Based on new data released by the Department of Motor Vehicles, Department of Energy and Environmental Protection, and the Department of Transportation, the number of electric vehicles on the road has increased to 30,181 up from the 25,444 published in July and 21,377 one year ago. The year over year increase is 41%.

This information comes from what has been published by DEEP and is not the granular data that we request in order to produce the Interactive EV Dashboard. No ETA on that at this point.

Tesla’s Model 3 remains the most widely registered vehicle with the Model Y at number 2. Some newer EVs, such as the Wrangler and Mustang Mach-E now make the list.

Fairfield County remains the EV nexus. This is the percent distribution (not population adjusted).

The definition of EV includes both battery electric vehicles (BEV) and Plug-in Hybrid (PHEV) vehicles, as both are included in the state’s EV goals. The market continues its trend toward BEVs. As can be seen in the chart below, BEVs now have 62% share, up 3 points from one year ago. If that increase seems small, it isn’t. Given that it is based on total registrations, it takes a pretty big shift to move the needle that much. (Case in point – the Chevy Volt, a PHEV that was discontinued in March of 2019 is still the 7th most widely registered vehicle.) For whatever reason, fuel cell vehicles and battery electric motorcycles are not included in the dataset. They don’t account for many vehicles, but they have always been part of the data we have received in response to our FOIA requests.

Recent trends have improved, and no doubt, lingering supply chain issues have been a restraining factor, but we are still a long way from where the state has determined we need to be. This chart looks at the trend historically, where we are today, and then a straight line model to the 2025 and 2030 goals of 150,000 and 500,000 respectively.

EV Manufacturers/Dealers Offering Consumer EV Leases, Incentives Included

This is a follow up to a post from January 5, when we first published about a surprising turn of events with respect to eligibility for the electric vehicle (EV) incentives that are part of the Inflation Reduction Act.

As we have written here and other places, while the Inflation Reduction Act, IRA, has a lot to recommend it, the design of the consumer EV incentive is overly complicated and confusing with numerous restrictions on which cars and individuals qualify.

In a counter-intuitive twist, the complex became simple, at least for leasing customers. While there are all sorts of restrictions around whether a vehicle or a purchaser qualifies for the tax credit, the IRS issued guidance on 12/29/22 that a consumer lease should be considered a commercial transaction. The commercial EV incentive has none of the restrictions that apply to a consumer purchase. Whatever the vehicle cost, wherever it is made, no matter the body style, it qualifies for the $7500 maximum incentive. (If you want to know the details of those consumer restrictions, see our incentives page.)

The IRS logic here is that the dealer or manufacturer sells the vehicle to the finance company which holds the title. This is a commercial transaction. The fact that the finance company then executes a lease with a consumer is beside the point. As such, it falls under the rules for commercial incentives, which are governed by a separate provision in the law that does not impose the consumer restrictions.

We are now seeing examples of this in the marketplace. The photo at the top of the post is of an ad for a Lucid EV. A recent entrant as an EV-only startup, Lucid makes ultra high-end EVs that, judging by the reviews, are pretty great. Car and Driver described its “unbeatable range and great performance.” However, the Lucid far exceeds the price caps imposed on the EV incentives in the IRA. But with a lease, voila, no MSRP cap. I received similar information from a CT dealership company that sells Hyundai and Genesis vehicles, that they have received new lease pricing that reflects the incentive. Both of those vehicles are manufactured in South Korea and thus run afoul of the North American final assembly rules if purchased.

Delay in Battery Rules

For buyers there is another loophole, for want of a better word, that gives the consumer a break, albeit temporarily. The IRS has not finished writing the regulations for the battery mineral sourcing/refining and manufacturing requirements. As a result, the incentive defaults to the old battery rules until the IRS issues these new regulations. They have said this will happen in March. In the meantime, we are now in a period where incentives are likely to be higher for most, if not all, EVs than they will be in a few months. Buy now, but be sure to take physical possession of the vehicle before the battery rules take effect or risk losing the incentive.

Manchin Agonistes

It has been widely reported that Senator Joe Manchin  is not happy about either of these two developments. As reported in The Verge, he has introduced legislation to delay the implementation of the incentives until the IRS finishes its rule making, and to claw back incentives that may have been granted under the IRS interim rules.

