Rebates Spike in March, but Program Still Underspent

Rebates awarded under the state EV purchase-incentive program spiked to 151 in March, double that of the (slightly restated) number of 75 for February. This was part of the standard monthly update by DEEP.

There were increases across the board, which could be reflective of the economic recovery, but certainly, something to watch.

The most rebates again went to the Toyota Prius Prime with 33, up from 22 in February. This was followed by the Tesla Model 3 with 31, up from 2. The Model 3, as we’ve seen before, is volatile since only the base trim level is eligible. The only other vehicle to hit at least 20 was the Chevy Bolt at exactly that number. Most of them were the 2020 Bolts which GM has been heavily discounting.

The other vehicles in double digits were the Toyota RAV4 Prime (18), Hyundai Kona (15), Nissan Leaf Plus (11), Tesla Model Y (10). The Leaf Plus is the longer-range Leaf. The appearance of the Model Y is ephemeral as the standard range option is no longer being made available by Tesla. That may change, but we have no information on whether that will definitively happen or what the timing may be.

There is still no word on the implementation of the new CHEAPR program with higher rebate levels and new, income-limited incentives. We have been advised that the board has not been able to sync schedules for a meeting to review the new material, nor do we know if the consultant has finished with the software development. We asked DEEP if they could give us a rough estimate, but have not received a response.

Spend Level Remains Low

It has been our expectation that the program would underspend again in 2021 and that was when we expected the new program might be live by early April. After 1 quarter, the spend is $310,500 against a statutory pace budget of $750,000, and an actual pace budget (including the rollover of unspent 2020 funds) of $1,300,000.

Some Stellar Performers; Many Also-Rans

We obtained an updated dataset of CHEAPR rebates by individual dealerships from the program’s inception through the end of 2020. It is all pasted below, but a couple of observations first.

There are a small number of dealers that really do great work. Unfortunately, they are not representative. If great work is defined as 100 or more rebates over this duration, these are the 6 companies that have achieved that level.

• A-1 Toyota – 167
• Richard Chevrolet – 126
• Honda of Westport – 126
• Karl Chevrolet – 122
• Lynch Toyota – 117
• Ingersoll Auto of Danbury – 101

This project originally began due to member complaints about poor dealership experiences, followed by a request: Please make a recommendation. I had anecdotal reports of dealerships that do a good job, but nothing systematic or statewide. This approach uses CHEAPR data as a proxy for EV-friendliness.

There are a few considerations to bear in mind. Not all dealers sell CHEAPR-eligible cars. The parameters of the CHEAPR program have changed over the course of the program’s life. In particular, the lowering of the MSRP cap in October 2019 causes the exclusion of some vehicles, for example, from BMW and Volvo, that were formerly eligible. The offerings of manufacturers have changed over time. The cancellation of the Chevy Volt caused a slowdown in the number of Chevrolet rebates. Hyundai has become more aggressive recently about introducing EVs. The Honda Clarity got off to a good start when it was introduced, but Honda then stopped sending it to the state (which may be changing). The new Toyota RAV4 Prime is showing some early promise.

It is for that reason that I have displayed the rebates sorted highest to lowest within make. That way, for example, it can be seen that Danbury Hyundai has a strong record with a make that was barely selling EVs before 2019.

The file that was provided did not have the specific vehicle model for which a given rebate applied. There are some dealerships that sell multiple makes that have CHEAPR-eligible vehicles. I made a judgment and assigned the dealer to the brand with the most rebates. Note to self – work on getting that next time around. Also, in a couple of cases, there may be more than one line for a dealership because the file did not have a consistent naming convention. I cleaned it but may have missed a couple.

This is all of it (except Tesla). If a dealership had zero rebates, it will not appear in the tables below.

It would be best, of course, if DEEP were to publish this information as part of its regular CHEAPR reporting. It is done in other states and would remove the burden for both of us of going through the Freedom of Information Act process.

Finally, this has relevance for the EV Freedom Bill. One of the arguments for the bill is that the conventional dealership model is antithetical to selling EVs, that EVs come into tension with the legacy ICE business. There is more nuance to it than that, but the data largely illustrate this point. It seems like it is a lot harder for a dealership to embrace EVs or more of them would have effectively done so and there wouldn’t be such large differences between the top performers and the laggards.

