Dealership Data Request

The club regularly gets requests for dealer recommendations. Usually, this follows a poor dealership experience. We have an informal list of some dealers that have been recommended by members, but it is not complete and doesn’t cover the whole state.

So we would like to let the data do the talking to the extent it can. Our objective is to publish a list of top dealers for each brand and we hope to have representation across the state.

We made the request to CHEAPR, which is run by the Center for Sustainable Energy (CSE), on June 23. On July 7, they advised that they were working on it. We are still waiting as of this writing on July 26th. Hopefully, we will receive it soon.

We will be using rebates is a proxy for sales and it is imperfect. When we publish the data, we will describe in detail what it represents and its limitations. We have asked for granular data. We will cut and sort the data to make it as clean as possible, perhaps by brand by county.

There was a recommendation in the DEEP EV Roadmap to create a dealer recognition program. We support this as long as it isn’t vaporware. If it proves to be truly robust and stays up to date, then we may back off of the data.

We hope to be able to post the actual data soon. This doesn’t seem like a difficult request.

EVs are not uniformly distributed across the state

Fairfield County has consistently tracked at around 40% of EVs in the state and is 41% in this July 1, 2020 iteration. This compares with its having 26% of the state’s population. All of the other counties under-index relative to population.

EV Distribution by City

The top cities largely held their position in terms of the number of registered EVs with Greenwich, Stamford, and Westport in the top 3 positions. This chart excerpt shows the most recent two data points, January and July, for the largest cities. Greenwich added the largest number of any city with 69 additional EVs since January.

EVs Per Capita by City

Westport remains the leader in EVs per capita, followed by Weston, New Canaan, Woodbridge, and Greenwich. This screenshot is an excerpt of the top cities. The full list can be viewed in the dashboard (use the scroller).

Fuel Type Trend

The mid-year 2020 update for the interactive EV Dashboard has been published. The relatively strong performance for BEVs contrasts with the change for PHEVs, which increased only 1% over the past 12 months. As of July 1, there were 6874 BEVs and 5092 PHEVs (along with 25 electric motorcycles and 3 fuel cell vehicles).

This has been the recent trend, with PHEV growth leveling off beginning with the January 2019 data point (covering the 2018 calendar year).

Trend of Registered EVs

There are now 12,624 EVs registered in the state, as of July 1.

While the overall EV growth was slower than we would like, the last 6 months, perhaps surprisingly since they included the pandemic, was similar to the prior 6 months. There have been reports of EVs suffering a smaller sales decline than the industry at large. The 16.9% growth rate of the past 12 months is almost exactly double the 8.1% of the last 6 months.

Trends by Make

The pattern that we have seen over the last few iterations of the dashboard holds here, namely that Tesla is the big driver. This chart tracks the change in EV registrations by Make since 2017. It is an excerpt – all makes are available in the dashboard.

Tesla now accounts for 40% of all registered EVs in the state with 5035 vehicles. (For charts in this blog post that do not display values, those can also be seen on the dashboard by hovering over a chart element.)

If we look at it from the perspective of the contribution of each make to the increase of the past 12 months, it is even clearer. This waterfall chart shows that Tesla was responsible for 74% of EV growth (all EVs, not just BEVs). Some manufacturers, as can also be seen in the trend chart, are seeing declines in net cumulative registrations.

Trends by Model

When we drill into the individual models, it is the Model 3 that defines the picture. The growth of the Toyota Prius Prime (Prius Plug-in and Prius Prime are combined in these charts) has greatly slowed. The Model S and X have a steady, but not terribly large increase (and it is likely the Model 3 is cutting into sales of the S in particular). The Model Y has yet to make its presence felt with just 29 of them in the file. The Chevy Volt, once the most widely registered model in the state, has been discontinued. It has a presence in the used EV marketplace, but the overall numbers are showing a gradual decline. The Nissan Leaf is another major early EV that has slowed considerably in recent years.

The outlook for the rest of the year has to be characterized as uncertain. We aren’t close to being done with the pandemic and the bad economy. Manufacturers have delayed refreshes and new introductions until 2021. We are expecting significant refreshes for the and Bolt, the new Ford Mach-E, Rivian SUV and pickup, among others. The chart below is also an excerpt of individual model trends with the full chart available on the dashboard.