Manchin is also not pleased about the IRS interpretation of leasing as a commercial transaction and may try and correct that legislatively as well.

I doubt Manchin’s legislative proposal(s) will become law. The House is too preoccupied getting its house in order. And what appetite will the Senate have to revisit this hard-fought reconciliation-passed bill? Nobody else in either chamber seems to be all that concerned about either of these developments, at least not on the record.

I think Manchin genuinely wants to bring manufacturing back America. I’m not so sure he cares about people buying EVs. The threat of a retroactive restriction and claw back only punctuates this. Part of the cleverness of the IRA is that it strikes a balance of both supply side and demand side incentives. But when it comes to EVs, the design of the consumer EV incentive is so perversely self-defeating, that with respect to Senator Manchin, this feels like karma.

Update: As reported in Reuters, Manchin tried to get his bill passed on January 26th by unanimous consent, but it was blocked by Sen. Debbie Stabenow of Michigan. She is quoted saying, “It is not unreasonable what Treasury is doing … they have been given an incredibly complicated task to try to figure out how this consumer credit will work.” Separately, she also noted the inherent unfairness of this bill to consumers in that it “would literally take away credits from people who are buying cars today … Fundamentally, (Manchin) is not a fan of EVs.”

The usual disclosure: This information is accurate to the best of our knowledge. Always check with an accountant when it comes to tax matters.

EV Club Meeting - SPAN Smart Panel Deck

New CHEAPR incentives to arrive this year

Expansions to CHEAPR, courtesy of Public Act 22-25, passed by the legislature last year, effective as of July 2022, implemented piecemeal as they are built, will see the remaining parts come online this year. The new pre-qualification process for income limited incentives should be ready by the end of March and the “non-personal” incentives (businesses, municipalities, etc.) should be ready at some point in the second quarter. Unlike the cash on the hood consumer rebates, the non-personal incentives will have a post purchase process to claim the rebate. These will tell the tale as to whether the program will accelerate to a higher level. We are also expecting DEEP to expand the list of eligible used EVs, which we feel are unnecessarily constrained to only vehicles that were eligible as new vehicles.

November was similar to October with 121 rebates, slightly higher than the 112 (slightly restated) for November. Below is the distribution by model with the Tesla Model 3 the largest, followed by the Toyota RAV4 Prime PHEV and the Chevy Bolt EUV. The file sometimes breaks out different trim levels, which is what happened with the RAV4, where the SE (2 rebates) was reported separately. As we’ve noted before, CHEAPR can be a useful proxy to gauge which models that fit under the price cap are resonating with consumers, but it does that less well in this period where there are supply shortages. For example, even though the Bolt EUV looks like it is successful, GM is still dealing with recovering from the extensive recall and as a result, it is building replacement battery packs alongside new vehicles. That is a GM specific circumstance, but it has the same effect of constraining deliveries.

There was one income-limited rebate in November, a used Chevy Bolt.

2022 was an action-packed year as you can see below. But we wanted to begin by saying a big Thank You to all of our members and supporters.

EV Evangelist Award

Club president, Barry Kresch, was given an award by Southwestern CT Clean Cities Coalition for Outstanding Leadership in EV Education. This award is a public acknowledgement of the positive contributions Barry and the EV Club of CT have made towards our mission of evangelizing the rapid adoption of EVs.

The Year of Incentives

With legislative and regulatory pushes at the federal and state levels, EV purchase and charging incentives became both more numerous and more complex in a big way over the past year – and it’s not over yet. The IRS is still working on the rule-making for the incentives in the Inflation Reduction Act and the US Treasury has delayed EV tax credit guidance regarding battery sourcing until March 2023. DEEP is still in the process of implementing the changes to CHEAPR from PA 22-25, and PURA is conducting its year one review of the charging installation and managed charging incentives being offered via Eversource and United Illuminating with anticipated changes to follow. We have spent considerable time keeping up with developments on our incentives page and various blog posts.

Advocacy

We remain engaged with policy makers, including for SB-4 last year, which significantly augmented the CHEAPR program. Our biggest disappointment was another year without a direct sales bill. The club has a seat on the policy committee of the national Electric Vehicle Association, with whom we partnered to submit comments to the IRS regarding the Inflation Reduction Act. Similarly, the club partnered with our EV Coalition partner, Save the Sound to submit comments to the Public Utilities Regulatory Authority regarding the year one review of the utility incentives.

