Open for Business – Tesla leasing in Milford

Tesla held its official kickoff of leasing vehicles directly to customers from its service center in Milford, CT.

The festivities opened with Mayor Ben Blake of Milford touting that the town has more EV charging stations than any town in CT and is the supercharger capitol of the state.

Bruce Becker, president of the EV Club of CT, moderated the event, noting that Tesla accounts for the majority of the increase in EV registrations year over year.

There were also speakers from CT DEEP, The Sierra Club, and the CT League of Conservation Voters.

Prospective leasing customers are permitted to take a test drive.

It is technically called a demonstration drive, and the wording in the liability release is a little different reflecting the fact that it is in the service of a prospective lease, but it’s a test drive.

The first step to direct sales?

Tesla is still not permitted to sell directly to consumers, unlike in our neighboring states of New York, Massachusetts, Rhode Island, and, for that matter, the majority of the country. What prevents Tesla from doing so are the so-named dealer franchise laws that were written decades ago to protect the dealerships from their own affiliated manufacturers. Those old laws did not address leasing which didn’t exist. Nonetheless, Tesla was careful, making sure they were legally buttoned up before taking this step. To be sure, this is only a first step, a foot in the door toward changing the law to permit direct sales. With other EV companies preparing to sell directly to consumers, if we in CT want to make a significant impact on emissions reduction, if consumers are to be given choice, it is only a matter of time.

Further coverage can be found in this article in the New Haven Business Journal.

WNBC-TV, New York, sent a news crew at the crack of dawn on Feb 5 to video the Police Model 3 Vehicle and speak to Westport First Selectman Jim Marpe.

The station’s news personnel arrived before sunrise, making the lights on the Model 3 seem that much more dramatic. They spoke with the police and First Selectman Jim Marpe about the town’s thinking behind the pioneering decision to incorporate a Model 3 into the police patrol car fleet. This was organized with the help of Sustainable Westport.

This is the link to the WNBC website for the report.

New Tesla Police Squad Car is on Duty

Today, Feb. 5, 2020, marks the official entry into duty for the recently acquired Tesla Model 3 police cruiser.

The vehicle was acquired in early December and since then has been undergoing the necessary customization for law enforcement, followed by a period of testing by the police. The information below comes from a phone call with Chief of Police, Foti Koskinas.

The customization, performed by Whelen Engineering and Fleet Auto Supply, in cooperation with Tesla, while a lot of work, has turned out extremely well and the testing has exceeded expectations. The car has racked up about 600 miles during the testing phase.

Use of Native Tesla Tech Has Saved Money and Improved the Model 3 Police Vehicle

The police are able to make use of the Tesla headlights and brake lights. The other electrical gear, such as the police lights and siren, has been wired directly into the 75-kilowatt-hour battery (as opposed to the 12-volt battery). This means that adding another 12-volt battery to support those items will not be required. (A conventional police vehicle comes with an oversize battery and heavy-duty alternator).

One of the questions about going this route was how much of a reduction in range would be caused by this. And the answer, based on the testing, is that it turns out to be negligible. With today’s technology, such as LED lights, the power drain is small.

With Tesla’s cooperation, the police are using the sentry cameras that come with the Tesla, meaning that they will be spared the approximately $3,000 expense that is normally incurred to add this to a police cruiser. And the Tesla cameras are of superior quality than what they would otherwise get.

When we wrote an earlier blog post that discussed these things, the outcome was still speculative. We are happy to report that it is now a done deal.

There remains an open question about whether the WPD will be able to use the Tesla computer for their purposes. It is the most complex part of the integration and will simply take more time to figure out if and how it can be done with adequate protections for each party. In the meantime, the vehicle is outfitted with a tablet and a modem.

Tesla Model 3 Police Vehicle Safety Advantage

A speeding driver passes a stationary patrol car. This is a common enough occurrence and the average person may not give it much thought. But the police do. The patrol car has to accelerate rapidly, move into traffic, possibly cross lanes, and drive at a speedier speed than the speeder in order to overtake and then pull over the driver. All of which carries with it an increased level of hazard for the officer and the public. With instantaneous EV torque, and of course, Tesla building very fast EVs, less time is needed to reach the offender, and lower average speed is necessary, thus reducing the degree of hazard during these maneuvers.

This safety advantage of the Model 3 was characterized by the police as a big win. (Also, in a conventional car, when the accelerator is “pinned,” the fuel-efficiency drops to around 8 miles per gallon.)

We have been advised that Elon Musk himself has seen and praised the modification, saying this is what a Tesla Model 3 police vehicle should look like.

In case you were wondering…

The response from the officers has been enthusiastic with requests to be assigned to this car.

No autopilot. The insurance company won’t go there.