For those dealerships that are making an effort to sell EVs, if SB 127 passes, they’ll be fine. For the others, it will be a shot across the bow to wake up or risk being left behind.

A poll released by the Electric Vehicle (EV) Club of Connecticut shows that a significant majority of Connecticut residents support direct sales from Electric Vehicle companies. 83% of respondents support direct sales of electric vehicles to consumers, and only 17% oppose it.  Support for direct sales is bipartisan, broad, and deep across many different demographics and all sections of Connecticut.

Support for direct sales is growing throughout the state of Connecticut and nationwide. Last week, two letters were released—one from a broad coalition of 27 interest groups representing environmental, free-market, pro-innovation, labor, and consumer protection;  another from 75 leading academics—both urging state governments to remove restrictions on direct sales and service of electric vehicles. Among the academic signers of the letter were 7 former chief economists of the Federal Trade Commission and Department of Justice, and one Nobel Laureate.

Transportation Committee Chair Senator Will Haskell stated, “This poll is astounding. It turns out that the Connecticut State Capitol is the only place where selling Electric Vehicles directly to consumers is controversial. It’s time for the legislature to listen to the will of the public, pave the way for 21rst Century jobs, and give consumers a choice as to where they buy their next car.”

Barry Kresch, President of the EV Club of Connecticut noted, “These results, while overwhelmingly favorable, are not a surprise. This is exactly what I hear all the time on a more informal basis. It is reflected in the fact that everyone who testified at the public hearings who was not associated with a dealership was in favor of the bill. I get asked all the time why we force people to go out of state to buy the EV of their choice. It’s time we listen to consumers, accelerate EV adoption, and embrace innovation.”

“The poll conducted by GQR is proof positive that Connecticut consumers believe in the freedom to choose how they wish to purchase their vehicles,” said James Chen, Vice President of Public Policy at Rivian Automotive. “Senate Bill 127, which would allow the direct sales of electric vehicles in the state of Connecticut would be an obvious win-win for Connecticut drivers, the free-market, and the state’s environmental goals.”

GQR conducted a survey of 500 likely 2022 general election voters in Connecticut from April 16-18, 2021. The survey was conducted via cell phones using a text-to-web platform. The margin of error is +/- 4.4 percentage points at the 95 percent confidence interval; the margin of error is higher among subgroups. Electric Vehicle (EV) manufacturers Lucid Motors, Rivian, and Tesla sponsored the poll.

This is the question wording: “As you may know, the Connecticut General Assembly is considering a bill to change existing laws related to vehicle sales. This bill will allow electric-vehicle manufacturers such as Tesla, Rivian, and Lucid to open their own brick-and-mortar stores in the state, where they can sell vehicles directly to consumers rather than going through traditional car dealerships. Do you support or oppose this bill to allow direct sales from electric-vehicle manufacturers in Connecticut?”

About GQR: “For almost four decades, we have used innovative polling and opinion research to help leading candidates, parties, government leaders, corporations, and advocacy groups across the United States and around the world.”

Transportation Committee Vote Moves Bill to Full Chamber

The Transportation Committee, by a vote of 26 to 10, moved SB 127 to the full chamber.

There were several legislators who voted in favor of the bill, but who specifically said they have not definitively made up their minds with respect to the upcoming vote on the floor of the chamber. We will publish some of the questions and objections when we update this post.

Transportation Committee Chair, Senator Haskell, deserves our thanks for his leadership in picking this up and moving it forward, after his predecessor on the committee had decided to set it aside. We also thank Rep. Steinberg who has been a consistent advocate for years in favor of this measure.

This is the final roll call.

What I inferred from the hearing today reinforces what I watched/read during the public testimony period. Legislators are hearing from dealers, of course, who oppose the legislation. They are also hearing from constituents and constituents are supporting the legislation. There is no negative sentiment among the public about this bill.

We don’t take anything for granted. When we have updates with respect to further negotiations around the bill or voting in one or both chambers, we will post them (among other things).

Tesla is keeping its “Engage” page live for ease of contacting your legislators.

Club Member Marshall Breines Takes Delivery of First CT VW ID.4

With much of the club’s recent efforts to support the passage of SB 127, allowing for direct sales of EVs in CT, we don’t want to overlook numerous EV launches planned for 2021.

