year recently, a prime argument for going the plug-in route is weakened.

It isn’t just new plug-in models that have taken a beating thanks to a combination of cheaper gas prices and emerging new tech that makes older models seem outdated in a hurry. According to the Wall Street Journal, the resale value of used electric cars has absolutely tanked:

In December and January, for instance, the average selling price of a 2012 Nissan Leaf at auction was about $10,000, nearly a quarter of the car’s original list price and down $4,700 from a year earlier, according to NADA’s guide. Three-year-old Volts, a plug-in car with a backup gasoline motor, were selling for an average $13,000 at auction in January, down from about $40,000 excluding the federal tax credit.

Nissan is coming off of the best-ever year for any plug-in, with Leaf sales in the U.S. topping 30,000 in 2014. The way things have started in 2015, it will be difficult for the automaker to beat last year, though Nissan has blamed bad weather for the Leaf’s recent struggles, and it expects a strong rebound in the spring. Meanwhile, at the start of 2014, Nissan CEO Carlos Ghosn said he anticipated selling an average of 3,000 Leafs monthly that year, and 4,000 Leaf purchases monthly sometime in the near future.

Recent sales notwithstanding, Nissan isn’t giving up on electric cars anytime soon. Neither are many other automakers. At the auto show in Geneva this week, BMW, Volkswagen, and Fiat Chrysler were among the car companies showing off high-tech battery-powered vehicles that demonstrate their commitment to electrified cars.

At some point, rising gas prices will likely steer more interest back to alternative-fuel cars too. But that hasn’t happened yet. “Gas prices inched back up this month, but it didn’t appear to have much impact on shoppers’ choices,” Edmunds.com senior analyst Jessica Caldwell said in a report focused on February sales. “We’re still seeing a strong market for trucks and SUVs—especially compact crossover SUVs, which continue to ride an impressive wave of popularity.”

At least if the Leaf and Volt are struggling, Nissan and GM can take solace in the fact that some of their larger, less fuel-efficient and less environmentally friendly siblings are faring quite well during this winter of cheap gas, cold temperatures, and lots of snow. Two Nissan SUVs, the Pathfinder and Rogue, had record sales months in February, while GM pickup sales were up 37% for the month.

 

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