In summary

An Assembly bill would establish a framework for “Electric Vehicle Memberships” that would provide a more affordable alternative to buying an EV.

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By Rosemary Shahan and

Rosemary Shahan is president of Consumers for Auto Reliability and Safety,

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Bill Magavern, Special to CalMatters

Bill Magavern is policy director for Coalition for Clean Air,

Consumer and environmental organizations are joining forces with electric vehicle manufacturers to support urgently needed legislation to allow California consumers to access zero-emission electric vehicles through innovative, affordable, short-term, renewable memberships.

Assemblymember Al Muratsuchi, Democrat from Torrence, and Sen. Ben Allen, Democrat from Santa Monica, are championing Assembly Bill 326, which would establish a framework for “Electric Vehicle Memberships” and provide easy access to EVs by allowing manufacturers to offer short-term memberships to consumers. The memberships will include registration, maintenance, charging and an insurance option, and provide a more affordable alternative to buying, leasing, or renting an electric vehicle – with no long-term financial commitment. 

This legislation will also help overcome the car dealers’ near-total monopoly on sales of new vehicles – with the sole exception of Tesla – and provide California consumers, businesses and government agencies greater freedom of choice for accessing zero-emissions vehicles while also helping to ensure that this new, innovative EV membership model is regulated appropriately. 

The EV industry has already created more than 275,000 jobs in California, and AB 326 will help preserve and grow jobs in that industry. 

Furthermore, AB 326 will help Californians who struggle to afford a safer, more environmentally-friendly car and are faced only with options that include a high-interest loan. Particularly during the COVID-19 pandemic, with the ensuing economic uncertainty, business closures, job losses and unprecedented unemployment, many consumers are understandably risk-averse and leery of entering into long-term auto loans or leases. 

Americans now carry more than $1.2 trillion in auto loan debt, an increase of over 75% since 2009. AB 326 opens up opportunities for more lower-income and disadvantaged consumers to break free from high-interest auto loans that are too often predatory or discriminatory, based on race. 

In a recent nationwide study conducted by Volvo Car and The Harris Poll, consumers cited the upfront cost of EVs as a leading barrier to entry. AB 326 helps remove that barrier by making it more affordable for more Californians to drive EVs through a month-to-month membership without expensive long-term loans or leases.

In addition to alleviating affordability woes, AB 326 will help remove the other prominent barrier keeping many would-be EV drivers from considering an EV – “range anxiety” – a consumer’s concern over whether the range they can drive between charges will fit their lifestyle. 

AB 326 will allow Californians to have an “extended test drive” of an electric vehicle with no long-term commitment and no money down. We believe, as shown by the Volvo Car and The Harris Poll study, that once a consumer tries an EV, range anxiety tends to dissipate within a few months.  

AB 326 is proposed at a critical time when EV tax credits are expiring and will help clean up our air without additional cost to the state. 

For all of these reasons, a broad coalition of EV manufacturers, consumer groups and environmental organizations are working together to support the passage of AB 326. The new car dealers and traditional auto manufacturers are the only opponents of AB 326. Unfortunately, the car dealers seek to hold onto their near-total monopoly over new car sales and are notoriously resistant to competition. But Californians suffering from pollution cannot afford to wait until the dealers and traditional manufacturers get over their resistance to progress in making EVs more accessible.

AB 326 is the right thing to do – for the air we breathe and for creating more jobs in California during a pandemic and economic meltdown – and we need this pro-consumer, pro-safety, pro-environment legislation now more than ever. 

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