The Volkswagen ID.4 is a critical piece of that company’s plan to revive itself following the Dieselgate scandal that has cost the company billions of Euros in fines and reputational damage. This is the first EV for the American market to be built on VW’s new Modular Electrification Toolbox platform. (VW introduced a smaller model, the ID.3, in September to great success in Europe but is not bringing that vehicle to the USA.)

As batteries get more efficient, EVs are beginning to move into the segments comprised of larger vehicles, such as EUVs (Electric Utility Vehicles), which is what the ID.4 is, and pickup trucks (and heavy-duty commercial vehicles).

The vehicle pictured above is a “first edition,” a fully-loaded, limited production model. It was sold out on its first day of accepting orders. These are the only versions of this vehicle arriving in this country for the time being. We expect deliveries of the standard version of the model to begin arriving in 3-4 months.

Marshall gives his ID.4 a strong review, “A great example of building a really well done SUV with lots of room, comfortable ride, and great fit/finish with well-done info system and all the tech needs one wants. You don’t think it’s an EV! Highly recommend for people first getting into an EV.”

The ID.4 is EPA rated for 250 miles of range. Marshall reports that his early experience slightly exceeds that in mostly local driving.

For a more in-depth review, Larry Thompson interviews Marshall in this video.

More photos of the ID.4 taken by Paul Braren:

Press Conference on March 22 for SB 127

The office of CT Senator Will Haskell is organizing a press conference for Monday, March 22. It will be held outdoors at the Westport Train Station (New Haven-bound side) at 10 AM.

UPDATE: LUCID VEHICLE (pictured above) EXPECTED TO BE BROUGHT TO THE PRESS CONFERENCE.

All EV owners are invited to join us and spread the message that consumers should be able to buy the EV that fits their lifestyle and budget, and be able to do so in CT.

SB 127 would allow manufacturers of exclusively EVs that do not have a franchise dealer network to open stores in CT, which is one of a handful of states that currently prohibit this. Check out this video made by Will Cross of the CT Tesla Owners Club.

Even if you can’t join us, please write to your state senator and representative and tell them you support this bill.

Tesla has put up a page that enables one-click contact for your rep. (You may need to create an account.)

This is an earlier post that goes into more detail about the details of why we support this.

Post by Barry Kresch

Estimates of EV Fleet Composition by Make Within City

This is something we haven’t published in a while. Not that we don’t find it interesting, but the DMV broke apart the geo from the vehicle data and has been giving it to us in a separate file. So we lost this. Their reason was that it was too close to the line of a privacy violation, that if we were to cross a low-volume vehicle with the city, someone could deduce who the owner might be. (We don’t get any personal information in our files.) While I respect their concerns, it never created any issues back when we did have it.

So I took a shot at knitting the information together and here it is. So remember: blame me, not the DMV. I was able to do a little bit of cross-referencing with the Westport Grand List and what I saw lined up nicely.

The chart at the top of the post color-codes the different makes within each city. It is easy to guess which part of the bar is Tesla, but beyond that, it can’t really be seen in a screenshot. This is now a page in the dashboard (page 19 – scroll down for page nav) and there is full interactivity. Slicers are there for both city and vehicle make. Hovering over a chart element will display the make and the count. And the profile changes quite a lot when sliced by city or make as a different socio-economic profile will be reflected in a different vehicle composition.

The two most widely registered Marques are Tesla and Toyota. Here is an excerpt of the Tesla profile:

And here is how it contrasts with Toyota, where there is less Fairfield County and more larger cities:

Sometimes it appears as if the profile could be influenced by a single dealer. Dealers are often a pain point in the EV landscape, but that is not the case for all of them. This excerpt is Audi, which, overall, has a fairly low volume. Of course, people can buy their vehicles from someplace other than where they live. But it sure seems like New Country Audi in Greenwich might be making a difference.

The same seems like it could be true of an even lower volume make, Jaguar, where Westport is over-represented. There are Jaguar dealers in Fairfield and Darien. The Fairfield dealer has been a sometime attendee at our meetings and they could be the ones making an effort with the i-Pace.

Finally, this is a close-up of a single city, in this case, Greenwich, which has the most EVs of any city in the state. The green represents the 651 Teslas there. The second most-widely registered vehicle make is Porsche with 69 EVs. This is the purple band a couple of places below Tesla. There are 969 total EVs in Greenwich, an increase of 105 over the final 6 months of the year, or 12.2%, which outpaces the rate of increase for the state as a whole.

