The Brief

California lawmakers published a bill late Tuesday that seeks to put new guardrails on Measure ULA, the city of Los Angeles real estate tax that has become a topic of fierce debate among economists in recent months.

To address concerns the tax is driving developers away at a time when the city needs to boost housing production significantly, the bill would slash tax rates for some newly built apartment buildings.

Since April 2023, the voter-approved measure has levied a tax on the sale of properties worth $5 million or more. The city uses the revenue to fund various housing affordability efforts such as rent relief programs, eviction defense and construction of income-restricted apartments.

But the city’s so-called “mansion tax” isn’t limited to celebrity estates in the Hollywood Hills. It also applies to multi-family housing and other commercial properties. Developers can face large tax bills after they build and sell new apartment complexes and office buildings.

Several recent economic papers concluded the tax is causing a steep decline in housing development activity across the city. One UCLA study estimated the city would have more affordable housing units on balance if the tax did not apply to new apartment buildings.

“It's really concerning,” said Mott Smith, a co-author of one of the papers and an adjunct professor of real estate development at the USC Price School.

“The units that we need to support all the households coming into the city — or that have to move and deal with their lives — those aren't happening,” he said. “And when we squeeze the housing supply, the poor feel it the most.”

Mott Smith stands in front of the currently vacant project site for Chavez Gardens, a Boyle Heights affordable housing project that aims to build 110 units of low-income housing partially funded by the city's so-called "mansion tax."

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David Wagner/LAist

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With days left in this year’s legislative session, state lawmakers are now seeking to address some of those concerns. Their new bill will need to be approved by the end of Friday in order to make any changes to the city’s measure before the end of the session.

What changes could be coming for LA’s ‘mansion tax’?

Under Measure ULA, properties selling for more than $5 million have faced a 4% tax, and properties selling for more than $10 million have faced a 5.5% tax.

The new bill, co-authored by Democratic state senators Lena Gonzalez and Tina McKinnor, would keep those rates in place for high-end, single-family homes, except those rebuilt after a natural disaster in the previous five years. But the bill would lower the tax for some commercial properties built within the last 15 years to 1.5%.

This carve-out would apply to “property that was issued its first certificate of occupancy within the previous 15 years.”

The bill also aims to loosen some of the strict financing rules built into the city’s measure. Under Measure ULA, financially distressed apartment buildings that received city funding could only be sold to certain buyers, such as nonprofit organizations or community land trusts. The measure also restricts changes to rents and income limits in buildings that are losing money.

Critics say other lenders, such as major banks, will be less likely to invest in ULA projects unless they receive more assurance about avoiding risks in buildings that hit financial roadblocks. The new bill would let those restrictions come up for negotiation if a building is facing default.

The potential reforms are being debated in Sacramento just as the city is starting to accept applications from developers for $387 million in ULA funds. The city’s housing department released the “notice of funding availability” last Friday.

It's the largest in the city’s history.

Why are these changes being considered now?

LAist reached out to L.A. Mayor Karen Bass and Councilmember Nithya Raman, chair of the L.A. City Council’s housing committee, to ask if they supported legislative efforts to alter Measure ULA. We did not immediately receive a response.

Lawmakers are feeling pressure to alter the measure because the Howard Jarvis Taxpayers Association, a fierce opponent of tax increases, is now collecting signatures for a potential 2026 state ballot measure to kill Measure ULA and other local transfer taxes of more than 0.11%.

Howard Jarvis president Jon Coupal said this week that the measure’s goal would be to roll back “transfer taxes” like Measure ULA to levels pre-dating California’s landmark 1978 law restricting property taxes, Proposition 13. It would also set a higher bar for voter approval of new taxes similar to Measure ULA.

“This constitutional amendment will restore Prop. 13’s requirement that all local special taxes, those that dedicate the revenue to a specific purpose, must be approved by two-thirds of voters to pass,” Coupal said in a post on the association’s website. “No exceptions. No loopholes.”