Newly Registered EVs

This is the chart of EVs by Make registered in the past 6 months. Tesla accounted for 47% of all new registrations, which is why it’s current share has increased, and why BEVs are growing. There were a total of 1525 vehicles registered in the past 6 months. With a turnover of 578 vehicles, the net increase was 947.

The increase we are seeing, assuming it remains similar for the second half of this year, is pacing below the necessary compound annual growth rate to meet the objectives of the ZEV MOU.

A word about the data:

The EV Club of CT has a standing Freedom of Information Act Request with the Department of Motor Vehicles. The DMV updates its census of EVs semi-annually, and when they do, they send us a file of the vehicle details. A reminder that this dataset is registrations, not sales. It includes new vehicle sales or leases, used EV purchases, people moving into the state who own EVs. We do not get the “denominator,” meaning all of the vehicles registered in the state, so we are not able to look at EV share of the total market.

The dashboard itself is interactive. Hovering over a chart element will display the value. The charts can be filtered by clicking in a chart element or by checking the boxes in the slicers. Multiple boxes can be checked. Please contact us if you have any questions.

CHEAPR Rebates Continue to Crawl – Revised Guidelines Needed

UPDATE: CHEAPR Board Meeting Scheduled for July 17th.

CHEAPR recently published updated stats through May 30. The recent trend continues. May rebates totaled 25. The breakdown is 14 BEV, 11 PHEV, and 0 Fuel Cell.

With the publication of the May dataset, CHEAPR restated its data for April. For those who saw the blog post regarding the April data, the 13 rebates have been revised to 17. It is not unusual that minor adjustments are made a little after the fact.

CHEAPR has been pacing severely under budget as defined by total rebate dollars awarded relative to a straight line pacing of the $3MM annual budget (i.e. $250K monthly). Any month where rebates are under $250K will cause this underage to widen. The amount rebated in May was $26,500 and the expended funds are now 81% under the pace number.

The most rebated vehicles were the Tesla Model 3 with 8 rebates and the Toyota Prius Prime, also with 8 rebates.

CHEAPR publishes stats on its website and makes an Excel download available, which is what we work from. There are two date columns and we use the application submission date rather than the sale date as that is what CHEAPR bases its own reporting on.

We have reached out to CHEAPR to request the names of the dealers associated with each rebate (for non-Teslas, obviously). Our request has been “escalated to management.” It is common for our club to get asked for dealer recommendations by people in the market for an EV. By the time they contact us, they have usually already visited one or two dealers and it wasn’t a pleasant experience. We have names of some dealerships that have been recommended by members, but this would be hard data and we think it will help, especially in areas of the state where we don’t have a lot of members. We also understand its limitations and will act accordingly. Dealership-level info is published in some other states, NY for example.

The CHEAPR board is supposed to meet in July. We have not heard about a confirmed date. According to the website, the program will have some revisions for 2020 and we eagerly await to hear what they are. We feel the current structure is not working and have offered our input, which has been described in prior blog posts, such as this recent post from June 1.

Rebates at Lowest Level Ever

The lowest number of monthly rebates since its inception has been awarded by CHEAPR in April 2020, a not so grand total of 13, down from 90 in March.

There is almost no public reporting anymore of monthly new vehicle sales, but we know the automotive sector rapidly plunged in the latter half of March, which was felt over the duration of April. There have been some reports of a modest uptick in May.

Following the counter-intuitive increase in rebates in March (relative to Jan. and Feb.), when the rest of the world was collapsing, this is probably more in line with what will be the new normal for the time being. Tesla so dominates the EV market, as well as being the only manufacturer to post a sizable YOY sales increase in Q1, that how many Model 3s are rebate eligible is mostly what determines where the trend goes. It is also possible that some Model 3 supply disruption due to the temporary closure of the Fremont plant is part of the reason, as well. The Model 3 accounted for 54% of April rebates, which translates to all of 7. General Motors has been heavily discounting the Chevy Bolt, but there were no Bolt rebates in April.

CHEAPR Way Under Budget

This blog has been critical of the drastic restrictions imposed on rebate parameters in October 2019. DEEP told us at the Tesla Leasing Event in February that they were concerned that funds would run dry. That was a 3-month problem (Oct – Dec. 2019) until the new funding started, but the new CHEAPR board has yet to course-correct, despite pacing hugely under budget.