The Equivalent Of 52% of EVs Added To The File in 2020 Turned Over

EV registrations in Connecticut increase 18.2% in 2020, a not great number in a very difficult year. However, as difficult as the year may have been, CT can be its own worst enemy with no direct sales and an underperforming purchase-incentive program. The chart below breaks this into the first vs second half of the year, clearly showing the effect of the lockdown followed by a modest recovery.

In January 2020, there were 11,677 EVs registered in the state. 4408 vehicles were added to the file over the course of the year. But we ended the year at 13,800. In other words, there were 2285 EVs that left the file. The numbers varied considerably by brand. Tesla had the lowest percentage of the major brands with the equivalent of 33% of the incoming vehicles turning over. Honda had the highest percentage, and off-the-charts 462%. Which makes sense, since Honda basically stopped selling its one plug-in model, the PHEV Clarity, in 2019. (We hear it is coming back.) As cars were sold or leases expired, no replacements were entering the fleet. This table lists the top makes, ranked by the number of EVs registered on January 1, 2021.

The same data drives the chart at the top of the post. Each of the components is its own bar. The table and the bar chart come from the EV Dashboard, where they have full interactivity and slicers.

The obvious question is why the differences. We can try to infer. Some of it may have to do with leasing. A dealer on the CHEAPR board meetings reports that leasing is 50% of his new car business. That is higher than the national norms we’ve seen in Statista and other sources, but there is no doubt that leasing is big. Tesla came late to leasing and has yet to offer a buy-out option. And their cars have longevity. It is quite possible that a higher percentage of buyers equates to lower turnover.

One comment mentioned by a dealer during a CHEAPR board meeting bears repeating. This person said that a significant portion of EV leasing customers coming to the end of their lease return to ICE in order to save money, especially given that they cannot get another CHEAPR incentive due to the program’s once per lifetime limit. His suggestion: allow leasing customers to get the incentive twice but cut it by 50%. It’s a thoughtful suggestion and would also have the benefit of lowering the program’s burn rate for 2-3 years until it normalizes.

Aside from leasing, there is sales volume. Chevrolet and Ford, which are the largest brands with net negative registrations (i.e. turnover in excess of 100%) similarly suffer from a variation of what is happening with Honda, namely cancellation of nameplates coupled with a lack of other sales volume to replace the departing vehicles. In the case of Chevy, the near-term recovery plan is a redesigned and lower-priced Bolt and a reasonably priced EUV Bolt variation. We’ll know at the end of the year how these will have fared. Ford, on the other hand, has what may be a significant win with the Mach-E, the EV crossover Mustang. There is a limited production run in 2021, which has been reportedly sold out (with dealers tacking on extra markup as reported in Carbuzz.com).

Similarly, the 99% BMW turnover and the 84% Nissan turnover indicate stasis. On the flip side, low turnover from Hyundai, Porsche, Volvo, and Audi could indicate some renewed vigor. Sales volume for the Audi is currently very low, but an ultra-premium brand like Porsche, placing in 9th position, indicates some success in a niche market. However, there are a lot of cars vying for this small segment, with the new Tesla Model S Plaid, for which it is too soon to have registration data,  the presumptive early favorite.

Higher Incentive Levels, Low MSRP Cap, New Income-Limited Incentives

Note: This page is updated to note that the new incentive levels have been implemented as of June 7, 2021. The CHEAPR home page has been updated but we think the explanation below is clearer. If you do look at the CHEAPR page, please ignore the $9500 incentive headline. Nobody will get that level of incentive. It would only apply to an income-limited individual buying a fuel-cell vehicle this year, which is ridiculous since there aren’t any fuel-cell vehicles for sale in the state, and how would an income-limited individual afford an expensive fuel-cell vehicle.

An updated set of rules was adopted by a 6-3 vote of the CHEAPR board that supersedes the last rule change made in October 2019. Here are the most relevant changes:

BEV = Battery Electric Vehicle, PHEV = Plug-in Hybrid Electric Vehicle, MSRP = retail price

Major Changes

• No difference in incentive levels based upon EV range.
• Higher incentive levels for the remainder of 2021.
• New income-limited incentive for used EVs
• New income limited supplemental incentive for new EVs
• Likely effective date is on or about April 1.