Measure ULA received nearly 58% support from L.A. voters, enough to pass it as a citizen-led initiative. Under recent California Supreme Court rulings, the measure would have faced a higher, two-thirds threshold for passage if it had been placed on the ballot by city officials.

Some say critiques are overblown 

Measure ULA has so far collected about $830 million, far below supporters’ initial estimates of up to $1.1 billion per year.

Despite the lower-than-projected revenues, proponents say the money already is helping to keep thousands of Angelenos housed and off the streets. More than $30 million in a ULA-funded rent relief program has helped clear rent debt for about 4,300 tenant households.

The funding also is paying for free legal defense to low-income tenants facing eviction, and money has been set aside for enforcement of the city’s law barring landlords from harassing tenants.

Not all researchers agree that Measure ULA is negatively impacting the city. Last week, a team of researchers from Occidental College, UCLA, and USC published a report disputing claims that the tax is stifling investment in new housing.

Joan Ling, a retired UCLA lecturer who co-authored the report, argued it’s premature to conclude that the tax is driving down development because there isn’t enough data on building permits after the tax was enacted.

“Research and analysis are important and they contribute to the policy dialogue,” Ling said. “But not when this analysis is short on time, fuzzy on the conditions and variables considered, and has a weak linkage between the very specific policy recommendation with their analysis.”

Ling also argued the other studies had not proven the tax was to blame for driving down development, rather than other variables such as high interest rates, increasing building material costs and the timing of L.A.’s overhauled housing plan, which may have caused developers to wait for new incentives before submitting projects to the city.

“Timing is everything,” Ling said.

Researchers who say ULA is harming development published a rebuttal to critiques of their work. They say other researchers also found strong statistical signals, including a team associated with UC Irvine, UC San Diego and the Harvard Business School.

How many new apartments and construction jobs?

Perhaps the strongest point of disagreement between the competing research teams has centered on how many apartments, and how many corresponding construction jobs, have been created so far by Measure ULA.

In April, supporters of Measure ULA claimed that in the past two years, the tax had “built 800 new affordable homes” and “created 10,000 union construction jobs.” Those claims were published on the website for the measure’s Citizens Oversight Committee, but on Wednesday, a representative told LAist the post was updated “to clarify that the numbers cited on the blog come from the United to House L.A. Coalition, which is distinct from the COC.”

The city’s most recent budget report shows that only about $1.5 million had been spent so far on creating multifamily affordable housing as of May.

Smith, a co-author on one of the papers critiquing Measure ULA, said it’s impossible for that relatively small amount of money to have already created so many new homes and jobs.

“Anybody can do the math,” Smith said. “If you spent every bit of it on salary, that's enough to hire maybe 10 quality union jobs. The idea of 10,000 jobs being created by this seems completely absurd.”

So far, nine apartment projects with a total of 795 planned units have been awarded partial funding from Measure ULA. However, many remain unbuilt.

Smith told an LAist reporter at Chavez Gardens – a project in Boyle Heights that is still an empty dirt lot – it’s too soon to celebrate the creation of apartments and jobs that don’t exist yet.

“Looking at this, you can see that absolutely nothing's happened on this site, except for maybe some weed abatement,” Smith said. “It raises eyebrows. People say that these are units built and jobs created.”

The project site in Boyle Heights for Chavez Gardens, where 110 units of city-funded affordable apartments are planned, but not yet built.

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David Wagner/LAist

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Joe Donlin, director of the United to House L.A. coalition, which led the campaign for passage of the tax, said supporters now describe ULA funding as “accelerating” the creation of those jobs and apartments.

Addressing the communication around those figures, Donlin said, “I don't know that there was something wrong that needed to change, but I do think that there was clarification given.”

Drilling down on job creation estimates

Smith and his colleagues say even if the number refers to future construction jobs, the estimate is still likely too high. In a recent paper they calculated that alternative estimates of jobs created through affordable housing investments would connect existing ULA projects with, at most, about 2,000 eventual construction jobs, not 10,000.

The research team from Occidental, UCLA and USC cited the 10,000 jobs figure in its recent report, including a footnote that said the estimate came from “standard accounting practice used by the City of Los Angeles Bureau of Contract Administration.”