The CHEAPR budget is $3 million annually and there are no rules about how it is supposed to pace. There are good reasons for carefully managing the budget. Temporary funding disruptions are, well, disruptive. However, if we look at the budget on a straight-line cumulative basis and compare it to the dollar amount issued for rebates, by that definition it is pacing 79% below budget.

There is also the consideration of a forthcoming rebate for used EVs. To this point, there has been no announcement, and we are doubtful there will be one anytime soon because the Roadmap recommends that an outside contractor be engaged to design and implement it, meaning this presumably hasn’t happened yet. We also expect that an incentive for a used EV will be lower than for a new vehicle, and will include an income cap, as well as a lower MSRP cap. We don’t see this as a budget-buster.

EV Roadmap and CHEAPR

The subject of purchase incentives is accorded 15 pages in the EV Roadmap and it traces the origins and thinking about the program. It is still true today, as it was in 2015 when CHEAPR was begun, that while battery prices are on a downward trajectory, EVs have not yet reached cost-parity with ICE vehicles. Cited in the Roadmap is a stat from the Multi-State ZEV Action Plan that there was an average purchase price difference of greater than $10,000 between comparable EV and ICE vehicles in 2016. While EVs cost less to run and maintain, this headline price difference is a real barrier.

I have to say that it was a surprise to learn from the Roadmap that until 2020, CHEAPR was a pilot. For 5 years. Well, okay. With the legislation that was passed last year, it is now reconstituted with an independent board that remains situated in DEEP for administrative purposes.

Something that has changed is that two manufacturers, Tesla and General Motors, have exceeded the unit sales threshold for the federal EV tax credit and have passed beyond the phase-out period. There is no federal incentive for vehicles from these two manufacturers. The Roadmap cites projections from EVAdoption that indicate the next automaker to cross the sales threshold will be Nissan in the latter half of 2021. (This projection predates the COVID-19 crisis.) Attempts in Congress to modify the program and raise the threshold have not met with success. In this context, CHEAPR assumes a larger role.

Value of Purchase Incentives

The EV Club of CT is a supporter of CHEAPR and available data indicate that incentives matter. CHEAPR has handed out 5,984 rebates through April 30, 2020. Given that there were 11,677 EVs registered in the state as of Jan 1, 2020, the program looks to have played a meaningful role. Survey-research of rebate recipients reports that over 80% of respondents cite the incentive as being either extremely or very important to their decision to acquire an EV.

The Roadmap cites experiences of similar programs in other states. One of them is Georgia, which has been cited previously in this blog, as a dramatic example of a “light switch test.” When Georgia lawmakers rescinded a generous tax credit of $5,000 and added an annual EV fee, sales fell off a cliff. This is a graphical representation of what happened that was published on page 89 of the Roadmap.

Rebate Parameters

There are several variables that go into how much of a rebate if any, a given EV purchaser qualifies for, which we are calling rebate parameters (and which DEEP refers to as “bins).

• Available funding
• Rebate size and tiers
• MSRP cap
• Future consideration of a rebate for used EVs, along with a likely income cap.
• One rebate lifetime per licensed driver

Rebates are offered for battery electric vehicles (BEV), Plug-in Hybrid Electric Vehicles (PHEV), and Fuel-Cell Electric Vehicles (FCEV). Rebate parameters have changed several times since the program began. The size of the rebate was originally pegged to the size of the battery pack but was modified in 2017 to be based on EPA-rated electric range. Battery pack size is not directly indicative of the range, so this approach makes sense. Also, over time, there are changes in technology (substantially longer ranges) and other aspects of the environment that gradually, but consistently, evolve.

The MSRP cap initially was $60,000. It was changed to $50,000 in October of 2018 and then to $42,000 where it currently stands. Rebate tiers are currently $5000 for any FCEV, $1500 for a BEV with a range of at least 200 miles, $500 for a BEV with a range of fewer than 200 miles, and $500 for any PHEV.

The number of rebates awarded has declined significantly since the October change and it is obviously because the lower level now excludes almost all trim levels of the Model 3. This blog has discussed this previously on April 2nd and in earlier posts.

We also noted that the lowering of the MSRP caused a shift in the mix of rebates toward PHEVs, which we discussed here. (April is the low-volume exception.) But you wouldn’t know this from the Roadmap, which on page 83, contains this exhibit of rebates by fuel-type.