There is no longer a difference in the size of the incentive as it relates to the range of any given BEV. Incentives are higher across the board. The MSRP cap was left unchanged at $42,000. There are new income-limited incentives for used EVs and a supplemental incentive for new EVs. The supplemental gets added to the base incentive for qualifying income-limited individuals buying a new BEV or PHEV. There is no MSRP cap for a used EV.

The CHEAPR incentive limit has been increased to twice per driver per lifetime. And the clock resets as of June. If you already received a CHEAPR rebate before then, you are entitled to two more. (It is different than the federal tax credit which can be used each time someone buys or leases a new EV.)

Other CHEAPR Program Details

There is still a fuel cell incentive and the MSRP cap for an FCEV is still $60,000, though there is none of that type of vehicle being brought into the state presently.

Dealers receive an incentive of up to $125. This, once upon a time, was higher. DEEP, in its analysis for its EV Roadmap, questioned whether the dealer incentive accomplished its objective because most of the time it was not being passed along to the salesperson, which was the basic idea. However, it remains in this reduced form.

Income-Limited Incentives and Eligibility

The incentive for a used EV applies to purchases from a licensed dealer. This applies to any dealer of used cars, not just new car dealers that also sell used vehicles. It does not apply to private sales.

An individual’s eligibility for the income-limited incentive is determined by whether that person is already participating in certain assistance programs. Administratively, this is simpler than performing an income verification, but it still takes a few steps and involves a lag in receiving the money. These are the programs that are determinative:

Unlike the way the primary part of the program works, where it can be cash on the hood, the buyer completes an application to confirm eligibility based on one of these programs. DEEP estimates that it will take about a month to process the paperwork at which point a rebate check will be issued. This process can be done online (desktop or mobile) or via postal mail. This is the workflow:

Since nobody wants an applicant to get a surprise denial, DEEP promises outreach and education so that buyers understand what is involved and whether they qualify before filling out the application.

Incentive Structure

As noted in the table at the top of the page, someone buying a new BEV will receive a $2250 incentive. However, the way it is actually structured is that the base incentive of $1500 from the current program is actually retained and a “stimulus increase” of 50% is added to it. This additional stimulus is earmarked for calendar 2021, funds permitting. It will be tracked and reviewed regularly. This is why you get that odd $1125 number for a used PHEV. The base is a more neatly rounded $750. Each incentive size will then revert to its base level in 2022. We will update our information as it gets confirmed closer to the end of the year.

Start Date

The changes take effect as of June 7th, 2021. The income limited used and supplemental incentives are now ongoing, but the higher incentive levels may revert to the old levels at the end of 2021.

Our Take

The Connecticut EV Coalition made a proposal to the board that would have raised the stimulus to $2500 for BEVs and the MSRP cap to $50,000. The incentive including the stimulus adder is close to our proposal but the MSRP cap remains at a level that excludes too many vehicles. According to Cox Automotive, the average cost of an EV is $55,600. MSRP caps exist in other states but at much higher levels: MA – $50,000, NJ – $55,000, NY – $60,000. Given that the program was about 70% underspent in 2020, we expect it will underperform in 2021, though to a lesser degree.

We like the introduction of the equity aspect of the program, particularly the used EV incentive, as this market is not well-developed.

This structure of an incentive plus a stimulus adder is not the most consumer-friendly formulation. This allows the incentive to revert to a lower level after this year without making a formal change to the program. It is administratively convenient, but it has the potential to be confusing. To the consumer, it will still be a change. We think the incentive should be the incentive and if it needs to be changed, it needs to be changed.

The fuel cell incentive is there because the state is trying to be supportive of this industry. We are not sure if there will be a compelling and cost-effective case for hydrogen in light-duty vehicles, especially green hydrogen. Be that as it may, our main issue with this is the way it has consistently been used as a misleading headline. It has now been made even more misleading.

Rivian mobilizes reservation holders for support

For those holding reservations for an electric pickup truck or SUV from new EV-exclusive manufacturer Rivian, where and how they will get possession of their vehicle when deliveries begin later this year remains unknown. Like Tesla, they are going the direct sales route. Unlike Tesla, they are just getting started and running the direct sales gauntlet in many states across the country. The issue is once again before the legislature in CT. This club supports it (SB 127). Below is the text of the letter sent by Rivian: