⚡ NYC Wants Majority Of TLC Vehicles To Be EVs By 2030, But It's A 2024 Mandate
In his State of the City (SOTC) speech, Mayor Adams announced that NYC TLC drivers, who work with Uber & Lyft, must have EVs by 2030. While goal is inspiring, it ignores auto loan dynamics
A few day ago, during his State of the City (SOTC) address, NYC Mayor Eric Adams announced:
“We are announcing today, that Uber and Lyft will be required to have a zero-emissions fleet by 2030. That's zero emissions for over 100,000 vehicles in our streets.”
- NYC Mayor Eric Adams
In other words, a 2030 EV mandate for a large majority of TLC-plated vehicles, something which we thought might be coming and have written about. In that piece and other articles on the topic we focused, as many often do when EVs are discussed, about the challenges of EV adoption, especially in NYC. We still think those challenges remain, but they also provide nice business opportunities for current and aspiring entrepreneurs.
For this piece, let’s set aside common debate points. Instead let’s focus on a topic few think about, but is critical in implementing EV mandate goals: AUTO LOANS 🏦🚕.
BEFORE WE BEGIN, we (AutoMarketplace) are a big believer in an electric vehicle (EV) future. In fact, our (we were previously known as TLCMKT) first YouTube video was reviewing a Chevy Bolt being used in the NYC TLC market. Our fleet division even tried to TLC plate a Tesla back in 2018, when it wasn’t that common. We spoke to several Tesla fleet sales representatives and visited and spoke at length to employees at the sole NYC Tesla service center in Red Hook (Brooklyn).
We also realize that Tesla is no longer the only or primary mass market EV manufacturer. Almost all large OEMs and many new startups, such as Rivian and Lucid, are going to start offering more models in the coming years. It’s an exciting time and a new frontier that we all should look forward to⚡.
However, as with any media or trade publication, we try to present a more technical or “matter of fact” viewpoint. Perhaps you end up disagreeing, perhaps you agree or even fall into a gray area - the goal here is to promote thoughtful contemplation and not solve for an opinion or conclusion backwards. Promoting EV adoption has become an extremely political topic, when the worthy discussions are usually much more technical in nature.
A 2030 Mandate, Is A 2024 Mandate
If you assume (in our experience we have observed this too) the typical NYC TLC driver agrees to between a 5 year (60 months) and 7 year (84 months) auto loan, then a 2030 EV Mandate is effectively a 2024 mandate. What do we mean by this? We explain below.
Firstly, negative equity auto loans, or when the value of vehicle is less than the amount of loan outstanding, are increasing. Therefore, to simply get out of one vehicle to switch to another vehicle is an increasingly tricky proposition. This is not even layering on the potentially devastating impacts EV mandates and adoption might have on existing depreciation math of ICE or hybrid vehicles 🤔. Many TLC drivers (& consumers in general) will now likely have negative equity auto loans for the vast majority of their vehicle’s loan term.
Simply put, if a driver buys a new or used vehicle in 2024 (and beyond) with a six year auto loan (close to the current average), their transition to an EV, to satisfy a mandate, will be extremely complex due to prior financial commitments and vehicle depreciation math.
In other words, calling for a 2030 EV mandate is essentially asking many NYC TLC drivers to:
Start buying EVs immediately, even though the average price of an EV is above $55,000 and the used EV market has limited choice. Even with tax credits, EVs still run expensive for many TLC drivers.
Not buy any gasoline (ICE) or hybrid vehicles starting in 2024.
Enter into much shorter than (average) vehicle loan arrangements, which would result in higher than normal monthly vehicle payments.
Have Uber & Lyft pay for vehicles and essentially force an employment-like arrangement on most NYC TLC drivers who generally wish to operate as independent operators with regulatory protections (i.e., minimum pay, benefits)
Anyway you really game this out, a 2030 EV-only mandate essentially starts impacting NYC TLC drivers, fleets, bases and other companies financial plans IMMEDIATELY. To not clearly articulate who is paying, how they are paying, how the plan is financially viable and how this comes at “no cost to drivers” is confusing.
City politicians and regulators must understand they are accountable to the taxpayer base and hardworking New Yorkers. Nice headlines, perhaps to win points in the political sphere, can leave many hardworking NYC drivers, fleets and companies in financial distress.
As a business-minded trade publication, we undoubtedly have our biases. However, we do respect regulators and we respect well meaning electrification goals. To announce a 2030 EV mandate like this, causes more confusion and anxiety.
EV Is The Future, But It’s Not So Simple
While the above analysis sounds like we are anti-EV, we are not. We believe EVs should and will come to dominate the NYC TLC industry over time. However, there are certain practical financial and operational considerations that NYC drivers, fleets, bases and other companies have to uniquely weigh before deciding to make the switch to EVs.
Today, we think it’s too early for most TLC drivers and fleets to adopt EVs, but that opinion could change as new (more affordable) vehicles, technology and infrastructure become available. Regulators and policymakers must understand this before forcing adoption.
To conclude, look no further to EV pioneer & Tesla CEO Elon Musk’s own guidance as to how long an EV transition might take. While, it might not be politically popular to take this stance, our interest is to be objective and report “on the ground” realities. It’s important for all stakeholders to work together and have tough, but fruitful discussions before any definitive EV mandate is enforced .
“It will take another 20 years for cars to be fully electric. It is like with phones, you cannot replace them all at once” - Elon Musk
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
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