United To House L.A. coalition representatives told LAist the bureau estimated that every $1 million spent on total development costs in previous city-funded housing projects produced about 34 construction jobs, a number that ULA supporters rounded down to arrive at the 10,000 jobs figure.

LAist reached out to the bureau for further clarification about the origin of those statistics but has not received a response.

Two of California’s largest courts are testing an AI tool that can draft orders and produce research memos.

Judges so far are using it primarily for civil cases, but documents obtained by CalMatters indicate the possibility of expanded applications in criminal cases, where people’s freedom and access to justice are on the line.

The Los Angeles County Superior Court began a pilot program in February to test a tool created by the company Learned Hand. Other courts may follow, according to Learned Hand founder and chief executive officer Shlomo Klapper.

Learned Hand uses a combination of language models from Anthropic, OpenAI and Google to act as an AI clerk for judges. The company says it tests for bias and accuracy, but it has not yet published results.

In Riverside County, which has a $10,000 agreement with the company to test the program, civil and probate attorneys are primarily using the tool to draft research memos that help judges reach their decisions. It’s typical for research attorneys to assist judges as they review cases.

Los Angeles County Superior Court has a roughly $314,000 contract that includes a roadmap to test the tool’s use in criminal, family and probate divisions. Officials would not describe in detail to CalMatters the criteria they’re using to evaluate whether use of the tool can safely expand to criminal and family courts, where the stakes are often much higher than in civil cases.

One judge who spoke to CalMatters on condition of anonymity due to judicial rules of conduct was alarmed when their colleagues at a recent luncheon said the technology could be used one day to evaluate appeals from people who believe their conviction or sentence was tainted by racial bias. California courts are handling a wave of those claims after lawmakers passed the Racial Justice Act in 2020.

“I think it is outrageous,” said the Los Angeles County Superior Court judge. “AI cannot and never will be able to replace human judgment in evaluating complex social dynamics. Ultimately, that will erode the public’s confidence in the competence and fairness of the judiciary.”

A majority of California's superior courts now have generative AI use policies, according to documents obtained by CalMatters via public records requests, which they were required to create by the state Judicial Council before using the technology. Roughly a dozen of the 51 courts that have responded to CalMatters’ requests said they are using AI-powered tools from LexisNexis, Thomson Reuters, and Microsoft’s Copilot.

Use of AI in courts has been controversial because of the propensity of AI models to cite falsehoods and to produce sycophantic text. Models from major companies like Google and Anthropic can reduce critical thinking and brain activity, according to a 2025 MIT study.

Language model hallucinations have already made it into the judicial system. Researcher Damien Charlotin has documented hundreds of instances of litigants, lawyers, and judges making mistakes when using AI to do their jobs including nearly 90 cases in state or federal courts based in California since August 2024.

Last fall, a Los Angeles-based lawyer received a historic $10,000 fine for citing cases that don’t exist, and earlier this month the Sacramento Bee reported that use of AI led to errors in four cases handled by prosecutors in Nevada County. Most of these cases involve lawyers or people who are representing themselves in court, but UCLA Law School professors predict that more judges will make AI-fueled mistakes in the future. In recent months, the U.S. Senate investigated federal judges in Mississippi and New Jersey for drafting decisions with generative AI that had serious factual errors.

Klapper, who previously worked as a clerk for a federal appeals court and for surveillance technology company Palantir, said the judiciary needs AI in order to reduce backlogs and increase efficiency.

“Could we hire more people?” he told CalMatters. “Maybe, but it’s not going to keep pace with the exponential increase that’s coming, nor is it going to be able to adequately solve the crisis of today. I think the only solution is to give every single judge and staff attorney their own AI clerk.”

Klapper said he’s aiming to combine the best parts of what human judges can do with the best parts of what machines bring to bear.

“I’m not saying all machines aren’t biased,” he said. “I’m not saying my machine isn’t even biased. I’m saying we can test it and people have tested it. And that is the benefit over humans.”

Generative AI use policies for the Los Angeles and Riverside County superior courts only require disclosure if a motion, decision, or other document is written entirely with generative AI.

