What Is Behind This Extreme Action by Eversource and United Illuminating

The largest electric distribution company, EDC for short, (a.k.a. utility) in the state, Eversource, announced last week that it would suspend its participation in the EV charging incentive program. As reported in the Hartford Business Journal, Eversource will stop taking applications after May 22 for residential and commercial level 2 charging incentives and will not award level 3 DCFC incentives in 2024.

Eversource cites “uncertain regulatory treatment,” and complains they are not getting timely funding. This comes one day after it was awarded an 18.7% rate hike. PURA responds in part that Eversource has not yet received cost recovery because it did not ask for it by filing the required distribution rate amendment application.

Senator Norm Needleman, in a statement made to CT Public Radio, characterized Eversource’s actions as “threatening, vindictive, and irresponsible,” and disrespectful of ratepayers who are facing a substantial increase in their bills.

United Illuminating, which also recently received a rate increase, has also announced the suspension of the EV charging incentive. Theirs was an immediate suspension, as of April 12th. New applications are not being accepted. Applications submitted prior to April 12th but not yet approved will be placed on hold. UI will payout the incentives for approved projects, but there is no timeline for the payments to be made.

Our Take

This occurs against a backdrop of the Public Utilities Regulatory Authority, PURA, trying to shift the nature of the regulation to incentivize the EDCs to support transitioning CT to a greener, more resilient, and more affordable grid, known as the Equitable Modern Grid Framework. Changing the nature of the regulation would not reduce the rate of return for the EDCs; they would have to direct their efforts differently and would have different performance metrics.

These PR wars tend to be one-sided. The EDCs can say whatever they want, but as noted in the HBJ article, PURA is constrained from speaking about the substance of an open motion. In an indirectly related action, the legislature last year passed a law that makes CT the third state to ban the EDCs from using ratepayer dollars to pay for lobbying expenses. According to the detailed reporting on this by the CT Mirror, utilities around the country use these funds to block climate action and pressure policymakers to let them hike up energy bills.

PURA established the following objectives for its Equitable Modern Grid Framework:

1. Support (or remove barriers to) the growth of Connecticut’s green economy;
2. Enable a cost-effective, economy-wide transition to a decarbonized future;
3. Enhance customers access to a more resilient, reliable, and secure commodity; and
4. Advance the ongoing energy affordability dialogue in the State, particularly in underserved communities.

If you would like to learn more about this effort, we recommend two resources that are easy to consume. One is an e-magazine based on a virtual “fireside chat” with PURA Chair Marissa Gillett and Representative Jonathan Steinberg that was prepared by PACE (People’s Action for Clean Energy). The other is an interview of Chair Gillett by David Roberts on his Volts podcast.

The EV Club thinks these charging incentives are important, not only to reduce the financial barriers to EV adoption, but in the service of grid resiliency. Consumers who take the incentives are required to participate in a managed charging program, which pays them up to $200 annually to charge during off-peak times. The flexibility inherent in when an EV can be charged is a benefit to the grid as peak load is reduced and the charging can help load-balance during periods of low demand. The slide at the top of the post is from the presentation given by UI at our conference demonstrating the impact of managed charging with optimization.

We are critical of the EDCs resorting to these scorched-earth tactics to further a political agenda. It will only sow confusion in the marketplace and slow EV adoption. Also, from the perspective of the EV Club, we have invested considerable time and effort to support both Eversource and UI in educating consumers and promoting the incentive. We have had them present at multiple meetings, speak at our conference, gave them feedback on the registration and implementation process, and published a considerable amount of content. It feels like an act of bad faith. Get with the program, guys!

Data Updated Through the End of 2023

The EV dashboard is live on the website. It has slicers and interactivity. Of course, if anyone would like information and is having difficulty finding it, please reach out to us at EVClubCT@gmail.com.

The photo at the top of the post is the top 10 EV makes (including battery electric vehicles and plug-in hybrids) as of January 2024.

This is the link to the Dashboard.

