Photos by Paul Braren

20 EVSE L2 Chargers at DOT

An EV charger installation at DOT headquarters in Newington is now open. The location is 2800 Berlin Turnpike. The 20 level 2 chargers are from EVSE, LLC, an Enfield, CT based manufacturer. The chargers have J-1772 connectors. They are 40-amp units and there is a 4-hour parking limit. That amount of time should get most vehicles ~140 miles of charge.

These chargers are currently open to the public and the price is right (free)! We do not know how long either of these conditions will last. The chargers are at the DOT building, not in a downtown parking lot, so not the most convenient for someone who does not have business at DOT or the immediate area. But we’ll take more chargers anywhere we can. This location is noted in PlugShare with a number of happy check-ins over the free juice.

One of the features of these chargers is auto-coil. When the cord is disconnected from the vehicle, there is a mechanism to automatically retract the cord into the housing of the charger, which is clearly seen in the photo of charger number 20 below. This is a valuable feature. Many older chargers have cords that need to be manually wrapped, which is a nuisance that people frequently don’t bother doing. The cord ends up flopping on the ground, subject to damage from becoming overly entangled with itself, snow or ice, or cars driving over it. That is the best way to get out-of-service chargers. Whether it is auto-coil or other systems that do a similar thing, this is a best-practice with EV chargers.

The Rivian R1T in the photos has a camper package. This is a third-party package that fits the Rivian. Rivian camper packages have seen lengthy delays.

Photo above: Ford expects its Mustang Mach-E to qualify for half the incentive; Chevy expects the same for its Bolt.

Battery Rules Issued

January 1 came and went. The new federal incentives in the Inflation Reduction Act became law but the implementing agency, the IRS, had not completed rule-making for several portions of it, most particularly how manufacturers can be in compliance with the new rules for sourcing and refining of critical minerals and battery assembly. The IRS said it needed until March. True to its word, the rules were issued on March 31 and take effect April 18th. This interim period allows manufacturers to determine which vehicles will be eligible and whether the certification will be for the full $7500 credit or only half.

Consumers have gotten a benefit from this delay as more vehicles were temporarily eligible. Many vehicles are expected to lose incentives due the rules. If you have cash burning a hole in your pocket and are in the market, you can still move fast and pick up an EV with the full incentive applied (assuming the other criteria are met). But you have to take possession of it before April 18th. The incentives are applied, in IRS speak, at the “date placed in service.”

What Rules Apply

The rule-making itself is highly technical in nature. The law requires that 40% of the sourcing and refining of critical battery minerals occur either domestically or with a free-trade partner and that 50% of battery assembly takes place in North America during 2023. Going forward, these levels escalate. So, how do you define 40%/50%? The IRS has determined that it is to be based on value. So how does one define value? What is the legal definition of a free-trade partner? (The ink is still wet on some frantic dealmaking that happened so that some friendly nations, e.g. Japan and South Korea, could officially become free trade partners.)

We’ll know on April 17th what vehicles are eligible for how much of the incentive, but it will be a continually evolving list as manufacturers wrangle supply chain logistics and as the requirements escalate. It is possible that a vehicle eligible in one year loses eligibility in a subsequent year if the supply chain has not maintained pace with the requirements. And it has to be done in an environment of (presumably) a rapid ramping up of production volume. This article from Reuters includes statements by some manufacturers regarding which vehicles stand to lose incentives. This is the Department of Energy page that lists qualifying vehicles. It will be updated on April 17th.

Making Sure the Vehicle is Incentive-Eligible

It certainly helps if a manufacturer certifies that a given vehicle is incentive-eligible. But the IRS is officially determining eligibility based on the VIN. This is a new world we’re about to enter, and with all that is being written in the press about how these incentives work, there hasn’t been much discussion of this potential for a consumer to be left in the lurch.

It is possible that two of the same make/model/model year vehicles have different incentive statuses, based on when and where the manufacturing and delivery take place. When filing for the tax credit, the VIN is required and Treasury matches it to its records. It is advisable to check the VIN before buying the vehicle. That can be a hassle, as for a made to order vehicle, the VIN isn’t available until late in the game.

The EV Club, in partnership with the Electric Vehicle Association, recommended that the IRS use make/model/model year and deal with it at the manufacturer level. Our take is that asking consumers to be in the VIN checking business is a clunky way to go. It could cause an unpleasant surprise. It definitely fosters confusion.

