| Thanks for reading Hyperdrive, Bloomberg's newsletter on the future of the auto world. Getting Charged to Charge | California is the undisputed champion of electric vehicle in the US, with around one in four new cars sold powered by a battery last year, compared with around one in 10 nationwide. California EV sales in 2024 were very similar to those of 2023, though — just 2,091 more EVs were purchased last year, according to the California Energy Commission. One of the reasons for this slowdown in growth that I cited in my recent talk at BNEF Summit San Francisco was rising electricity costs. Charging an EV at home at California's average residential electricity rate is 90% as expensive as fueling an efficient gasoline car, making it less attractive for those considering switching to electric. And California isn't alone. Residential electricity is 116% the cost of gasoline in Massachusetts and 92% in New York. Washington and Florida rank as the cheapest locations for EV driving, at 38% and 54%, which could drive future EV sales in the states. This analysis compares EV driving against an efficient gasoline car like a Toyota Camry, as opposed to the gas-guzzling and ever-popular Ford F-150 pickups that are much less efficient. Many drivers in the US would save on the costs of powering their vehicles by switching to electric. It is somewhat surprising to find these challenges in California, both due to the vast number of EV sales and the high cost of gasoline, which supersedes every state in the US. The issue is that electricity costs have been rising fast. The average residential electricity rate in California has risen 78% from January 2019 to January 2025, reaching 33 cents per kilowatt-hour from just 18 cents per kilowatt-hour. Many EV drivers may not be as concerned by the average residential rate, as they can take advantage of cheap off-peak EV-specific electricity rates. The trouble is, in the service areas of the two largest utilities in California — PG&E and SCE — even off-peak electricity rates, which were much below the state average electricity tariff in 2019, have risen fast and are now as high as the state average electricity cost, which has been edging closer to gasoline. Public fast charging costs also have been rising and are already higher than gasoline. This gets rid of the obvious incentive for those looking at saving money by switching to an EV. It does put the ball in the consumer's court, though — they can get home solar and battery storage to lower costs. With the costs of these technologies continuing to fall and electricity time-of-use rates getting spikier between peak and off-peak, this looks increasingly economical. The peak rate on PG&E's EV tariff ($0.62/kWh) is about twice that of the off-peak rate ($0.30/kWh). The utility is also trailing a dynamic hourly pricing tariff as it looks to manage volatile supply and demand. Some locations are much cheaper than others. Average residential electricity costs were 38% to 70% of gasoline costs in states such as Texas, Colorado and Washington. Off-peak time-of-use rates can also offer further savings. Tesla, for instance, offered unlimited off-peak home charging for $5 per month in Texas for drivers that signed up to its retail plan before Dec. 31 of last year. The logic to low electricity costs can vary by state, with no perfect correlation to generation types. For example, over 60% of Washington state's net generation was from hydro-electric sources in 2023, while in Florida, around 75% of the electricity came from natural gas in 2022. Consumers tend to care more about costs than how their electricity is generated. With low costs in some states and manufacturers like General Motors bringing more EVs to market, such as the Cadillac Vistiq and Optiq and the return of the Chevy Bolt late this year, there could be more consumers who are keen to switch. California may hold the EV sales crown today, but don't be surprised if a state like Florida makes more strides this year. This in spite of Republicans' anti-EV stance and in part due to the savings drivers can make on electricity over gasoline.  Workers at the Linamar EV battery-case manufacturing facility in Muscle Shoals, Alabama. Photographer: Liam Kennedy/Bloomberg President Donald Trump exempted Mexican and Canadian goods covered by the North American trade agreement known as USMCA from his 25% tariffs, offering major reprieves to the US's two largest trading partners. Trump signed orders Thursday paring back the levies, which are related to illegal immigration and fentanyl trafficking, until April 2. That's the date when the president is expected to start unveiling plans for so-called reciprocal duties on nations around the world as well as sector-specific duties. Read More: Tariffs will cost carmakers billions, Linamar warns. Car owners are missing their monthly payments at the highest rate in more than 30 years. In January, the share of subprime auto borrowers at least 60 days past due on their loans rose to 6.56%, the most since the data collection began in 1994, according to Fitch Ratings. A slowing economy and the ongoing impacts of inflation have made it harder for many consumers to stay current on their bills. Auto loans have been a particular pain point, with higher car prices and elevated borrowing costs driving a surge in repossessions. | 
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