The vehicle has been equipped to make a noise while driving at low speeds as a pedestrian precaution. If you would like to know what a spaceship sounds like when it is powering up, come listen to this car. We have also heard other descriptions of it. Listen for yourself on Feb. 20.

The Westport Police will be bringing the vehicle to the club meeting on Feb. 20. See the home page for details.

EV ownership remains concentrated in Fairfield County.

The county is home to 41% of all EVs registered in the state.

EV Ownership by City

It follows then that the cities with the highest EV ownership are mostly in southwestern CT. Greenwich, Stamford, and Westport are the top three. The following chart is an excerpt displaying the highest-ranking cities.

EV Ownership by City, Per Capita

When the data are normalized for population, the ranking changes with Westport being number one, followed by Weston and Woodbridge.

Map of EV Ownership by City

This is what it looks like pictorially. The bubbles represent cities and the size of the bubble adjusts based on the number of EVs registered in each city.

BEV Registrations Move Ahead; PHEV Growth Soft

In response to our standing Freedom of Information Act Request, the CT Department of Motor Vehicles has provided the EV Club with an updated file of EV registrations as of Jan 1, 2020.

The DMV publishes topline registration data on its website, but this is the only place where detail about these registration data is available publicly and for no charge.

The data from the DMV include make, model, model year, and fuel type. Keep in mind that each data point is a snapshot of registered vehicles at the time the file was generated. This isn’t vehicle sales. It includes all EVs, whether acquired new or used, whether purchased or leased.

Battery Electric Vehicles (BEV) Responsible for Increases

There were striking differences this year by fuel type, something not seen in the past. BEV registrations rose 47%, while plug-in hybrids (PHEV) registrations increased only 8%. This is in stark contrast to the pattern one year ago when PHEVs had more momentum. (There are also small numbers of battery electric motorcycles (BEMC) and Fuel cell (FCEV) vehicles). BEVs now make up a majority of BEVs.

This is the overall trend over the four years of data points we have. The relatively strong BEV number, when blended with the other fuel types resolves to a 26% increase, lower than one year ago. According to the DMV, there were 4120 new EV registrations, which means there was turnover in the fleet of 1732 vehicles.

The landscape for EVs was less forgiving in 2019. Nationally, 2019 saw a year over year decrease in new vehicle EV sales for the first time. Several states have imposed EV fees in the hundreds of dollars in the guise of a “road-use tax.” In CT, Tesla is still prohibited from opening stores, though they have recently obtained a leasing license for their one service center. The CT EV purchase incentive program, CHEAPR, saw cuts made to both the level of incentive and the MSRP cap that determines vehicle eligibility. These changes brought about a 71% decline in rebates. This correlated with weaker growth in the second half of the year relative to the first half (and ran counter to national sales trends). Also, Tesla and General Motors were in the phase-out period for the Federal tax credits. The tax credit for Tesla ended entirely as of December 31. As of March 31, 2020, it will end for GM.

Rate of increase slowed in the second half

Trend by Make

The only EV make to have a significant impact on the numbers was Tesla. The chart below shows the 4-year trend of registrations by make. It is truncated to make it more readable. As you can see, a small number of makes are responsible for the bulk of the registrations.

This is a chart of the current registration profile.

This is a chart that depicts the contribution to the change for the last year by each make. Tesla accounts for 65% of the increase in registrations. This was followed by Hyundai with 9% and Toyota with 6%.

Trend by Model

If there is a single story about 2019, it is the Tesla Model 3. It accounted for 84% of the Tesla increase. Even though it has only been in the market for about two years, it has become the most widely registered EV in the state, 38% higher than the Prius, which is the second-highest. For our purposes, we combined the Prius Prime with the older plug-in Prius.

Model 3 registrations increased 127% this year vs. last. The Model X had a 33% increase on a lower base. Among the other leading EVs, the Prius, Model S, Honda Clarity, Nissan Leaf, and Chevy Bolt all had more modest increases. The Honda Clarity had a big jump a year ago, but we have read reports that Honda has pulled it back from most states, and this is reflected

2019 was the year that General Motors discontinued the Volt, which at one time, had been the most widely registered vehicle. Volt registrations declined 1% as the car now begins its gradual fade from view. This decline in the Volt, along with the softer performances of the Prius and Clarity, and no new PHEVs making much of a splash are what is behind the low PHEV increase.

The chart displayed below is an excerpt of the most widely registered models for display purposes.

The CT Green Bank Financing Program for Commercial Properties Offers Free Charging Stations

Get your energy-saving upgrades with a side of charging station.

The CT Green Bank offers a 100% financing program for energy-saving upgrades to commercial buildings that goes by the acronym C-PACE. They have introduced an offer that, depending upon how much is financed, includes free charging stations. A minimum financing amount of $150,000 will get you one free charging station. The maximum number available through this offer is 3. This is the link to the program page on the Green Bank Website. This is an article in the New Haven Business Journal with a more detailed description.