The data elements that are there include:

• EV trend
• Tend with how far we need to go
• Powertrain
• County and city
• Cities per capita
• EVs as % of vehicles by city
• Map of registered EVs
• EV by make and model
• EVs by make within city
• EV New (2023) registrations by make and model

Pro tip: The pagination is below the fold. Scroll down. Click on the page number.

The map at the top of the page depicts the EV count by city. The bubble size reflects the overall count and the pie wedges show BEV (light blue) and PHEV (dark blue).

Not all of the charts below have numbers due to the space constraints of a static screenshot. We will be publishing an updated dashboard (tbd) with full interactivity and slicers. If anyone needs a number, please reach out to the club at info@evclubct.com.

The source for the data is the DMV, but it was accessed via the Atlas EV Hub.

EVs by County

Fairfield County continues to be EV central for CT. The other counties retain the same rank as one year ago.

EV Counts by City

Below are the EV counts by city, followed by the trend for each city starting with January 2022 (5 waves of data). You will note a fairly large bar labeled “blank.” This is due to a combination of vehicles in the file having blank geo records and some others listed with zip codes that aren’t in CT. The file comes to us by zip code (now anyway, it wasn’t always the case) and so when it gets married to the city, it reverts to a “blank” label. It is, apparently, possible for the DMV to maintain a record of a vehicle garaged in the state with an out of state zip. The relatively high number for Windsor Locks, we think, represents airport rentals. The fact that it is trending slightly downward may reflect Hertz shedding EVs.

Greenwich leads with 2542 EVs. Stamford, Westport, Fairfield, and West Hartford round out the top 5 cities.

Other stats – EVs per capita and EVs as a percentage of all vehicles. We are getting to the point where EVs now make up a measurable percentage of vehicles in some municipalities.

Finally, there is make within city. It required multiple screenshots to capture all the vehicle makes in the legend if you want to decipher the colors in the bars.

A 47% year on year increase in Registrations Still Leaves Us Playing Catch Up

As we recently published, there are 44,313 registered EVs in CT. This includes BEVs, PHEVs, eMotorcycles (eMC), and Fuel Cell (FCEV). The dominant drivetrain is BEV (27,709), followed by PHEV (16,517), eMC (84), FCEV (3). The market has been moving toward BEVs.

The photo at the top of the post looks at the historical trend, the current data point, and what the slope would have to look like for CT to meet its goal of 500,000 registered EVs by 2030. The slope is plotted by calculating a compound annual growth rate from the current level to the goal over the time remaining. This is not the same thing as a forecast.

The good news is that the CAGR works out to a little over 41%, lower than the increase we saw this year. The bad news is the percentage represents a large number of vehicles in the out years. The final year is over 146,000 EVs in that year alone. And that percentage is an increase in net registrations. The corresponding increase in sales would have to be larger to account for turnover.

When the goal of 500,000 by 2030 was set, it was never made clear whether that meant January 1 or December 31. We cut ourselves some slack and used the latter, giving us 7 years to reach that number.

Policy Environment for Used Electric Vehicle Incentives

When the Inflation Reduction Act was drafted, it had multiple goals, which can be loosely summarized as promoting clean energy, reviving the domestic industrial base, and making clean tech more affordable for consumers. Related to that is the Justice40 initiative, whereby the program design devotes substantial resources to direct these benefits to environmental justice communities.

EVs are very much a part of Justice40. Not only are the jobs important, but air quality is often poor in these communities. That is certainly the case in Connecticut with our bad and getting worse air pollution. (The new State of the Air report by the American Lung Association is due out next month. Keep an eye out if you want to get depressed.)

The early adopter profile for EVs, as with many products that represent a substantial purchase, is upscale. Though certainly helpful, new vehicle incentives alone may not be enough to reach a mass market. For EVs to displace internal combustion vehicles at scale, anyone who can afford to own a car needs to be able to afford an EV. The majority of vehicle sales in any given year are used vehicles. According to the Federal Bureau of Transportation Statistics, used vehicles accounted for 71% of all vehicle sales in 2019 (the most recent available data). And so, an incentive for used cars was incorporated into the IRA. The question is how easy is it for the consumer to access it.