The footnote indicates that the rebate data had been updated through July 26, 2019, in other words, before the changes were made. It seems clear that lowering the MSRP cap was counter-productive, both from the perspective of consumers being able to use the rebate along with making the funds less efficient in terms of zero-emission miles subsidized. The market in general is trending toward BEVs which may eventually change things. But we strongly feel that the MSRP should be raised to at least $50,000 (same as MA) or higher (NJ is $55,000 and NY is $60,000). The rebate levels could be left in place while the run-rate is evaluated with the higher MSRP, whatever modeling has been done for used EVs, and projections for when this depressed market normalizes. We are not aware of the law allowing unused funds from one year to be carried forward.

Dealer Incentive

A headline that appeared over a NY Times story in 2015 read, “A Car Dealers Won’t Sell: It’s Electric.” The unwillingness of many dealers to sell EVs has been a persistent bottleneck. So the idea that DEEP included in the original CHEAPR formulation a $300 incentive that would go to the dealership for each EV sold seemed a worthwhile experiment. It may sound slightly farcical to pay a business that is in the business of selling cars to sell cars, but if that is what it takes to seed change, so be it.

The incentive was subsequently lowered from $300 to $150. In the Roadmap, DEEP openly questions whether it is worth it and whether the funds would be better allocated to consumers to stretch what is a modest budget when compared to incentives in other states. (For example, the New Jersey per capita funding is 50% higher.) DEEP also found that the majority of the incentives were kept by the dealership, i.e. not given to the salespeople, which was kind of the basic idea.

This was underscored by two EV Shopper Studies done by the Sierra Club in 2016 and 2019. In the latter study, it was found that 74% of dealers did not have a single EV on the lot. The study did not report out CT separately (only CA had sufficient sample size for that) but in the 2019 study, there were no local dealers among those visited in the research that scored the highest rating. Our EV Club does know of some dealerships that do a good job with EVs and we appreciate them. We just wish they were the norm and not the exception.

VW Works Around Its Dealers in Germany

The most interesting recent development is from VW in Germany. They have announced that VW corporate will take responsibility for selling EVs and the dealers will only act as agents. Dealers will arrange test drives and deliver the car, but will not otherwise be part of the sales process. They will receive a fee for each vehicle they deliver and they will not have to buy the car. This last part is particularly interesting because it eliminates the risk of having to carry the cost of financing the vehicle if it is a slow-seller. It is the closest one can come to direct sales while still maintaining the franchise sales model and implicitly acknowledges its limitations. Here is a more detailed description published in ChargedEVs.

Dealer Recognition Program

Instead of the dealership financial incentive, we endorse DEEP’s proposal to work with the CT Auto Retailers Association (CARA) and create a dealer recognition program. If this is promoted to the consumer, it could serve to avoid some of the negative feedback loop that currently exists. We encourage that care is taken in giving this award so it isn’t vaporware. EV Club of CT works with the Sierra Club to conduct its EV Shopper Studies and our feedback to them will be to separately track visits to dealerships that are recognized in this way to see if their actions match the certification.

Fuel-Cell Electric Vehicle Incentive

CHEAPR has included FCEVs in its incentive plan from the beginning when incentives were set at $3,000. In July of 2016, the FCEV incentive was raised to $5,000. And when the MSRP cap was lowered to $42,000 for EVs, it was raised to $60,000 for FCEVs (they’re more expensive).

There have been exactly zero of these incentives awarded and there is a total of 3 FCEVs registered in the state. There is only 1 public hydrogen refueling station in CT.

FCEVs were dropped from the federal tax credit in 2017.

The rationale in the Roadmap is to support all promising new technologies and DEEP recommends continuing these levels for FCEVs for the duration of the current funding, which is through 2025. Their goals are modest: 591 FCEVs in the fleet and 6 or 7 refueling stations in the state by 2025. Keep in mind that a hydrogen refueling infrastructure has to be built from scratch. The other rationale that we have heard is that FCEVs have a longer range (and a short refueling time if you can find a place to fill up). The range part of that used to be the case, but now the longer-range BEVs have a similar range as FCEVs and higher mpg-e. Certainly, the differential in incentive can no longer be justified by range alone.

This blog is not against FCEVs, which are zero-emission vehicles. We do feel that DEEP/CHEAPR over-emphasizes them and, at times, uses them to represent CHEAPR in an intellectually dishonest way. At the Tesla Leasing Event in February, the DEEP spokesperson said that the CHEAPR program offers rebates of up to $5,000. It may be a convenient headline, but it is only true in the narrowest technical sense. For all practical purposes, the max rebate is currently $1500. And almost no Tesla qualifies for even that.

This is a link to the Roadmap. DEEP recommendations for CHEAPR are on page 92. We won’t repeat them here.

As we have made clear, these are our priorities:

• Raise the MSRP cap.
• Move quickly to implement an incentive for used EVs.
• Raise rebate levels, funds permitting.
• Eliminate the dealer incentive and re-purpose those funds for consumers.
• Develop guidelines for a dealer recognition program, which hopefully includes some input from consumers.
• Publish rebate data at the dealership level as they do in New York. Arguably, that alone is a dealer recognition program.
• Make e-bikes eligible for incentives under CHEAPR.

And, finally, one area where we are in agreement with the Roadmap, is to look to the future and the potential for leveraging incentives by partnering with utilities, as part of TCI, and with the manufacturers.

The photo above of the Hartford area air quality, with readings of zero, means that in order to have cleaner air, you’d have to live on the moon. Air quality was already hugely improved as a result of the COVID related lockdown which has shuttered industry and greatly lessened traffic volume. Add to that a storm system that moved through the area yesterday, followed by high winds today, and we now have a “breathe deeply” moment.

As we have said in previous posts, we have an opportunity as a society, to implement measures going forward to maintain this level of air quality.

Below is Fairfield County. Not quite perfect, but close.

For comparisons to what air quality typically is in recent years in this area, which ain’t great, see our earlier post. It contains historical images from PurpleAir and NASA.

First Quarter Sales Results Were Terrible for the Industry, but a Sliver of a Silver Lining for EVs

The first-quarter economic data were just released and as bad as expected (GDP down 4.8%) with worse to come.

According to Automobilemag.com, nationally, automobile sales were down 12% for Q1 year over year because of a 41% decline in March.

Only two manufacturers reported a quarterly gain. Kia was up 1% and Tesla was up 40%. All others fell by as much as 30% (Nissan). Since Tesla basically carries EV sales, it is possible that EV market share is up for the quarter. General Motors was down 7%, but the Chevrolet Bolt was up 36%. That could be due to this being the final quarter of the phase-out of the federal tax incentive for GM, which is over the 200,00 unit sales threshold. It now joins Tesla as the only manufacturers that no longer have the benefit of this tax credit. We await final data for other EVs.

Despite a stronger than expected earnings call from Tesla, and after-hours momentum for the stock, there was some unfortunate hyperbole from Elon Musk over the temporary closure of its manufacturing plant in Fremont, CA. (Its plant in China is re-opening.) The company is ahead of schedule in its rollout of the Model Y, which is expected to be an even stronger performer than the Model 3. The economy may be cratering, but their problem seems to be more supply than demand.

CHEAPR Rebates Run Countertrend and Rise in March

March was clearly the worst month of the quarter by far, but CHEAPR rebates actually rose relative to January and February. As shown in the graph at the top of the post, this is almost completely driven by the Model 3, despite the fact that only the most basic trim level falls under the revised MSRP cap of $42,000. 39 of the 86 rebates in March were for the Model 3, a lower percentage than it was before the change in October 2019, but still surprisingly high.

CHEAPR data are loaded through March 31. They typically update monthly and lag about a month.

Despite the March spike, the annual run rate based on a straight-line projection of the quarter is only $756,000, still well under the $3 million allocated. The messaging remains on the CHEAPR website that revisions to the program are coming this year, but, hey guys, it’s almost May!

This is a screengrab from the CHEAPR website showing rebate levels by month from inception through March 2020. The levels rose as EVs gained more traction and, in particular, Tesla launched the Model 3, but then fell after the changes in October. The green shading is for BEVs and the blue is for PHEVs. The amount of green shading has increased and is driven primarily by the success of the Model 3, the discontinuance of the Chevrolet Volt, and a softening in the number of rebates for the Toyota Prius Prime. The introduction of the Chevrolet Bolt and Nissan Leaf Plus have had a more modest impact.

Coronavirus has given us clean air. EVs could, too.

The photo above is from PurpleAir, which is a WiFi-connected, networked, sensor. The date is April 11, 2020. Individuals can buy these and the results are collectively monitored in real-time. Users have the ability to use an app to drill into the data to isolate specific geography. See all those green dots? That never happens in Fairfield County, the part of the state with the worst air pollution. It could, though. This is what an EV world (along with mass transit and bikeways) could be like.

And maybe it will be. An article in Elektrek reports that a study shows consumer intent to purchase EVs is on the rise as a result of this breath of fresh air we have been experiencing. The short-term outlook for EVs is bleak with a recessionary economy and low gas prices, but it would be a silver lining if this served to wake people up to what is possible.

This is a PurpleAir screenshot from 2018. Any value over 25 is, to some degree, unhealthy. Yellow is bad. Orange is very bad.

NASA has also published images, in this case before and after for the Northeast, showing the impact of the coronavirus social distancing measures yielding a 30% decline in nitrogen dioxide. A picture really is worth a thousand words.

According to ABC News, a study conducted by Harvard’s T.H. Chan School of Public Health found that “people with COVID-19 who live in areas with high air pollution levels are more likely to die than those who live in less polluted regions.” The study reported that  “a small increase — one microgram per cubic meter — in long-term exposure to particulate matter leads to a 15% increase in the COVID-19 death rate.” They caution that findings are preliminary. It certainly makes intuitive sense.

As reported in the LA Times about a recent clean-air day in California, “If I could wave my magic wand and we all had electric cars tomorrow, I think this is what the air would look like,” said Ronald Cohen, a professor of atmospheric chemistry at UC Berkeley who has been studying the effects of the stay-at-home orders on air quality.

Coronavirus is a high price to pay to experience cleaner air. With the expanded use of EVs, we can keep it that way.

CHEAPR Rebates – The Doldrums Continue

Given the after-effects of the change in rebate parameters, the numbers seen in the graph were not a surprise. This information dates through the end of February, which is the latest that has been released on the CHEAPR stats page.

The detail for the month is below:

February saw low rebate numbers, continuing the trend from January and Q4, due to the lack of improvements in the CHEAPR rules. The economic impact of COVID-19 has yet to be visible in this timeframe

The balance tipped slightly to BEVs because Bolt rebates increased while both Ioniq PHEV and Prius Prime rebates decreased. Tesla remains at a very low level since all but the most basic trim level of the Model 3 are now excluded. Deliveries of the Model Y have begun, though we don’t know how long it will be before volume ramps. That vehicle runs a few thousand dollars more than the Model 3 so we don’t expect it will qualify for rebates.

Last we heard, the new CHEAPR board was not completely filled, but they have a quorum. All that’s been done has been to extend the same parameters that were in effect in Q4 2019 into 2020. One-quarter of the way into the new year, there is still no news on promised revisions or on used EV purchase incentives.

As can be seen on the screenshot from the CHEAPR stats page, there was a total of $45,500 in rebates that were disbursed. This works out to $546,000 annually on a straight-line basis, against a budget of $3 million.

It is likely to be a difficult road ahead for at least the next few months. We can’t rule out the possibility that federal aid meant to counteract the impact of the recession on state finances will be inadequate. Early signs point to that being the case, as evidenced by what Governor Cuomo of NY had to say at a recent press conference. Budget cuts are inevitable and we wonder if CHEAPR will fall victim to that.

Plummeting Oil and Gas Prices

Part of this environment is plummeting gasoline prices. This is a recent chart from Gas Buddy and, well, you get the idea. The blue line is national and the red line is Bridgeport, CT.

Gas prices, or more specifically, the price per barrel of oil, are falling not only because of reduced demand from a recessionary economy exacerbated by social-distancing measures but also because of a price war between Russia and Saudi Arabia. Either one of those things would have caused this, but in this instance, demand began to fall, OPEC wanted to implement production cuts, Russia did not go along with it, and now Saudi Arabia is aggressively cutting prices, presumably to pressure Russia. This has accelerated the fall in the price per barrel. Absent some interim mediation, the next OPEC meeting is in June.

This could have knock-on effects for American (and other) shale oil, which according to Investopedia, has a floor price of anywhere from $40 to $90 per barrel. (This could be part of why Russia wants to do this.) Below is a chart of oil price trends. Shale oil is a heavily leveraged industry, so the impact could conceivably be felt in the bond market.