For readers of this blog, if you buy an EV after the new rules are in effect, we are interested in hearing about the process and if you felt protected if you were promised an incentive.

Leasing

For those who lease, none of the rules apply, not even North American final assembly. The full incentive applies. Just remember, the finance company gets the incentive. It is up to the consumer to verify it is being passed along, which is not legally required. It is called a subvented lease.

Other Rule-making

Yes, there’s more, particularly the foreign entities of concern rule and the transfer.

Foreign Entities of Concern

The foreign entities of concern rule, which will phase in during 2024 and 2025, will likely include several countries, but is really all about China, which currently dominates the battery mineral supply-chain and has a lot of battery IP. What about Chinese investments in this country? Ford recently announced a joint venture with the big Chinese battery company, CATL, to build a plant in Michigan to manufacture LFP (Lithium Iron Phosphate) batteries. Does this comport with the law? In this case, Ford is banking on the fact that it is only the IP that comes from CATL and that the plant is owned by Ford. This is an article in Politico that discusses it in some detail but stops short of making a definitive statement. Stay tuned.

Transfer Provision

The transfer provision kicks in as of Jan 1, 2024. This year, the incentive is a tax credit. There are two drawbacks to tax credits. The first is that you have to wait until you file your taxes to get the incentive. The other is that you need to have the tax liability to burn it off. The transfer provision allows the consumer to transfer the incentive to the dealer or manufacturer and take the credit as a “cash on the hood” rebate. Unlike with a lease, the law requires the dealer to transfer the full amount of the credit to the consumer. That solves the timing problem. But what about if the consumer doesn’t have $7500 of tax liability? Could there be a claw-back? That seems unlikely. The intent of the transfer provision is, in part, to be an equity measure, so people without tax liability could take advantage of the incentive.

Tesla Debuts Combo Port to Accommodate CCS Charging

The photo above, taken by Paul Braren at the Tesla Superchargers in Brewster, NY, displays the new Tesla “Magic Dock.” That is the hunk of plastic at the upper left of the connector. The Tesla connector is plugged into a Combined Charging Standard (CCS) adapter.

Federal NEVI Funding Moves Tesla to Accommodate Open Standard

The background is the National Electric Vehicle Infrastructure (NEVI) part of what is referred to as the bipartisan Federal Infrastructure Bill that predated the Inflation Reduction Act (IRA). There’s money in the air, $5 billion from this legislation, as well as additional funds in the IRA, but proprietary technology will not qualify for federal grants. The CCS standard is used for DC fast charging for every non-Tesla EV. The Tesla charging network is already the most robust. This will enable them to tap federal funds to further accelerate their expansion. The Tesla network has very strong uptime and performance metrics and its entry into the CCS charging space promises to be a major boon for non-Tesla drivers.

7,500 combo chargers by the end of 2024.

As included in a White House press release, “Tesla, for the first time, will open a portion of its U.S. Supercharger and Destination Charger network to non-Tesla EVs, making at least 7,500 chargers available for all EVs by the end of 2024.” That number includes destination chargers, which are level 2 chargers, and it did not specify a breakdown of destination vs Superchargers.

Using the Magic Dock

When a driver uses this combo connector, the smartphone app will tell the charger what kind of car it is. At present, the app is a Tesla app, which can be downloaded by owners of non-Tesla EVs. We’ll see if that creates a problem with the Feds if they demand a more open system. If the app recognizes a Tesla, the charger will unlock only the Tesla connector. For other vehicles, it will unlock the connector with the CCS adapter attached. In the latter case, the CCS adapter will be locked to the Tesla connector so that someone doesn’t make off with it. At present, there are only a small number of these combo chargers installed. According to the Tesla charging network maps, none are in CT; they are only in New York and California.

There is one other issue. This photo is a V3 charger. At Tesla chargers, vehicles back in and the charging port is at the driver’s side-rear of the car, similar to where a gas tank is usually located. The length of charger cord needed to reach the port is pretty short. Different manufacturers locate charging ports in different places on the car. There have been reports of vehicles parking at an angle or horizontally, and taking up multiple spaces, in order to be able to plug in. It is not a simple matter to switch out these cords for longer ones. They are liquid cooled and would experience power loss. Tesla has removed the bollards from at least some of the superchargers, which would provide a tad more wiggle room. Hopefully, nobody crunches into something they shouldn’t!