Speaking Engagements and Appearances

The club educates the public about EVs through virtual and in-person speaking engagements, panels and events. Engagements in 2022:

• Wakeman Town Farm Westport
• Transportation Summit – CT League of Conservation Voters
• Schiller Shoreline Lifelong Learning Institute in Guilford (with People’s Action for Clean Energy – PACE)
• Y’s Men – YMCA, Westport
• Greenwich Conservation Commission/Greenwich Sustainability Committee
• Westport Rotary
• CT Humanist Society – Hamden
• Town of Kent (with PACE)
• Sustainable Essex
• EVs for Law Enforcement – Clean Cities Panel
• Westport Senior Center
• Clean Transportation Day for legislators in Hartford

EV Showcases

There are numerous events around the state and the club supports as many as we can, sometimes by participating directly or other times by helping to recruit EV owners to exhibit their vehicles. We let our members know about these via emails, blog posts, and our event calendar and have participated in events from Greenwich to Essex. Showcases tend to cluster in spring and fall around Drive Electric Earth Day and National Drive Electric Week. We also supported the return of the Electric Car Guest Drive, an event in which EV owners are paid to participate with their vehicles. 

Wilton Fire Department

As we did with Westport a year ago, we arranged for club members to bring EVs to the Wilton Fire Department for first responder training. Aside from the requisite instruction, these events are a lot of fun as the first responders we speak to are genuinely engaged and have many questions.

Food Rescue US

When gas prices spiked, the volunteer drivers that this organization depends upon to “rescue” food before it is discarded so it can be donated to organizations serving food insecure families became harder to come by. A number of club members stepped in to fill this need. Food Rescue advised us they considered club participation to be a huge success.

EV Club Joins for Event with Rivian Owners Club

The new Rivian R1T pickup and R1S SUV have begun to be delivered to reservation holders in 2022. In May, the EV Club joined up with the Rivian Owners Club for a meetup at the Bridgeport Brewing Company with Rivian owners showing their vehicles to EV Club members. Funds from an event fund raiser went to support our EV Coalition partner, Save the Sound. See the video tour.

CT EV Data

• EV Dashboard based on our Freedom of Information Act Requests of the Department of Motor Vehicles – updated semi-annually.
• CHEAPR rebates monthly and an annual summary of rebates by dealership (our proxy for EV-friendly dealers to the extent they sell CHEAPR-eligible vehicles).
• Ad hoc projects, such as the financial analysis done for the Westport Police Tesla Model 3 patrol car with the possibility of an update for the new Model Y patrol car.

Public Meetings

It has been more challenging to hold meetings during the pandemic. We have tried to fill the gap with virtual meetings at which we hosted speakers. This year we had speakers from Eversource and UI discuss the new consumer and commercial charging programs. A brand ambassador from Aptera joined us to discuss their unique approach to a solarized EV. We ended the year with a gathering at the new net-zero Hotel Marcel in New Haven where we celebrated the opening of L2 and Tesla charging stations.

Inflation Reduction Act Incentives Officially Begin – But Which Cars Qualify?

It is anticipated that consumer confusion will ensue with the advent of the new incentives. Not only have they become a lot more complicated, but many manufacturers have yet to finish the registration process that certifies vehicles. Also, the IRS, which was handed the Herculean task of crafting all of the implementation rule-making in the span of about 4 months, unsurprisingly, is not yet finished. The Department of the Treasury has announced a 3 month delay. This most particularly affects the rules concerning batteries. The incentive provisions are, therefore, being phased in.

No More Manufacturer Cap

The manufacturer unit sales cap is now gone. That means that Tesla and General Motors are no longer excluded on that basis. Toyota, Ford, Nissan, and Hyundai/Kia had also either surpassed or were close to reaching the 200,000 unit threshold, which will now not apply to them either. (Toyota and Hyundai/Kia are presently disqualified due to final assembly not occurring in North America.)

Delay in Battery Rules Means 3 Months Without Them

The biggest challenge for the automakers will be to source the required percentage of critical minerals, either domestically or from countries with whom we have a free trade agreement. A somewhat lesser challenge will be to have battery assembly located in North America. But for this 3-month window before the rules are complete, they simply don’t apply. This is, in effect, Treasury’s “Buy Now” sale! Incentives for most BEVs will almost certainly decline when the new provisions get implemented as this degree of supply-chain reorganization will take some time, but for now, enjoy the full $7500 incentive. Note: The buyer must be in possession of the vehicle prior to the implementation of the new battery rules to take advantage of the full incentive if the new rules would cause the vehicle to lose all or some of it.

Absent the new battery rules, PHEVs are subject to the battery pack size rules that existed before the IRA. When the new rules kick in, PHEVs will be eligible for the same incentives as BEVs.

Which Cars Are Eligible?

Good question, and not exactly straightforward. This is the page on the IRS website that lists the manufacturers and specific vehicles. A number of manufacturers, namely Kia, Mazda, Mercedes, and Subaru are listed as having entered into an agreement to become a “qualified manufacturer,” but have not submitted specific vehicles. Other manufacturers are missing from the page altogether. Specific vehicle models are listed for Audi, Ford, GM, Nissan, Rivian, Stellantis, Tesla, Volkswagen, and Volvo. For the vehicle models that are listed, eligibility is not guaranteed (see MSRP cap below). The IRS advises this page will be updated on an ongoing basis.

MSRP Cap

Treasury is defining MSRP as the manufacturer’s suggested retail price, including options, accessories, and trim (but not destination charges). This may be different than what you pay for the vehicle. For example, if a dealer either discounts or surcharges the price, it is still the price as suggested by the manufacturer that rules.

How a vehicle is classified with respect to body type determines which MSRP cap applies. Vans, SUVs, and pickups have an $80,000 cap. All other vehicles have a $55,000 cap. And it looks like the IRS is being persnickety about this classification insofar as crossovers, which in the marketplace are direct competitors to SUVs, are not classified as SUVs and are subject to the lower cap. Some examples are the Ford Mustang Mach-E, the 5-seat version of the Tesla Model Y (the 7-seat version is classified as an SUV), all of the non-AWD versions of the VW ID.4. It doesn’t make a lot of sense to me either. Unfortunately, we foresaw this problem and included it as part of our comments to the IRS. It is a sneaky thing that ends up overweighting the incentives toward PHEVs.

Just because a vehicle is listed on the IRS web page does not mean that there is a trim level that falls under the cap. The cheapest Tesla Model Y, for example, is $65,990 (long range, non-performance, 5-seat configuration), obviously more than the $55,000 cap.

Other rules

Personal income rules are in effect – $300K for joint filers, $225K for head of house, $150K for a single filer. You can use current (purchase) year or prior year income to make this determination.

The incentive is in the form of a tax credit for when you file your 2023 taxes. The transfer option doesn’t take effect until 2024. Yes, you can use a tax credit if you use the standard deduction. The credit is good insofar as you have the tax liability to burn it off. To the extent the credit isn’t used, it goes away – no carry forward. Leasing the vehicle is a way to utilize the credit if you don’t have the tax liability.

The used EV incentive is now in effect.

North American final assembly rules have been in effect since the legislation was signed by President Biden on August 16th. The Department of Energy has a VIN decoder on this page, which you can use to make sure. Unfortunately, a VIN is not available until late in the sales cycle if you custom order, though it is available for a car on the lot.

The seller is required to send to the IRS the vehicle VIN and the purchaser’s tax ID. The purchaser is required to include the VIN when filing for the credit.

For a more complete description of how the new incentives work, please see our incentives page.

Note: All incentive advice is to the best of our knowledge and cannot be guaranteed. Also, IRS rule-making may subsequently change things.

New Model Y Enters Service

The Westport Police have entered a new Tesla Model Y into service. It has been fully customized for law enforcement duty.

The department now has a subscription to Tesla-fi and we will be monitoring electricity use and battery degradation. We are in touch with the police and may look at the metrics more broadly as we did in our extensive analysis of the Model 3 which was published about 18 months ago here.