Those interested must apply for C-PACE financing by May 15 in order to qualify for the charging station promotion.

C-Pace financing offers a number of advantages, including off-balance sheet treatment for the property holder and no inter-creditor agreements, among others.

If you are interested in this financing, do not contact the Green Bank. It is necessary to work through an underwriter. We happen to have one who is a club-member: CounterpointeSRE. Contact Marshall Breines at mbreines@csre-corr.com

EV Growth Slowed in 2019

We like to cheerlead as much as the next person, but the slow 2019 growth in the EV fleet in CT is not something over which to turn cartwheels.

The Department of Motor Vehicles (DMV) has just released its topline Jan. 1 EV registration stats. There are 11,677 EVs registered in CT. (The definition of EV includes battery electric vehicles (BEV), plug-in hybrid vehicles (PHEV), fuel-cell electric vehicles (FCEV), and electric motorcycles (BEMC)).

The 11,677 represents growth of 26% over the course of 2019, well below the 78% growth rate in 2018. This mirrors national data, where sales of new EVs (as opposed to our number, which is registrations) suffered the first year-over-year decline since the introduction of the modern EV 10 years ago.

There were 4120 newly registered EVs. Keep in mind that these could be purchased or leased, new or used. However, there was a turnover of 1732 vehicles, leaving us with 2388 net new registrations.

Tesla Provided the Only Serious Growth

The only somewhat bright spot was Tesla, which accounted for 65% of the growth, most of it due to the Model 3.

Mixed Picture on Policy

From a policy perspective, there is a decidedly mixed picture in CT. While many officials talk supportively about EVs, there are still no direct sales permitted (which going forward will affect new EV brands, not just Tesla), and DEEP cut the CHEAPR incentives in October. The latter is likely a contributing factor as to why the growth rate in the second half of the year was 50% lower than the first half.

This blog receives detailed data from the DMV regarding each EV in the state, and a more thoroughgoing analysis will be published once we process those data.

Changes to CHEAPR = large decline in rebates

Club-member, Barry Kresch, penned an Op-Ed that was published in the Hartford Business Journal that discusses the early data regarding the impact of the way DEEP changed the parameters of the CT CHEAPR EV incentive program, and why rebates declined 71%. (This blog has also posted a couple of earlier entries about it here and here.) The incentive was lowered to a maximum of $1500 for a BEV and $500 for a PHEV, and eligibility restricted only to vehicles with an MSRP of no more than $42,000. The lower MSRP cap caused rebates for the Tesla Model 3 to practically disappear, but the effect goes deeper (pun intended).

The word count is constrained for these Op-Eds and the format does not permit graphical exhibits, so this post will be used to expand on a few points. First, these are the graphics from the CHEAPR stats page reflecting the pre and post periods relative to the date of the incentive changes (the incentive change was 10/15). The date range appears in the upper right portion of the image.

While most of the decline was Model 3 related, other vehicles were also affected. We note the steep falloff in the Chevy Bolt. The premium version of the 2020 Bolt begins at $41,985. Bolt rebates declined from 27 to 4. The BMW i3 no longer appears, and it had 2 rebates in the “pre” period. The Nissan Leaf declined from 16 to 4, and it is possible to exceed $42,000 with a Leaf Plus.

If the lowering of the price cap was intended to avoid subsidizing more affluent buyers, this is belied by the fact that the cap on fuel cell vehicles was raised to $60,000.

Massachusetts Incentive Program

As a point of comparison, the Massachusetts incentive program (back online after a brief hiatus) has incentives that are more generous than CHEAPR before the changes. The max incentive for a BEV is 67% higher at $2500. The PHEV rebate is triple CT at $1500 but the vehicle must have an electric range minimum of 25 miles to be eligible, which we think is a sensible requirement. Importantly, there is a price cap and it is $50,000, the same as CT before October 15th.

Current Incentive Structure Penalizes BEVs

We would like to underscore an important point. Batteries are the most expensive part of an EV and the lowering of the price cap, based on the above data, clearly tilts the incentives toward PHEVs, which have increased from 15% to 64% of the rebates. This works against maximizing the reduction of greenhouse gas emissions.

Do Incentives Work?