The solution is a new design, which is what Tesla has previewed here:

The V3 is on the right and the new V4 is on the left. Note the different style of connector with a considerably longer cord, external mounting, and much taller unit in general. That seems to be a good answer. Now we await word on the timing of the planned rollout, which may well be contingent on the timing of the grant funds.

Update: 4/27/23

The installation of 12 chargers is complete, including Eversource installing transformers and the town wiring them to the charging units. They have not yet been turned on. We await word from the Town when that will be and if there will be a fee to use them.

Baldwin Parking Lot to Host EV Chargers

The photo shows several JuiceBar Level 2 chargers being installed in the Town owned Baldwin Lot in downtown Westport. According to CT-based manufacturer, JuiceBar, they have been commissioned to install 12 of these units. The Town of Westport advises that they have also installed all the necessary conduits, circuitry, etc. to accommodate an additional 12 units, the timing for which is to be determined. The Town also advises that all going forward planning for parking now includes EV charging.

From the Town’s perspective, the installation is complete. What remains is for Eversource to do its part – pulling in the primary service cables, setting the new transformer, and wiring it to their side of the electric meter so the distribution panels will become energized. Eversource has not given a specific date. The Town estimates 4-6 weeks.

These are 80 amp units, which is as powerful as it gets for a 240 volt, Level 2 charger. Most level 2 public chargers are 30 or 40 amps. Where that matters is charging speed for vehicles that can take advantage of it. A vehicle’s onboard charger converts the AC current to DC and controls the flow of energy. It takes an onboard charger of 19.5 kW to fully utilize this level of power, which will deliver over 80 miles of range per hour of charge. If your vehicle’s onboard charger is lower than 19.5 kW, and most are, it simply means the rate of charge will be slower. It will not damage the battery. It is forward-looking that a unit with this amount of power is being installed. The capacity of onboard chargers is steadily increasing as battery technology improves.

To be clear, these are not Level 3 DC fast chargers. These chargers are located in a lot where vehicles are typically parked for an hour or two as there are numerous stores and restaurants in the immediate area. But now that hour or two can bring with it a substantial amount of charge, as opposed to the relatively token amount of mileage on many of the low-powered units that are out there.

These units have J1772 connectors.

The charging may be free when the units are first fired up. The town has provided free charging at its other EV chargers (library, Town Hall, both Metro-North depots, Staples). That will change. When and how much has not yet been decided.

Restructured Residential Managed Charging Incentives

For the first year of the program, there was one incentive program. This was a so-called demand-response (DR) program, where the EDCs would declare demand events during peak load periods on hot days. These occurred during 3-9 PM on weekdays from June through September. They don’t happen all the time, just when demand is very high due to heavy air-conditioning use.

The new plan revises this DR incentive and adds a second level of incentive known as Advanced Managed Charging, or Advanced Tier.

Before getting into the details, let’s zoom out a bit.

As noted, current peak demand periods occur during hot summer afternoons. In a fully decarbonized, meaning electrified world, demand patterns will significantly change. If heat pumps become the primary means of climate control, they will be working hardest on the coldest nights where gas and oil do the heavy lifting now. The summertime demand will be reduced since heat pumps are more efficient than AC compressors. So the Public Utilities Regulatory Authority (PURA) wants to inculcate in consumers the habit of thinking about peak and off-peak utilization as a year round thing, while still responding to the near-term load-shedding needs that occur over the summer.

The Authority directs the EDCs to implement an annual passive managed charging program for the residential Baseline Tier, with the on-peak period of 3:00 P.M. to 9:00 P.M. weekdays

participants shall be eligible for a maximum monthly incentive of $10, so long as the customer charges the EV at least 80% of the time during off-peak hours for the given month

EDCs will stagger start times to prevent “timer peak.”

These new programs are anticipated to be effective as of April 1, 2023.

Baseline Tier

The Baseline Tier is structured in 2 parts with separate payouts.

The first is a Passive Managed Charging tier where participants charge 80% or more of the time during the off-peak period and would be entitled to a $10/mo award. Peak times are 3 PM – 9 PM weekdays for this monthly incentive.