The WPD has been lean-forward with respect to EVs from the start. They have been very happy with their Teslas, which exceed the performance and safety standards required for patrol cars, and which have gotten great feedback from the officers that have used them. But they have also acquired other non-Tesla EVs for things like parking patrol, the detective squad, and school patrol. In addition to EVs, they have installed level 2 EV chargers at the two Metro-North parking areas, which are under their management. Outside of commuter hours, these chargers are open to the public. Some of them are convenient to an area where there are a lot of restaurants and shops. And a number of them are powered by a solar array that sits atop the Saugatuck depot building. The police have also been supportive of EV Club events when we have needed to use the Saugatuck parking area.

The department was recognized by the CT Southwestern Area Clean Cities Coalition for its Municipal Readiness Award. The photos below are Chief of Police, Foti Koskinas, accepting the award and a front view of the Model Y. The award ceremony was December 13th.

Steady as She Goes – Rebates Have Plateaued for the Time Being

CHEAPR rebates are up over 50% since the MSRP cap was raised in July. Rebates averaged 74 per month for the first half of the year. Since that time, that has increased to 115. It has been holding steady at that point. October had 111 rebates. September was restated (a common thing) to 118.

There is a CHEAPR board meeting on Dec. 15, so any updates regarding progress on implementation of the new aspects of the program will be communicated in our next update.

Below is the distribution of rebates by model. This is done using the data as it directly comes from CHEAPR. It can be a little unpredictable how they characterize models. For example, there are 22 Toyota RAV4 Prime and 1 Toyota RAV4 Prime Plug in Hybrid SE. I suspect it is just a matter of not handling the data consistently. My preference would be to consolidate the model name.

The Toyota RAV4 Prime, which had been the dominant rebated vehicle is no longer alone. Since Chevy emerged from its Bolt battery recall and restarted production, the Bolt numbers have climbed significantly. The EUV version hugely outperforms the original hatchback.

Now that the base model Tesla Model 3 is again eligible, it is a regular high performer, though delivery timing causes the numbers to fluctuate.

The Toyota Prius, once the fuel-efficiency darling of the automotive world has been cannibilized by all manner of plug-in vehicles entering the market. The plug-in version of the Prius, the Prime, has taken a nosedive ever since the RAV4 Prime was unveiled. The RAV4 Prime is, of course, in the popular SUV segment, and it has a longer electric range than the Prius Prime, 42 vs 25 miles. Toyota has announced a refresh of the Prius beginning with the 2024 model year. The PHEV reportedly is going to have an electric range of about 40 miles (this car has not yet been EPA rated).

There were no income-limited rebates awarded in October.

When we have December data, we will update our dealer rebate profile. Look for it in February.

24 Chargers at Hotel Marcel in New Haven

Photos: Hotel Marcel, Maxwell Electric Shuttle Minibus parked at an EVConnect charger, Solar Canopy and Tesla chargers, charging under the canopy

At long last, the chargers at the Hotel Marcel in New Haven are live. The hotel is located in the Long Wharf area, next door to IKEA. There are 12 Tesla 250 kWh Supercharger stalls  and 12 level 2 chargers from EVConnect with J-1772 connectors. The infrastructure is present to triple the number of L2 chargers to 36. You can use the EVConnect app to use them. Just download it from Apple App Store or Google Play, then scan the QR code, use the Guest Checkout option, then charging starts right away. Alternatively, if you already have a ChargePoint account, you should be able to start charging by just tapping your phone on the charger, or using the ChargePoint app. The rate for the level 2 charging is set by the hotel and it is being made available gratis. Tesla is responsible for setting the supercharger rate.

The IKEA next door has another 2 level 2 chargers (free) and there is a planned Electrify America level 3 installation coming.

The lobby area of the hotel is open 24/7 with rest rooms and food available. While you are there, check out this very cool facility, housed in a 1960’s landmark Brutalist building retrofitted as the nation’s first net-zero hotel. Power comes from solar panels on the roof and solar canopies, complemented with batteries, energy efficient electric appliances and fixtures. Even the elevators have “regenerative braking” when they are descending. The 11th Commandment: No electron shall go to waste. The insulation is very tight, including the German-made windows, which allow for passive heating in the winter. All of this makes for effective sound insulation, as well. Even though it is near a busy highway, the rooms are totally quiet.

20 Chargers Coming to Fairfield

The Town of Fairfield will be installing 20 level 2 charging ports (10 dual port units) at Sullivan Independence Hall sometime in first quarter 2023. These are intended for use by the town fleet. The town doesn’t have the vehicles yet – like with everyone else, deliveries are slow. But it’s great they’re thinking ahead. These are networked and could be repurposed for consumer use, but it is not known if that will happen.