Inflation Reduction Act Used EV Incentive Basics

These are the basic rules for the federal used EV incentive.

• Purchase price cap of $25,000.
• Only purchases through new or used car dealers are eligible.
• The incentive is 30% of the purchase price, capped at $4000.
• Purchaser income limit of $150,000 modified adjusted gross income for joint filers, $112,500 for head of household filer, and $75,000 for single filers.
• Income eligibility can be determined by the current or prior year.
• Vehicle model year must be 2 years older than the current model year.
• Transfer provision can be used. This provision is new for 2024 and allows the buyer to transfer the credit to the seller and receive it as a point of sale rebate.
• Minimum battery pack size of 7 kWh.
• No more than one incentive per VIN. As a practical matter, this is a non-issue at this point. The incentives just haven’t been around that long.
• Dealer registration with the Department of the Treasury is required in order for the consumer to receive the incentive. There are specific registrations for both the tax credit and for the transfer.

None of the new car rules regarding domestic assembly, battery mineral sourcing and manufacturing, and foreign entities of concern apply to used vehicles.

Dealer Registration

In order for a consumer to receive the incentive (new or used), the dealer that sells the vehicle must be registered with the Department of the Treasury (IRS). Not every dealership is registered. Unfortunately, there is no publicly available list of registrants, which we regard as a big oversight on the part of Treasury. It is necessary to contact the dealership you are thinking of visiting, though some have proactively advertised their participation. Based on what we have been hearing through our conversations with the Electric Vehicle Association, about half of new car dealerships have registered and a much lower percentage of used car dealerships.

We have heard various reasons why a given dealership may not have registered:

• Dislike of the IRA.
• Not interested in selling EVs.
• Registration declined by Treasury for whatever reason, for example an incomplete application.
• Registration still in process.
• Affiliated manufacturer doesn’t make incentive-eligible EVs so why bother, or why bother just for used EVs.
• Avoidance of non-mandatory involvement with the IRS.

This blog reached out to the two largest used car chains, CarMax, which is the largest by a mile, and Carvana. In both cases, these companies are set up to provide the Time of Sale report so the customer can claim the tax credit, but neither is registered for the transfer. CarMax is at least thinking about it. In their response to our inquiry, they wrote, “…We anticipate developments on the credit transfer in the future.” If we hear about a subsequent update, we will publish it!

Tesla

As with the new vehicle incentives, Tesla is also registered to process both the tax credit and the transfer for used EVs.

Used EVs are an Underdeveloped but Important Market

Our view is that the transfer is very important for the used EV market since there will be a higher incidence of consumers unable to make use of a conventional tax credit. (These tax credits are non-refundable, meaning if you are not able to use it, you lose it, and there is no carry-forward provision.)

We do not have access to a subscription service that tracks vehicle sales. Our very back of the envelope calculation, filtering for vehicles registered in 2023 with a model year of 2021 or older indicates that roughly 5725 used EVs were sold in CT last year. So, not nothing, considering there were about 18,000 overall EV registrations occurring last year.

Private Sale Workaround?

This incentive structure with the registration was designed to work through dealers and does not apply to private sales. However, a company called KeySavvy, which has a dealership license, is offering to facilitate private transactions via its dealership status and does offer the transfer. (We do not have personal experience with them.) This is a sceengrab from their website. If any readers use them, please let us know how it goes.

State Incentive

This article mainly focuses on the IRA, but there is also a CT CHEAPR incentive for used EVs. It is part of the Rebate+ incentives that are available for households with income of no more than 3 times the federal poverty level or that are located in an Environmental Justice or Distressed Community. This is a true point of sale rebate, not a tax credit, and it gets deducted from the invoice price. It is $3,000 for a battery electric vehicle and $1125 for a plug-in hybrid. Rebate+ also offers an added incentive for new EVs and the total of the base and + incentives are $4250 (BEV) and $2250 (PHEV). To avoid a suspenseful purchase experience, consumers can register in advance and obtain a pre-qualification voucher from DEEP. Vehicle eligibility for this rebate is limited to vehicles that were eligible when new. Eligible vehicles can be found on this page of the CHEAPR website. The website also has a link to which communities are EJ/distressed.

Usual Disclaimer: As always, we seek to provide the most up to date information but things change and it is always advisable to check when shopping for a car and to check with your CPA.

Updated Vehicle Counts Released by DMV

The Department of Motor Vehicles has released its semi-annual update of EV counts that carries us through the end of last year. There were a total of 44,313 vehicles registered, up 47% from one year ago. Of these, 43,868 are BEV or PHEV. The detail for the remainder are not reported. Based on historical data, the biggest piece of the unreported vehicles would be electric motorcycles. There are a few fuel-cell vehicles in the state, less than the fingers of one hand. And, most likely, some blank records.

At the moment, we are working with pieces of the picture. We plan to update the dashboard when we get the complete file.

BEVs Continue to Dominate the Market

Tesla Now Has 16,686 registrations

As can be seen in the photo at the top, Tesla continues to be the dominant brand, with Toyota a distant second. Chevrolet is a very distant second when it comes to BEVs. Below are the top 10 makes with values.

This is the comparison when filtered for only Battery Electric Vehicles.

And top 10 BEV makes with values.

This is the comparison for PHEVs.

And top 10 PHEV makes with values.

Below are the major brands with the individual models displayed, ranked most to least registrations. There is a long tail of brands and the small ones are omitted.

Tesla

The Model 3 still leads due to the installed base, but the gap is narrowing as the Model Y has become the company’s best-selling model. No Cybertrucks were registered as of the end of last year.

There were 6029 new Tesla registrations in 2023. That means there was turnover of 1620 vehicles to get to the new net registration figure of 16,686.

Toyota

Toyota has moved into second position on the strength of its mostly PHEV lineup. The new BEV, the BZ4X, is off to a slow start. There are still a couple of the BEV version of the RAV4 around. This was strictly a compliance car and was discontinued years ago. Somehow a couple made it here even though it was only sold in California.

Stellantis

They have a strong seller in the PHEV Jeep Wrangler. The Fiat 500 is the only BEV.

Chevrolet

Chevy places fourth due to the temporarily discontinued Bolt and the legacy Volt. Bolt sales had been trending upward since the release of the EUV version of the vehicle. Then they had an extensive recall. Sales picked up again as they got through it, but GM canceled it. After public backlash, they uncanceled it and it is now expected to return as a 2025 model year vehicle, using the company’s new Ultium platform. Ultium in general has experienced delays, reportedly due to software difficulties.

Hyundai

Hyundai follows, largely on the strength of the Ioniq 5 and early signs of life from the Ioniq 6.

Ford

After strong starts, the company has had disappointing sales of its F-150 Lightning pickup and Mustang Mach-E.

BMW

The largest of the legacy luxury brands and the final make with over 2,000 registrations.

Volvo

Kia

Nissan

Volkswagen

Audi

Rivian

Note the electric delivery vans for Amazon.

Porsche

Subaru

Honda

These are legacy registrations of no longer for sale vehicles. The company has a new BEV, the Prologue SUV, projected to arrive in the next few months.

Mercedes

Mercedes continues the be the laggard among major luxury brands, far behind BMW. Surprising, given the company’s long history of engineering excellence and many announcements about pivoting aggressively to electric.

Mitsubishi

Mini

Polestar

The Polestar 1 was a high-performance PHEV sports car, imported in limited quantity. There are reports of a corporate restructuring with slow sales of the Polestar 2, introduced roughly 3 years ago. Possibly, it will carry the parent Geely brand. Anyway, the website continues to be business as usual as they are taking orders for the launch edition of the Polestar 3 SUV and have announced a Polestar 4 performance sedan.

Mazda

Lucid

Jaguar and Land Rover

These marques were sold by Ford to the Indian company, Tata. Coming soon is the new Jaguar Electric Architecture. The company plans to transition to 100% electric by 2025! Most Jaguar ICE vehicles will reportedly end production around the middle of this year.

Cadillac

Cadillac, like Chevy, is also waiting with bated breath for GM to scale Ultium.