Both courts refused to say whether plaintiffs are aware that the tool is being tested on their cases. In a statement to CalMatters, a spokesperson for the Los Angeles County Superior Court said testing is done on motions that have already been decided, separate from live case environments. However, the contract allows for testing on live cases.

“It is important to note that even with successful evaluation and thorough testing, the Court remains several months, if not years, away from implementing this type of tool,” said the spokesperson.

The contract allows the tool to be used for two critical motions in the criminal division: A motion to suppress, which is designed to determine what type of evidence the prosecution is allowed to present at trial, and motions for post conviction relief, which are filed by people who have already been convicted and want another shot at freedom.

That’s the “greatest concern” for Los Angeles County District Attorney Nathan Hochman. When he reviewed the contract, he referred to the motions as “two incredibly important motions in the criminal justice system.”

“When you’re dealing with someone’s liberty — as opposed to in the civil setting, which is everything other than liberty — the stakes couldn’t be higher,” said Hochman. “I don’t want to take the chance, particularly in a criminal case, that AI happens to get it wrong. And now someone’s constitutional rights have been infringed. Someone has gone to prison who shouldn’t have, or on the flip side, that somehow someone gets off.”

'An extremely perilous road'

In Los Angeles, some judges first heard about the new Learned Hand contract during a March presentation by Superior Court Judges Yvette Verastegui and Olivia Rosales. They lead the criminal branch and visit courthouses throughout the county as part of an annual roadshow, where they update judges on court operations, discuss workload and field questions. During a luncheon, Verastegui and Rosales said the tool could be used to assist with Racial Justice Act petitions in the future.

California’s Racial Justice Act allows people to challenge a criminal conviction or sentence that they believe was based upon racial bias. Petitions are filed directly to the court from people in state prison. If a case is found to have merit, the process includes appointing legal counsel, filing briefs and setting evidentiary hearings before a judge would decide whether to grant the petition.

That process could look different with a tool like Learned Hand. Verastegui and Rosales explained that, following an incarcerated person’s petition, the tool could generate tentative decisions for judges to consider in denying or advancing cases to the next stages, according to one judge who attended the luncheon.

“The concern, of course, that I have is that the courts will utilize that as a reference point and then get stuck to that initial analysis,” said the judge. “It’s an extremely perilous road to go down. Putting aside the inaccuracy, which will be a significant concern, it dehumanizes the whole process. It does not treat people as individuals with lived experiences. It essentially reimposes a one-size-fits-all style of justice.”

A second Los Angeles Superior Court judge who spoke with CalMatters on the condition of anonymity remembered the presentation and said they would not trust nor use the tool to summarize a Racial Justice Act petition.

AI can replicate or intensify patterns contained in the data used to make a model, including human biases. Large language models have a history of demonstrating race and gender bias, an analysis of predictive policing tech used by LAPD found racial bias, and an analysis of the risk assessment algorithm COMPAS found that it is more likely to label Black people as at risk of committing crimes after incarceration than white people with a similar record.

Public defenders who spoke with CalMatters echoed those concerns.

Elizabeth Lashley-Haynes, a deputy public defender at the Los Angeles County Public Defender’s Office, said it would be “highly problematic and bordering on unethical” for a judge to use the tool to review Racial Justice Act petitions, which she described as “incredibly nuanced.”

“They’re like nothing else in the legal system that has ever really been done,” said Lashley-Haynes, who specializes in Racial Justice Act cases. “Words that are used in these cases that have racial undertones or racial meanings are way beyond the realm of anything that artificial intelligence could do.”

In interviews with CalMatters, Klapper and Los Angeles County Superior Court Executive Officer, David Slayton, denied that the court has any plans to use the tool for Racial Justice Act petitions. A spokesperson for the Los Angeles Superior Court later confirmed in an email to CalMatters that the contract permits the tool to be used in such a way “but that possibility has not commenced in any way.”

Klapper said if they were to build out a Racial Justice Act module, the tool would need to be evaluated for bias and co-developed with the court.

“The timing very fortuitous, right?” he said. “It’s a very fraught decision, I’m not going to lie…extremely high stakes — a scenario where I understand people might be very concerned. Especially with criminal, I have even more hesitancy, even more guardrails than normal about, because there are liberty interests at stake.”

Extending beyond civil cases

In Los Angeles, six superior court judges and their research attorneys are primarily using the Learned Hand tool to conduct research, summarize motions and assist in drafting tentative rulings, according to Slayton. He says the tool won’t move beyond the civil division “until the court leadership is comfortable.”

“The court is being very deliberate and careful about how we use technology like this,” he said. “So until we evaluate it and determine that it is effective in those areas, we will not extend it to other areas.”

Los Angeles County Superior Court's Hollywood Courthouse, in Los Angeles, on March 12, 2025. Photo by Jules Hotz for CalMatters The tool will be evaluated on a quarterly basis to determine its future application, Slayton said, but he did not specify what kind of evaluation that entails. In an email to CalMatters, a spokesperson later said that Learned Hand is evaluated “against the same substantive expectations applied to law clerks and research attorneys: accurate legal research, sound analysis, neutral and judge-ready writing, and reliable work product that supports judicial decision-making.”

Los Angeles County Superior Court Judge Samantha Jessner, who chairs the Judicial Technology Advisory Committee, said she was unaware of the possibility that the tool could eventually be used outside of the civil division until recently. Judges are not privy to contract negotiations due to certain ethical limitations, she said.

“I think we have a duty and obligation to explore whether or not there is a place for artificial intelligence in what we do as a judicial branch and that’s exactly what this pilot is intended to afford us the opportunity to do,” said Jessner.

Riverside County Superior Court signed an agreement with Learned Hand in February. In emails obtained by CalMatters, Klapper proposed to two Riverside County Superior Court executives, Jason Galkin and Sarah Hodgson, that the court use the tool for a common civil court motion and “then expand quickly once we earn our stripes.” He suggested that Hodgson assemble a list of motions and workflows “that generate the most pain,” citing examples that included the Racial Justice Act.

Roughly two weeks later, Hodgson described the most laborious motions “that want to drive us into retirement,” including discovery motions and attorney fee motions. For criminal cases, the court suggested that Klapper focus on “things with the largest paper records,” citing death penalty habeas petitions and parole revocation.

Since the pilot started, seven civil and probate attorneys have been granted access to the tool. Galkin, the chief executive officer of the Riverside County Superior Court, said they are “kicking the tires on the product” to see what tasks it can do. The tool is not being used to draft tentative rulings, he said.

“We don’t even know if expansion is likely so there is no set criteria for what expansion might look like or thresholds for that because right now, the core question is: Does this help staff and does it advance what they’re trying to do in their roles?” said Galkin.

As testing is underway, attorneys like Hochman say that use of AI is inevitable, but would be better suited for low-level, repetitive and routine tasks.

“It’s the analysis of the case itself, coupled with the conclusions that will be reached, that I’m very hesitant to trust AI at this point — in large part, because I don’t know all of the inputs that AI is using to make its decision. The only thing I’m 100% sure of is that AI didn’t go to law school,” said Hochman.

Cayla Mihalovich is a California Local News fellow.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

California’s Board of Equalization is a coveted spot once again for state lawmakers looking for a new gig almost a decade after then-Gov. Jerry Brown signed a law gutting the organization of any serious governing responsibility.

This year, three current state lawmakers are competing for seats on the nation’s only elected tax board. They’re among some two dozen candidates on the ballot for its four elected positions, which are divided by geographic districts.

The board has long been a launching pad to higher offices in California politics — Fiona Ma served on it before becoming state treasurer, as did Betty Yee and Malia Cohen before each being elected state controller.

The agency itself is a throwback to the 19th Century. It’s rooted in an 1879 constitutional amendment that created it and charged it with “equalizing” county property tax assessments statewide.