Additionally, the Demand Response Events remain during June to September where participants are encouraged to not opt-out of optional DR Events. There can be up to 15 such events, occurring between the hours of 3 PM – 9 PM per month. Participating (i.e. not opting) out in all events in a given month would entitle a Participant to and additional $20/mo for the four DR months.

In total, customers could earn $120 ($10/mo for 12 months) and $80 ($20/mo for 4 DR months) for a total of $200 in Baseline Tier. The total amount of the incentive remains unchanged; only the structure is different.

Advanced Tier

This tier is referred to as Active Managed Charging, where participants work with their utility to set a daily charging schedule that avoids on-peak charging. Customer inputs the State of Charge (SOC) that they need and a Time Charge is Needed (TCIN) and the utility does the rest. Participant can set these as default, for example, “every day, I need 100% charge at 7am” and the utility does the rest. They can also adjust these inputs as needed. Participant is responsible for not overriding the schedule where that act of overriding causes them to charge on-peak. Participants are able to opt out in such a way twice in a given month and still retain their incentive – any more and they forfeit the incentive in that month. There must be a minimum of two at-home charging sessions during the month. The incentive is $25 per month or $300 per year.

Peak time is the same 3 PM – 9 PM as in the Baseline Tier.

Of the comments noted in the docket, the most interesting was from DEEP, which “opined that rather than limiting charging under this tier to solely off-peak hours, the Advanced Tier should instead allow charging during all hours and provide dynamic managed charging to real-time grid conditions.” That would be an optimal approach as, for example, it would take into account weather and distributed energy resource contributions, rather than the current flat approach of set time periods. Ultimately, that is the way we need to go.

Note: Purchase, installation, telematics enrollment incentives are unchanged. In the original docket there was an enrollment option involving a device that would be placed on a dumb charger. There is no sign that one has been approved. There was no mention of anything about it in the participation data.

Additional Funds

Eversource and United Illuminating, the electricity distribution companies or EDCs, have reported high rates of participation for the DCFC (level 3) part of the program, as well as for the installation of level 2 chargers at Multiple Unit Dwellings (MUD). The MUD incentives apply to buildings with more than 5 units and are governed by the rules for commercial incentives. The Public Utilities Regulatory Authority (PURA) has authorized making more funds available in the near term (by accelerating funds designated for other years). Eversource and UI have compiled waitlists for applications received subsequent to funds depletion which will now be able to be included.

Leasing Program for Level 2 Chargers at MUDs

MUD = Multiple Unit Dwelling.

For these dwellings, defined as having 5 or more units, PURA has directed the EDCs to implement a leasing program for EVSE (chargers) as of February 2023. It is felt that some buildings may find it challenging to foot the upfront cost for multiple chargers/ports, even with the incentives and that leasing could ease overcome that. Furthermore, it allows the homeowner associations or building owners to gain experience with charging and tenant interaction.

The leases will be offered for 5 years, followed by an option to renew for another 5 years (at a lower price to reflect depreciation). At the conclusion of the second lease period, the dwelling will have the option of buying the chargers or allowing the EDC to repossess them.

During the lease period, the EDCs are obligated to engage a third party to maintain the equipment.

These are the prices listed in the December docket for the first 5-year term and are not final. Note that they are reflective of the distance between the EVSE and electric service.

Managed Charging for MUDs

How to charge for the power and offer incentives for load-shedding are complicated in an MUD setting, given that incentives are not always aligned between landlords and tenants, and there could be competition between tenants for less expensive charging slots. The EDCs have been directed to propose a voluntary opt-in managed charging program for MUDs for review by May 1 and implementation by July 1, 2023.

Rivian Service Center Stalled By Dealership Lawsuit

We’ve seen this movie before.

In a replay of what we recently saw with Tesla, a lawsuit by an auto dealership has stalled the opening of a service center by a company that employs a direct sales business model. As reported in the GreenwichTime, the Town of Shelton approved a permit for Rivian to build a service center and this was appealed by Mario D’Addario Buick, Inc. As noted in the article, the complaint states that the facility will engage in the “sale of new and used Rivian vehicles in violation of Connecticut law.”

Tesla previously received a permit from East Hartford to open a badly needed second service center in Connecticut. Hoffman Auto promptly filed an action specifying a similar basis. East Hartford subsequently withdrew the permit and Tesla did not further pursue the matter. The company continues to scout for another suitable location.