There Are Now 44,313 Electric Vehicles Registered in CT

The updated count includes registrations through the end of last year. It was released by the Department of Motor Vehicles, which is statutorily required to release updated numbers semi-annually.

This is a count of registered EVs and the trend chart above represents a snapshot as of the start of each year. This is different than sales. It includes existing registrations, plus added registrations that have occurred via the purchase of a new or used vehicle, or due to an EV owner moving into the state, less vehicles that have turned over and are no longer registered in CT.

DMV provides nothing in the way of detail on their site, just the overall count. It typically includes battery electric vehicles, plug-in hybrids, electric motorcycles, and fuel cell vehicles.

For all the doom and gloom in the press about people not buying EVs, the number was up a respectable 47% over one year ago. The registrations occurring in the second half of the year were 31% higher than in the first half. And the number of EVs registered in 2023 was 54% higher than the number registered in 2022.

We have published the details about vehicle make and model, city, per capita data, etc. that underlie the total in the past, and we will do so again if we are able to obtain the information.

Fisker Ocean pictured above

Transfer Provision Details

The transfer provision is now in place for the federal incentive. This allows the buyer to transfer the tax credit to the seller and take the incentive as, in effect, a point of sale rebate, even if it technically still is a tax credit. Consumers still have the option to take the tax credit the old-fashioned way if they so choose.

The benefit of the transfer provision is the point of sale immediacy, but also the fact that a consumer does not need to have tax liability in order to utilize the credit. (The tax credit is non-refundable and has no carry-forward provision.) Another benefit of the transfer provision is that if you are financing the vehicle, it lowers the amount of interest paid because you are financing a smaller amount. The incentive does not lower the sales tax.

Dealer Registration

A dealership has to register at a portal created by the Treasury Department. This portal captures the transactions, the associated VINs, and enables the process whereby the Treasury issues reimbursement for the incentive to the seller and verifies the transaction at tax filing time. This applies to both new and used EVs. It also applies regardless of whether you are taking the transfer or the standard tax credit. In other words, if you are counting on the incentive, don’t waste your time speaking with an unregistered dealer.

According to Treasury press releases, about 50% of new car dealers have registered. This could still increase over time. Sellers of vehicles that are not eligible may not have a reason to register at present, though they would still need to if they sell used EVs. Not every dealer who registers gets approved, though we don’t have detail as to why that would be. Buyers of a vehicle from an unregistered dealer only get the standard tax credit.

Only a very small percentage of the 150,000 used car dealers have registered. Big sellers like Carmax and Carvana have not registered. Nor has Hertz which has been selling a large number of used Teslas.

There is no master list from Treasury delineating which dealerships have registered. This is very disappointing. The only option for consumers is to directly ask the dealership. (Some dealerships are advertising their registration.) We recommend making sure a dealer is registered before going there to shop if you are thinking about using the transfer.

The dealer issues a seller’s report for the transfer. You must get this before the car leaves the lot. If you do not, the only option available to you is the standard tax credit.

VIN Verification

Final determination of vehicle eligibility cannot be made until a VIN is available. Hopefully, dealers will be supported by their affiliated manufacturers and be able to accurately represent the status of a vehicle, including build to order.

Used EVs

A reminder, incentive-eligible used EVs must be at least two years older than the current model year and have not previously had an incentive associated with the VIN. Almost no used EVs have received an incentive, so for the time being the prior incentive consideration is largely beside the point. The income limits (see below) are half what they are for new EVs and the negotiated price must not exceed $25,000. Used EVs are eligible for the transfer provision. Hopefully, more used car dealers will register. In the near term, the transfer is more likely to be available from a new car dealer that also sells used EVs.

Battery Rules Lead to a Reduction in Eligible Vehicles

The new rules for 2024 are in effect, specifically higher thresholds for battery critical minerals, battery assembly, and the implementation of the first half of the foreign entity of concern (FEoC) rule. For the FEoC, no battery component assembly can take place in China as of this year.

A car must certified by the manufacturer that it meets the requirements and must appear on the EPA list at FuelEconomy.gov to be incentive-eligible.

