Newly released electric vehicle sales data has sparked a mix of reactions in Colorado. While policymakers are celebrating, the reality beneath the surface is more intricate. Let's delve deeper into this evolving situation.

Unraveling Colorado's Electric Vehicle Market Dynamics

Initial Sales Success and Political Pride

According to a recent report from the Northeast States for Coordinated Air Use Management, electric vehicles made a significant impact in Colorado's third quarter of 2024. They accounted for 25.3 percent of all new cars sold, leaving California, the long-time national leader, in second place with 24.3 percent. Governor Polis hailed this as a sign of Coloradoans' preference for electric vehicles, stating, "Coloradans are purchasing electric vehicles at a higher rate than any other state because they are affordable, quiet, and a great ride." The Colorado Energy Office's Executive Director, Will Toor, added that their efforts in charging infrastructure and incentives were paying off.However, it's important to view this single quarter of strong sales in context. As the state's electric vehicle dashboard shows, EVs still represent just 3.25 percent of all light-duty vehicles on Colorado roads, far from the "100 percent by 2050" goal. In the nearer term, the Governor's Greenhouse Gas Roadmap aims for 940,000 electric vehicles by 2030, but currently, there are just over 156,000.

The Impact on Climate Goals

While the report's findings may be good for political public relations, they don't tell the whole story. Colorado briefly outperforming California doesn't significantly move the needle on the state's climate goals. In fact, it belies the unjust nature of the policy support that led to this success. Context is crucial here.Even in terms of new sales share, last quarter's high of 25 percent still lags behind the regulatory goals set by the Governor. His administration's air quality rules aim to eventually require 82 percent of new light-duty vehicles sold in Colorado to be electric. But it's not clear if EVs have won over enough Coloradans' hearts and minds to meet these goals.

The Role of Subsidies

Rather than a sudden shift in consumer preference, the report suggests that a specific subset of the population took advantage of the generous subsidies available. In mid-2024, it was the prime time to purchase an electric vehicle and capture various tax incentives worth up to $26,500. The state government introduced one of the most generous electric vehicle tax credits in mid-2023 and even boosted it by 50 percent in 2024. But this initial credit is set to decrease by about 30 percent in 2025.Climate advocates may see the temporary sales boost as evidence of the subsidies' effectiveness, but most residents have concerns. There are philosophical issues with using public money to support certain businesses and the distortion it causes to the Taxpayer's Bill of Rights. EV subsidies also funnel money to wealthier residents, as studies have shown. At the federal level, EV subsidies are highly regressive, with the top 20 percent of earners capturing 80 percent of available subsidies.In Colorado, being a wealthier state than the national average, it's likely that electric vehicles are going to more affluent households. The state's EV dashboard also highlights the economic disparity among current EV owners. Disproportionately Impacted Communities, which make up a significant portion of the population, currently have a lower share of registered EVs.National surveys indicate that most current EV owners use them to supplement their gas-powered vehicles. An Experian consumer research report found that 89 percent of households with an electric vehicle had at least two vehicles, and 81 percent had a gas-powered car as a second vehicle.So, in the end, the Governor's announcement is a celebration of a specific group of wealthy Coloradans buying secondary vehicles with taxpayer-funded support. It's a reality that doesn't quite live up to the initial hype.