Of course, both Rivian and Tesla know the law and don’t have plans to violate it. However, if the law were to be changed, and it has come before the legislature repeatedly (thus far unsuccessfully), their use of the facilities may change accordingly.

There is a difference between the Rivian and Tesla cases, which is that Rivian plans to use the proposed facility to deliver vehicles bought online. In Texas, another state that bans direct sales, Tesla has been able to deliver new vehicles at its service centers. They do not make deliveries in CT.

With a hat-tip to Philip K. Dick who coined the phrase, pre-crime refers to knowing someone is going to commit a crime they haven’t yet committed, and is in the realm of science-fiction where it belongs. In our version of reality, it amounts to dealerships using the franchise laws pretextually to make getting these vehicles serviced as inconvenient as it is to buy them. It is part of the dealerships’ continuing campaign to stifle competition and consumer choice.

Can Leasing Be a Workaround for the IRA EV Incentive Restrictions?

Post by Barry Kresch

This notion was floated a while back and I dismissed it as a fringe theory. However, it seems to be gaining traction.

The EV incentive is complicated, confusing, and a moving target. There are a lot of rules for consumers to understand. Manufacturers have to re-orient their supply chains in a hurry if they want to be compliant with battery and final assembly rules. And the IRS has not yet finished its battery-related rule-making, leaving us in a state of partial implementation for at least 3 months. Even a high level listing of all the rules is exhausting to read: North American final assembly, battery critical minerals sourcing percentages, entities of concern rule, battery North American manufacturing percentages, MSRP cap, income caps, confusing body-style rules, transfer option. It’s a lot.

These rules apply to consumer purchases of a new EV. There are also incentives for commercial EV purchases. There are some important differences, but the salient point for this post is that none of the consumer restrictions apply to commercial. When an individual leases a vehicle, the incentive goes to the dealer/lessor, which is a commercial entity. So does it, therefore, get classified as a commercial transaction? Consumer Reports writes that they have been told this is the case by a spokesperson at the Treasury Department.

The commercial incentive is 30% of the cost of a BEV/15% of the cost of a PHEV or the incremental cost over a replacement vehicle. These are capped at $7500 for vehicles under 14,000 pounds (light duty) and $40,000 for vehicles over 14,000 pounds. Per the Department of Energy, all light duty BEVs and most PHEVs qualify for the full $7500.

In addition to Consumer Reports, this has been reported in other major press outlets and is being discussed seriously by other organizations that are closely reading the IRS text. Senator Joe Manchin is hurling thunderbolts that he adamantly opposes this interpretation, that it goes against the intent of the law. He’s right about that, of course, but that may not matter. It’s the IRS’s ballgame now, (Section 45W). It could potentially be addressed legislatively but nothing is happening in this Congress (as of this writing, not even a Speaker). The fact that Manchin is that exercised is an indication that he is taking this seriously.

This seems to be the relevant language from the IRS:

“Q5. Is a taxpayer that leases clean vehicles to customers as its business eligible to claim the qualified commercial clean vehicle credit? (added December 29, 2022)

A5. Whether a taxpayer can claim the qualified commercial clean vehicle credit in its business depends on who is the owner of the vehicle for federal income tax purposes. The owner of the vehicle is determined based on whether the lease is respected as a lease or recharacterized as a sale for federal income tax purposes.”

A typical 36 month lease should qualify (i.e. not be in danger of being reclassified as a sale).

Leasing has always been a way for someone who does not have enough tax liability to make use of the full tax credit because it goes to the dealer. It is up to the buyer to press the seller for transparency regarding how much it is lowering the monthly payment as the seller is not legally obligated to pass it on to the consumer.

This is a major development. We will follow this and provide updates as they become available. If anyone tries to obtain this incentive, please share your experience with us.

One other note – while we are in this period before the battery minerals sourcing and manufacturing rules go into effect and the old battery rules are still in force (meaning incentives are most likely higher than they will be once the rules are implemented), Treasury has announced that eligibility for these temporarily higher incentives requires physically taking possession of the vehicle (the IRS language is “placed in service”) before the rules are in effect. A firm contract is not good enough, as it was regarding the August 16th start of the final assembly rule.

The photo at the top of the post is of a Hyundai Ioniq 5. It has been a well-received EV but is currently excluded from incentives because it is imported (though they’re building a factory in Georgia). It is one of the more significant models to be affected by this prospective development.

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.