We have been asked this question. Perhaps what is still the best (and most extreme) example occurred in Georgia. At one time, GA had the fourth-highest number of EVs on the road of any state in the country, circa 2015. And it was due to one of the most generous incentives of any state: a $5000 state tax credit for the purchase or lease of a new EV. Not only was the incentive repealed in its entirety, but a $200 road-use tax was imposed on EVs. The result? Between June and August of 2015, EV sales plunged 89%. The road-use tax exceeds the amount of money paid in gas taxes by a typical ICE driver. And, of course, there are too few EV drivers to compensate for the decreasing ability of gas taxes to fund needed road improvements. It was clearly punitive toward EVs. It worked, but it also underscores the value of incentives. (Source: WSB-TV) The EV road use fee is reported to be the brainchild of the American Legislative Exchange Council (ALEC), the organization of conservative state legislators that writes draft legislation and often supports fossil-fuel interests. See this article in Consumer Reports.

Budget

With respect to DEEP managing its budget, there is one new item on the horizon, namely an incentive for used EVs. This was authorized by the legislature in the same bill that provided the new funding stream for CHEAPR. There has been no announcement from DEEP regarding when this may be implemented, how much the incentives would be, or whether there is any means-testing involved. This could conceivably be what caused DEEP to be concerned about their budget. Given that they were on track to be within their allotment, we think a data-gathering phase before implementing changes would have made for better-informed decisions.

Model 3 Receives International Interest

The Westport Police Department has acquired a Tesla Model 3, which was announced by this blog on December 3rd, and via press release on December 10. It caused a bit of a stir locally, but it has also received international attention. The department has received calls from several European countries and Singapore asking about their process, experience, and seeking to follow up as more data are collected over time.

This level of interest may not have been a complete surprise. The PD brought the vehicle to the Connecticut Conference of Municipalities, held at Foxwoods on December 3rd and 4th. It is estimated that between 1500 – 2000 people came up to them, a combination of attendees from other municipalities as well as curious patrons, expressing interest and asking questions.

First M3 Squad Car

Westport is the second community to acquire a Model 3 for the police. Bargersville, Indiana was the first, and they posted a message on the WPD Facebook page congratulating them for doubling the number of towns using the vehicle for police work. The Westport M3, however, is being fully outfitted as a squad car, which was not the case in Bargersville.

WPD is working with Whelen Engineering and Fleet Auto Supply to develop and install the lights, siren, gun rack, and other accoutrements necessary for law enforcement duty. It’s all custom development. Nothing off the shelf fits the M3. These companies are providing their services for free to Westport because they see this as the beginning of a new market. That was not included in the cost-recovery calculations, but it represents significant savings.

That funky material on the rear bumper? It is reflective, widely used in Europe, and a particularly useful safety precaution when a police cruiser is stopped for an emergency in an otherwise active lane of traffic.

Tesla Tech

All squad cars get outfitted with cameras and computers. But Teslas already come with some serious tech, and better quality than the police would normally buy as an add-on. Part of the learning process with this M3 is how much of that tech can be leveraged. As of this writing, Police Chief Foti Koskinas advises that they are going to be using the Tesla cameras, and the Tesla Fleet Department is working with them because, again, this will only become more widespread. The computer presents a more complicated challenge because there is confidential data from each party that would have to be protected. (We can’t have Tesla seeing INTERPOL alerts!) This is not resolved at this time.

With Tesla’s cooperation, the added features that require power will be wired directly into the Tesla battery. It slightly reduces range, but it is a much more elegant, cheaper, and safer solution than adding an additional 12-volt unit.

It is possible that when it becomes known how much of the Tesla tech can be leveraged that there will be acquisition cost-parity between this vehicle and the Ford Explorer that would have been the default option.

Police officers will be receiving training in the vehicle at Sikorsky Airport. It may be possible for some club-members to observe.

The Potential for State and Municipal Fleets to contribute to GHG Reduction is Enormous.

This vehicle is actually not the first plug-in owned by the department. It also owns a Toyota Prius Prime, a plug-in hybrid that gets about 25 miles of electric range (not used as a patrol car). The PD reports that most of the mileage on the car has been in electric mode, and the vehicle has worked out well.

On the other hand, there is New York City, which already has 2,200 plug-in vehicles in its fleet, avoiding 9,000 metric tons of CO2. All well and good, but Westport has one more police EV than NY. And the EV Club of CT applauds Foti and First Selectman Jim Marpe for taking this step.

There will be an open house in the spring for the public to see the new cruiser and speak to the police. The vehicle will also be brought to Maker Faire.

New EV Charging Stations in Westport Coming Online in 2020

The EV Club has learned from Westport Chief of Police Foti Koskinas that there will be 10 new or upgraded charging stations coming to town next year.

• The four level 1 chargers on the New Haven-bound side of the Saugatuck Metro-North depot will be upgraded to level 2.
• There will be 2 additional chargers added to station parking on Franklin Street.
• Four new chargers are slated for the Greens Farms Metro-North station.

Koskinas mentioned that there is an increasing demand for places to charge. He mentioned something else that we found interesting, which is that the train station chargers are receiving considerable use during off-hours, possibly by EV owners who don’t have ready access to home charging?