This blog is not a fan of shale oil. Fracking is environmentally destructive and produces a tremendous amount of natural gas, most of which is being flared at the well, spewing greenhouse gas emissions.

This week we also had the news of the administration formally implementing the rollback of phase 2 CAFE, though the question of whether the CARB states can return to a separate standard is still being litigated. This move will please the fossil-fuel industry. The rest of us lose. Even the automakers are less than enthused. It will accelerate carbon emissions, cause more sickness and death from air pollution, and, according to a report in the NY Times, and based on the administration’s own data, it will impose an economic cost on society as high as $22 billion.

Opportunity, Should Policy Makers Choose to Make Something of it

Despite the headwinds, there is likely more stimulus to come and this could be an opportunity. The first packages rightly focused on stanching the bleeding with unemployment insurance and support for small businesses. When the outbreak wanes, there will still be a need for fiscal stimulus. It is an opportune moment to craft such legislation so that it includes renewable energy infrastructure and purchase incentives. Wouldn’t it be nice to replace lost shale oil production with renewables and stationary storage?

Renewables and energy efficiency measures were a successful aspect of the 2009 stimulus legislation. And from that previous experience, it follows that there are data. They know what worked. This could help policy-makers to understand how to best incorporate long-term climate change objectives within short-term stimulus needs. Also, the energy-efficiency part of the 2009 stimulus did not include building infrastructure to better defend against severe storms and rising sea levels, which have now become a fact of life. This supports both resiliency and job creation. If this administration does not have the foresight to understand this, then perhaps we’ll have to wait and see if there’s a new sheriff in town in 2021. The passing of more legislation will almost certainly continue into next year.

In the meantime, it falls to us to accelerate EV adoption, one person at a time.

Updated Track of CHEAPR Rebates – Data through 1/31/20

We have been keeping watch on rebate activity since the most recent change made to the CHEAPR rebate parameters, which lowered both incentives and price cap. The lower level of rebates continues as portrayed in the chart atop this post. The chart tracks the number of rebates by month from January 2017 (the program began in May 2015) through January 2020, which is the latest published data. CHEAPR usually updates their data about 4 weeks after the fact, so we are a few weeks from seeing February data. Although you don’t see it in the chart, the breakdown of rebates continues in its shift to PHEVs, which accounted for 57% of the rebates in January.

CHEAPR has posted an announcement on its website that they are reviewing the parameters and we should expect a change later this year. It is a very general update and we do not know what changes they are considering or when they will be implemented. The announcement also notes that they are looking into a rebate for used EVs, but again, no specifics.

The enabling legislation that was passed in 2019 established a $3 million annual allocation for CHEAPR beginning January 2020 through 2025 and authorized the development of the used EV incentive. The funds come from the clean-air surcharge on automobile registrations.

CHEAPR Structure

The other part of the announcement that we found interesting was that even though the program began in 2015, it had been considered to be a pilot all this time. Who knew! Now it has a more official status as noted in Public Act 19-117. As part of this structural modification, CHEAPR is getting a board of directors. This board is in the process of being filled. To our knowledge, there has only been one meeting so far this year. This nascent process seems to be part of the slow speed of change.

This organizational transition may cause delays in processing rebates.

This is a link to Public Act 19-117. It is a lengthy document and most of it has nothing to do with EVs. The part about CHEAPR begins on page 115.

Possible Data Conflict

The CHEAPR website shows rebate detail. If you toggle the slider, it reports 47 rebates for January. The website also offers an Excel file for download, which is what we used to create the chart. This file has two date fields: date of application and date of sale. We used the date of sale. Both numbers differ from the HTML feature. The date of application count is 57 and the date of sale count is 44. I guess that means your mileage will vary.

Run Rate

Based on the January data (and we would like to point out that there is a small difference in the data in the visual that is on the CHEAPR website and the Excel file that we downloaded to create the chart), the run-rate is about $500,000 annually. January has typically been a somewhat slow month for EV sales, generally speaking, but if the parameters are not revised, the allocated funds will not get spent.

There is one other factor to note that may indirectly affect rebate volume, which is that General Motors phases out of the federal tax credit as of March 31. There were 7 Chevy Bolt rebates in January. This car has been a tepid seller, to begin with, but losing the federal tax credit won’t help.

We eagerly await further news regarding their specific plans.