From that narrow mandate, it swelled to become a juggernaut that collected a third of the state’s tax revenue and provided a venue for people and businesses to contest their tax bills in front of the elected board. It survived numerous efforts by governors to kill it outright, including attempts by Pete Wilson and Arnold Schwarzenegger.

That is until 2017, when a cascade of allegations about board members misusing the office to promote themselves led to an authoritative state audit that lawmakers could not ignore.

Brown signed a law stripping the agency of any powers beyond what voters gave it in 1879 and created two new departments that report to the governor instead of the elected board: one to collect sales and use taxes and another to hear taxpayer appeals.

After that, Board of Equalization elections tended to be lower profile contests. Ted Gaines, a former Republican state lawmaker from the Sacramento area, won a seat. Former Democratic Assemblymember Sally Lieber is up for reelection on the board this year. The other members had experience in local politics instead of inside the Capitol.

“We’re lean but we’re not mean,” said Lieber, the incumbent for District 2, which includes 19 counties centered on the Bay Area. “I think the Board of Equalization is the right size in the system right now…I do really believe that the board has a role to play in being a forum for taxpayers to come forward to.”

This year voters will see more contentious elections for the tax board:

• In District 1 representing inland California, Republican state Sen. Shannon Grove of Bakersfield has more than $900,000 in a campaign account and name recognition from her representing the San Joaquin Valley in the Legislature since 2010. Democrats are putting up a fight for the district. Fresno City Councilmember Nelson Esparza is running with the party’s support.
• In District 2 representing coastal California north of Los Angeles, incumbent Lieber faces San Mateo Community College District Trustee John Pimentel. Lieber has the Democratic Party’s endorsement, but a number of Bay Area Democratic leaders are backing Pimentel, including state Treasurer Ma and San Jose Mayor Matt Mahan.
• In District 3 representing the Los Angeles area, former Monterey Park City Councilmember Yvonne Yiu put up $760,000 of her own money and has about $1 million on hand. The race has another heavyweight in Assemblymember Mike Gipson, a Democrat from Gardena who has served in the Legislature since 2014. 
• District 4 representing the San Diego area has an especially crowded race with Democratic state Sen. Tom Umberg of Santa Ana, San Ysidro school board member Martín Arias, San Diego Unified School District board member Cody Peterson, and Denis Bilodeau, a Republican supported by San Diego Assemblymember Carl DeMaio’s Reform California organization.

A forum for California taxpayers

The board was always popular among taxpayer advocacy groups, who liked that it provided a forum to focus on tax issues in a capital where debates often center on labor and business.

“It’s a very useful elected body that answers to the voters,” said Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association.

Some of this year’s candidates are thinking of ways to make the most of the agency.

Arias believes the board could do more to assist homeowners and potential homeowners. As a taxpayer advocate in the San Diego County Assessor’s Office, he says he works with the Board of Equalization every day and has a front seat to how the system works.

“I think there’s a bigger opportunity here to make the Board of Equalization the constitutional office that it is — that it should be,” he said. “There’s a clear opportunity here for us to start advocating at the state level for all of our taxpayers, including those that don’t speak English.”

Umberg said he’d like the board to have more investigative power and resources. Citing instances in which San Bernardino and Los Angeles assessors have been arrested on felony charges, he said he’s most interested in the board’s oversight of property tax assessors.

“Although it’s not a high-profile job, it’s a critically important job, especially when we’ve got so many revenue challenges in California,” Umberg said in an interview with CalMatters.

Questioning BOE’s relevance

Advocating for the board’s expansion has drawn criticism from former board members and employees. Yee, a board member from 2004 to 2014, has been vocal about abolishing the board entirely because she believes that its limited responsibilities could be easily transferred to another department or agency.

“I just really do question how this board continues to have relevance,” she told CalMatters. “I sometimes feel like the board is really doing a lot of work in search of finding problems to solve. …I know with each of the board members, they feel very strongly about being a taxpayer advocate. But frankly, every public official should be a taxpayer advocate. ”

Democrats stopped short of killing the agency entirely because they would have had to put that question to voters.

“They should have just chopped the head of the snake off and done away with the Board of Equalization altogether,” said Mark DeSio, a former communications director for the board. “They didn’t do that. They left enough of the cancer to grow back.”

He cooperated with the audit that revealed misspending at the agency that appeared intended to promote its elected members as well as another that showed widespread nepotism in its hiring practices. He then lost his job in the reorganization and filed a whistleblower retaliation lawsuit against the state.

DeSio believes lawmakers want seats on the Board of Equalization because it allows them to maintain a high profile until they can run for office again.

“That was the recipe for disaster a few years back,” he said. “Somebody better watch these guys. They’re not there for the policy. It’s for the exposure.”

Cayla Mihalovich is a California Local News fellow.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Even as gas prices continued to rise across the United States, sales of electric vehicles fell in April. That is in contrast to strong growth elsewhere in the world, such as Europe. But American drivers are gravitating toward at least one more efficient powertrain: hybrids.

Sales of new EVs fell roughly 18 percent from March to April, according to the latest data from Edmunds, an auto research firm. Another company, Cox Automotive, pegged the drop at closer to 6 percent. Either way, experts said it’s clear that high gas prices aren’t leading to a significant shift toward EVs.

“There was a lot of window shopping,” said Ivan Drury, director of insights at Edmunds, noting that searches for electrified vehicles on the company’s site were strong. “It did not translate to tire-kicking and purchases.”

Price remains the steepest barrier for most people, said Drury. While electric vehicles can be less expensive to operate over the long-term — especially when gas prices are high — the upfront costs remain significant. The average transaction price for an EV in April was $6,214 higher than for vehicles with internal combustion engines, Cox reported.

“It’s still a cost hurdle,” said Stephanie Brinley, a principal automotive analyst at S&P Global Mobility. “You don’t know how long it’s going to take to get that back.”

At Thursday’s average gas price of $4.56 per gallon, an EV buyer would have to drive more than 40,000 miles to make up the difference with a car that gets 30 mpg. Savings on maintenance, like oil changes, could accelerate that timeline, but factors such as higher insurance prices and having to install a home charger could make the payback period even longer. If fuel prices fall, the advantage of an EV also shrinks.

“It’s very difficult for people to wrap their head around, ‘Hey, if I spend this $55,000, I might over time save’,” said Drury. “It requires a bit more math than most people want to go through.”

The calculus is much simpler for hybrid vehicles, which utilize batteries that can improve fuel economy by 25 to 45 percent without needing to plug in. A Honda CR-V, for example, gets around 29 mpg while the hybrid version gets 37. More and more popular models are only available as hybrids, a strategy that Toyota has perhaps embraced most notably. Last year, it ditched the gas-only version of the Camry sedan. The 2026 RAV4 followed suit.

Overall, Edmunds data shows that sales of hybrids are up 20 percent year-over-year and nearly 50 percent since February, when the U.S.-Iran conflict began. Sales of gas-powered gas are up about 11 percent over those same two months.

“I think this is going to be a hybrid moment,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive. “There are a lot of options.”

Used EVs provided another somewhat bright spot, she said. The segment saw a 3 percent increase in sales from March to April and a price premium of only $1,096 over used internal combustion vehicles. Used EVs also sold faster than their used gas-powered counterparts. “They’re really selling efficiently,” said Valdez Streaty, who added that there should be a glut of EVs available throughout the year as leases end. “I don’t think the inventory will be an issue.”

With Iran maintaining its hold over the Strait of Hormuz and summer travel season looming, gas prices appear set to keep climbing — which would only make an EV more appealing. Other parts of the world have seen significant jumps in sales since the conflict began, with Europe experiencing a surge and China setting an export record in April, according to BloombergNEF.

In the United States, though, it seems that only people already in the market for EVs are making the leap. “Edge-case people,” as Brinley called them. Dramatic pump readings “might nudge them because they were already in that direction,” she said. “But what we’re unlikely to see is a shift in current [internal combustion car] owners just fundamentally making that change simply because of gas prices.”

This article originally appeared in Grist at https://grist.org/solutions/why-hybrids-not-evs-are-winning-over-u-s-consumers/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org