Both the Hotel Marcel and the Town of Fairfield made use of the utility incentives for these installations.

Post by Barry Kresch

Dealerships Up In Arms Over Ford Demands

Sparks are flying between Ford dealerships and Ford Motor Corporate over a looming deadline for dealers to declare whether they want to opt-in to Ford’s new structure for selling EVs.

Ford Plan

Despite the success of its two most recent consumer battery electric vehicle (BEV) entries, the Mustang Mach-E and the F-150 Lightning, Ford CEO Jim Farley said the company needs to further streamline its operations and specialize if it is going to become a leader in electric vehicles and achieve the kind of margins seen at Tesla. Farley announced in March that Ford would be splitting the company into 3 divisions: Ford Blue Oval, Ford Pro, and Ford Model e. Blue will sell the company’s ICE vehicles, including conventional hybrids and plug-in hybrids. (Ford currently sells only 1 plug-in hybrid, a version of the Escape, a low-volume vehicle with only 72 registered in CT as of July 1.) Pro is what it sounds like – commercial vehicles. Model e dealers will be the only dealers entitled to sell BEVs. Dealerships electing not to go with the certification remain Blue Oval.

Farley was quoted by CNBC as saying, “We are going all in, creating separate but complementary businesses that give us start-up speed and unbridled innovation in Ford Model e together with Ford Blue’s industrial know-how, volume and iconic brands like Bronco, that start-ups can only dream about.”

When Ford announced the particulars at its dealership meetings in September, dealers were advised that in order to be a Model e certified dealership, they must be prepared to invest up to $1.2 million for infrastructure, do business under certain prescribed rules, and make a decision by 12/2 (pushed back from the original deadline of 10/31). Those dealerships moving forward with this arrangement are to be Model e Certified Elite. Ford is also offering a lower-investment tier, just Certified (no Elite) of $500,000 that comes with a cap on the number of EVs they will get. According to Autoblog, the cap is 25 vehicles annually and they are not permitted to be displayed on the showroom floor. This may be a useful option for lower-volume dealers.

Other requirements:

• Dealers have to ensure the chargers remain in good working order.
• Chargers must be public-facing.
• Other investments are required for equipment to service EVs, and again, they have to do this anyway.
• Pricing transparency. Dealers set the price of the vehicles, but every customer of that dealer gets the same no-haggle price. The price can be different at different dealers.
• Transactions can be done online or at the dealer.
• Dealers have to deliver EVs to buyers.
• Dealers must have pick up and drop off service for when vehicles need to go to the shop.
• Ongoing staff training is required. (I’ve lost track of how many club-members report they know more than the salesperson.)

The Model e arrangement begins in January 2024. Dealers who do not opt for Model e will be given another window to do so in 2025 to begin selling EVs in 2027.

CT Dealers Invoke the Power of the State

The Farley plan is bold, but it seems to be too bold for CT Ford dealers. They complain that it is too high a mandatory investment in too short a time frame. In addition to the investment, dealers are reportedly not happy about the restrictive pricing policy, and generally being told what they can and cannot sell on any level.

As reported in CT News Junkie, local dealers have gotten state and federal politicians to speak out on their behalf. U.S. Senator Richard Blumenthal is quoted as saying, “I’m convinced there is a case that needs to be investigated here.” Presumably, he is suggesting that the Federal Trade Commission get involved. From State Representative Roland Lemar (D – New Haven), “I think we all are going to call on Ford strongly post this meeting to rescind these terms and to restart this conversation.” And State Senator Heather Somers (R – Groton) opined, “The amount of investment required for our local dealers is staggering, absolutely staggering.”

How often does it happen that private businesses are able to get government to intervene in a commercial dispute?

Our Perspective

Ford’s plan is an aggressive gambit of the kind we haven’t often enough seen from the legacy automakers. Even though Ford is among the best positioned of these companies from the perspective of its having developed two of the most successful EVs, Farley deserves credit for pushing forward and betting on innovation.

But let’s unpack the dealership complaints.

Regarding notice, the dealerships have known this was coming since March. Though the specifics were not announced at that point, it looks to us like there were ongoing discussions with dealers, which is how the non-elite version of Model e came about as it was not a part of the earlier announcements. Yes, they have to make a big decision, but it did not come out of the blue.

