There are challenges that a green mobility bank could set out to tackle.
1. Upfront costs: EVs typically have higher upfront costs than comparable internal combustion vehicles, with sticker prices for several thousand dollars more. However, when accounting for fuel cost savings and reduced operational costs, the total cost of ownership of an electric vehicle is often lower than for an ICE vehicle — by anywhere from $6,000 to $10,000 over the lifetime of the vehicle, according to some estimates.
We see the same problem in the energy efficiency world: Buying a more efficient heating, ventilating and air conditioning system, for example, has high upfront costs but over the long run saves money through lower energy bills. Financing options supported by a green mobility bank can help mitigate sticker shock.
2. Tax incentives: Existing tax incentives for EVs are out of reach for many people. All-electric and hybrid vehicles are eligible for federal income tax credits of up to $7,500, but those provide no financial assistance for people who have lower tax liability. Although a green mobility bank can't provide tax credits, it can connect ordinary people with affordable financing plans, lowering the cost of switching to an EV in a similar manner to the federal tax credits.
3. Home chargers: Many homes do not have the right electrical setup to install chargers. A home charger may require rewiring for the right voltage, which can be expensive. Even if an EV comes with a free charger or low-cost charging installation, the owner's home may have outdated electrical wiring.
Access to low-interest financing or grants to pay for these upgrades can help get consumers over this hump.
4. Range anxiety: If range anxiety is going to be solved, fast chargers need to be more commonplace so people are not afraid of getting stuck. But fast chargers are expensive, and the private sector often won't invest in charging stations as long as utilization rates remain low.
Utility rebates have helped hundreds of charging stations get built, and those programs should continue, but a green mobility bank would help fill the gap until utilization rates are high enough to unleash the private sector to build much more charging infrastructure.
There has been enormous enthusiasm over EVs recently. Beyond the Biden administration's multibillion-dollar proposals, Ford and GM have made significant commitments to shift more and more toward EVs. All of this might make electric mobility seem inevitable. But big policy actions like a green mobility bank can make the transition toward EVs easier, faster and more open and affordable for all. We can take on the chicken and the egg at the same time.