It is not a surprise that the number of incentive-eligible vehicles has decreased. We expect a gradual recovery going forward as more North American assembly and battery plants come online, and more critical minerals come from eligible sources.

Income/MSRP Cap

The non-battery-related provisions of the incentive rules remain in place.

The income limit is $300K/$225K/$150K for joint/head of household/individual filers respectively. This refers to modified adjusted gross income. You can fulfill this requirement with either your current or prior year income. There is one exception to this, which is if you get married during the year you bought the vehicle and the income of your new spouse put you over the limit, you would not be disqualified.

The federal incentive has an MSRP cap of $55K for sedans and $80K for an SUV. The definition of MSRP includes factory-installed options but not software.

Discounting

We have been seeing reports that several manufacturers, and we have specifically seen reports of GM, Ford, and Hyundai, discounting vehicles to partially or fully compensate for the lack of an incentive. This is an example from GM Authority. Discounting is even better than an incentive because it lowers the sales tax.

Leasing

None of this changes the fact that these rules don’t affect leases. The finance company that holds the lease receives the incentive and it is not subject to battery, assembly or any other rules. The lessor is not required to pass the incentive to the consumer. And leasing costs tend to be opaque due to the different factors that determine them. That places a greater burden on the consumer to obtain the specifics of if/how the incentive is incorporated into the monthly rate. All of that said, however, EV leasing has shot up rapidly, as can be seen in this chart from The Peterson Institute for International Economics, using data from Edmonds. The biggest increases are from non-North American brands, so apparently, the incentive is getting passed along.

Advanced Clean Cars II Campaign

The bureaucratic term of art for the air quality in Connecticut is non-compliant. Yes, it’s dirty. We do not meet the requirements of the EPA clean air rules. Transportation is the most polluting sector and the easiest to decarbonize. The technology is here. It is steadily declining in cost. The ACC II regulations, the follow on to the first set of California standards, will get us there faster and with better consumer protections.

With the fate of this program hanging in the balance, and a concerted push from fossil fuel interests to kill it, the advocates have placed ads in local newspapers, billboards, and on chargers that accept ads. This is the ad that appeared in the CT Post. If you are concerned about cleaning up our air by accelerating EV adoption, please tell you state legislators. They need to hear from you now.

Also, see our op-ed in the CT Mirror.

Post by Barry Kresch

Can You Recommend a Dealership?

It is a common query we get. A consumer is shopping for an EV that isn’t a Tesla, Rivian, or Lucid. Maybe they had a poor dealer experience or their friend had a poor experience. Either way, they don’t want to waste their time walking into a dealership only for a salesperson to try and switch pitch them to ICE. That is by far the biggest complaint we hear. Followed by dealers who are clueless about EVs generally, don’t have a vehicle charged for a test drive, whose one EV expert “isn’t here right now,” or don’t know the incentives.

Using CHEAPR as a Proxy

While we have had personal interactions with some dealers, there are 270 licensed new car dealers in the state and we certainly don’t know all of them. Our workaround is to use CHEAPR rebates as a proxy. It isn’t perfect as some dealers do not sell CHEAPR-eligible vehicles. (The CHEAPR program has an MSRP* cap of $50,000.) And some manufacturers barely make any EVs. But for certain makes, it works well. We sort the data by make and compare like to like.

This information was compiled using data from the CHEAPR portal through December 21. There were 3677 CHEAPR rebates awarded in 2023 to this point. The program has been running pretty hot. Of these, 2022 were for Tesla and the remaining 1655 were spread amongst the other makes.

While we don’t quite have the entire year, we do have plenty of data to portray the good, bad and the ugly. As we have seen in past years, some dealers do a great job and some don’t even seem to know how to spell “EV.” There may be (and probably are) dealers for a given make that do not appear in these charts. That would happen if they had zero rebates.

Both battery electric vehicles (BEV) and plug-in hybrid vehicles (PHEV) are included in the data. The first chart is the number of rebates by make for non-Tesla brands, followed by dealership detail for all makes with a minimum of 10 rebates, listed alphabetically by make.

*The MSRP cap in CHEAPR is the base price of a given trim level, before options.