According to Inside EVs, 90% of the upfront cost is for the installation of DC fast charging equipment. It is unlikely that any dealer will pay anywhere near $1.2 million. There are state and federal incentives available and they are generous. The state incentive is through Eversource and United Illuminating. DCFC installations can receive up to $150,000 (baseline) or $250,000 if the location is an under-served community, and the funds can cover 100% of make-ready (the expensive task of bringing the power, a lot of power, to the location) and up to 50% of the cost of the hardware. Furthermore, the make-ready can include oversized panels or additional conduit for future-proofing purposes. There is also a provision for EV chargers in the Inflation Reduction Act (rule-making for the IRA is still in progress). I would not be surprised if these incentives cover ~70% or more of the cost. Of course, Ford is not in a position to make specific promises about what in the way of incentives a given dealer would get, so they have no choice but to state the max cost.

If a dealership is going to be in the EV business, they need chargers anyway! Ford notes the ubiquity of its dealerships. This part of the plan will put EV chargers front and center and turn that necessity into a marketing asset. Ford has financing programs in place. And the dealers can charge for the electricity.

Most Dealers May Not Be Like CT Dealers

Not all dealerships oppose what Ford is asking. In fact, CT appears to be in the minority. CNBC quotes Tim Hovik, a Nevada dealer and head of the Ford National Dealership Council which represents Ford’s franchised dealers, who characterized the plan as “well-received.”

“The dealer body wholeheartedly agrees with Jim’s assessment, we very much want to be the most valuable franchise out there. We’re big fans of that,” said Hovik. “It’s really all about growth.”

No local Ford dealers spoke on the record in the CT News Junkie article. The only dealer quoted was Jeff Aiosa in his capacity as an officer of the CT dealer association. He owns a Mercedes dealership.

Lemonade

Dealerships have often been a weak link in EV sales. Not all of them, but many. Their innate conservatism is part of what is causing the traditional car companies to badly lag Tesla. The share of registered EVs in Connecticut that are Tesla is higher in 2022 than it was when I first began tracking adoption in 2017.

Ford’s Farley has commented that he would like to incorporate some of what he feels are the advantages of direct sales into the way Ford sells EVs. Ford, itself, cannot turn to direct sales. There are franchise laws and they’re not going away. I assume he feels it is pointless to challenge them even if he wanted to.

When I read about the Model e plan, I thought, “He’s figured out how to make lemonade.” The dealership in this model actually becomes an asset.

If every Ford dealer has publicly accessible DCFC prominently displayed, it sends a message to the consumer that this is a brand that is serious about selling EVs. The pricing transparency may work to reduce the dealer markups over MSRP or attempts to force customers to buy options they don’t want. Ford has been opposed to these practices. If owners of other brands are allowed, even encouraged, to charge at a Ford dealership, it is a way for them to see what Ford is offering and how they approach selling EVs that may influence the purchase of their next vehicle.

Aside from the chargers and pricing, the other requirements listed in the bullet points go beyond what many dealers offer today, but they will all contribute to a better consumer experience.

Ford is not so gently encouraging specialization. While a Certified-Elite dealer can continue to sell ICE vehicles, the program pushes them to emphasize, and I suspect at some point only sell, EVs.

Ford’s plan is a serious attempt to solve the dealership conundrum. It is different than the “put up or shut up” approach of GM, where the company ended up buying out 17% of its Cadillac dealerships that were not prepared to invest in EVs.

I beg to differ with Senator Blumenthal. We don’t need an investigation. We need forward-looking, consumer-friendly ways of doing business.

Update:

Multiple sources are reporting that two-thirds of Ford dealerships have elected to participate in Model e with the majority opting for the Elite certification level. There are some other areas where like CT there is a more organized level of opposition.

Lawsuits have been filed by dealers and their associations against Ford. We don’t have the Venn diagram to know the overlap between those who signed up for the program and those who filed suit. It is possible a dealership might opt-in to Model e to avoid being shut out of EV inventory and still participate in the lawsuits pushing back on Ford. A description of the cases can be found at FordAuthority.com. The article mentions some dealers and associations, but has no mentions regarding Ford dealerships in CT.