Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Rae Cook/Axios

Most drivers of electric cars are wealthy, and most electric cars are luxury.

Why it matters: To effectively combat climate change, the opposite needs to happen: electric cars need to become affordable and broadly appealing so the masses can and want to buy them. Only with mass adoption will heat-trapping emissions steeply decline in America’s most polluting sector.

The big picture: The stereotype of rich Californians driving their Teslas isn’t a bad thing—at least not yet. It’s part of the cycle of new technology costs. Wealthy drivers are helping drive down the cost of new electric-car technologies by being able and willing (and subsidized by governments) to be early adopters of these vehicles.

  • "Now we’re at a point where the technology is there, we do need to start thinking about how we make sure this transition benefits everyone,” said Scott Hardman, a professional researcher at Institute of Transportation Studies at University of California, Davis.
  • “But I don’t think things are going in the right direction,” he added, before sharing the following statistical snapshots.

By the numbers: Of the 11 newest battery electric vehicles introduced in the U.S. between 2018 and 2020, eight are luxury vehicles.

  • The average starting price of an electric car has increased over the past eight years, despite battery costs plummeting. The average price in 2012 was about $39,000. Last year, it was $52,000. (The cost of gas-powered cars is generally trending up too.)
  • The average salary of an electric-car owner in California is $174,000, more than double the national average.
  • Teslas, which make up more than 70% of the electric-car market, have even wealthier drivers, with average incomes of more than $300,000, Hardman’s research has found. (Multiple requests for comment to Tesla were not returned.)

Driving the news: The Biden administration is proposing to invest $174 billion into electric vehicles and related charging equipment, including giving consumers point-of-sale rebates to buy American-made electric vehicles.

  • This is key to attract lower-income buyers. Although the lifetime cost of owning an electric car can be lower than its gasoline counterpart, the sticker price remains higher, dissuading lower-income drivers, Hardman says.
  • The existing federal tax credit for electric cars, which President Biden is also proposing to expand, has generally benefited wealthier people who have more tax liability and can afford to wait to get their money back.

What they’re saying: The White House appears to be aware of this dynamic. Biden is proposing investments in a “way that is user-friendly and boosts the accessibility of incentives for the broadest spectrum of Americans,” Ali Zaidi, deputy climate-change adviser at the White House, said in a recent interview.

Catch up fast: Last year, electric cars made up 2.2% of the U.S. auto market (compared to more than 4% globally), per BloombergNEF.

  • New laws, automaker competition and falling battery prices will drive those percentages up significantly in the coming years, according to BloombergNEF and most other models.
  • Automakers who make up nearly a third of the U.S. market have pledged to manufacture all-electric vehicles in the coming decades, consulting firm Rhodium Group found.

The intrigue: Cost is actually growing in importance as a reason people decide not to buy an electric car, says Felicity Latcham, associate partner at consulting firm OC&C, which conducts regular surveys on this topic.

  • Cheaper electric cars are coming as automakers compete to own this market.
  • Hyundai just launched new advertising campaigns touting new hybrid and fully electric SUVs and sedans. Offerings like this will eventually broaden the market for used electric cars, which is especially important for lower income drivers.

Yes, but: Roadblocks remain. Ask California, America’s leader in electric cars. Its goal is to get five million electric vehicles on the road by 2030 (today it has fewer than one million).

  • Its 11-year-old Clean Vehicle Rebate Project has been widely successful but ran out of money last month. More than 60% of all electric-vehicle owners in California have used this program.
  • In 2016, the legislature altered the program so lower-income people can receive more incentives and wealthier people are unable to participate in the program.
  • Several other states have since adopted programs like California’s, though most don’t have income limits, potentially exacerbating inequality.
  • The program just exhausted funding partly because of its popularity and because it didn’t receive any new funds last year.
  • At a recent public hearing on the program, backers bemoaned the money running out and the fact that its annual funding doesn’t allow for adequate planning. Whether it gets more money will be among the budget decisions made later this month and in June.

“When you take away the incentives, I just think you could really harm those that are on the fence,” said Eileen Tutt, executive director of the California Electric Transportation Coalition, a group of companies supporting electric cars. “If we eliminate this program now, that could ripple across the U.S. and really harm the market.”

The bottom line: “Let’s be real. We’re not even close to meeting our goals,” Tutt said of California’s aspirations. “We’ve got to get to a new set of consumers.”

Editor's note: Amy Harder is vice president of publishing at Breakthrough Energy, a network of investment vehicles, philanthropic programs, policy advocacy, and other activities committed to scaling the technologies needed to reach net-zero emissions by 2050. She is launching a new journalism initiative there. Previously full time at Axios, Amy is now writing her Harder Line column monthly as an outside contributor.

Go deeper

Naomi Osaka eliminated from Olympic tennis tournament in Tokyo

Czech 42nd-ranked Marketa Vondrousova (L) shakes hands with Japan's Naomi Osaka after their Tokyo 2020 Olympic Games women's singles third round tennis match at the Ariake Tennis Park in Tokyo on Tuesday. Photo: Giuseppe Cacace/AFP via Getty Images

Naomi Osaka was eliminated from the Olympics after losing her Tokyo tennis tournament match 6-1, 6-4 in the third round to Czech Marketa Vondrousova on Tuesday.

Of note: Japan's Osaka is the women's world No. 2, while is Vondrousova ranked No.42.

Drought pushes 2 major U.S. lakes to historic lows

Kayakers at a boat launch ramp Page, Arizona, on July 3, which was made unusable by record low water levels at Lake Powell as the drought continues to worsen near. Photo: David McNew/Getty Images

Two significant U.S. lakes, one of which is a major reservoir, are experiencing historic lows amid a drought that scientists have linked to climate change.

What's happening: Lake Powell, the second largest reservoir in the U.S., has fallen 3,554 feet in elevation, leaving the crucial reservoir on the Colorado River, at 33% capacity — the lowest since it was filled over half a century ago, new U.S. Bureau of Reclamation data shows.

Updated 2 hours ago - World

North and South Korea restart hotline and pledge to improve ties

South Korean President Moon Jae-in and North Korean leader Kim Jong Un in Pyongyang, North Korea, in 2018. Photo: Pyeongyang Press Corps/Pool/Getty Images

North and South Korea's leaders have pledged to improve relations and resume previously suspended communication channels between the two countries.

Why it matters: The resumption of the hotline on Tuesday comes despite stalled negotiations between Washington and Pyongyang on the denuclearization of North Korea, which broke down after a second summit between then-President Trump and North Korean leader Kim Jong-un ended without a deal in 2019.