Photo at top taken under one of the solar canopies at the Hotel Marcel with the building in the background: Daphne Dixon – Live Green CT, Paul Wessel – Greater New Haven Clean Cities, and Analiese Mione, Barry Kresch, Bruce Becker, and Paul Braren from the EV Club who organized the symposium.

“Sold-out” Conference

Well, it was free, but there was more interest than we were able to accommodate and we had to close registration. Early feedback has been extremely positive. such as this message:

“I attended the NEEVS yesterday and had a fantastic time. What a great lineup of speakers/presentations and lots of fun at the car show as well! I’m looking forward to future symposiums in the coming years. …. Again, I had a great time at the symposium (and the lunch was incredible).”

We would like to thank our sponsors: Live Green CT, Greater New Haven Clean Cities Coalition, EVConnect, Maxwell Vehicles, and ChargePoint, without whom we would have been munching on stale pretzels.

Of course, we also thank our attendees for joining us and being an engaged and interactive audience.

The Hotel Marcel provided excellent, eco-friendly hospitality. For anyone who may be nervous about switching from a gas to an induction cooktop, the quality of the food attested to how good induction cooking can be. Even the chafing dishes were induction.

We’ve had some comments about how a small committee was able to put together a jam-packed agenda in a short period of time. If anything, the challenge is less about finding content than winnowing it down to fit within our time parameters. As it was, our 3-hour speaker agenda took 4 hours with too little time for Q&A.

We want to give a shout-out to Rich Jordan, president of the CT Tesla Owners Club, for his help with the car show, to the Westport Police Department and their Model Y patrol car, and to Tesla for bringing vehicles for test drives.

Converted EV Van

Hotel Marcel architect and developer, Bruce Becker, talked about how Maxwell Vehicles converted an ICE van to electric, using a salvaged Model 3 battery and drive train.

Out of Spec Dave

YouTube and X (Twitter) personality, Out of Spec Dave from Norwalk, CT, talked about his adventures as a road warrior, having driven lots of different EVs and experienced the many faces of public charging. Not all of them are happy faces. Part of the charging experience is knowing before you get to a charger, when deciding where to charge, whether a charger is in service and how fast it is charging. There is a gap in the eco-system here. He has launched the “Rate Your Charge” newsletter. Take a video or photo of your charge, describe your experience, and tag @outofspecdave on Twitter. The data are compiled and this weekly report is issued. Take a video or photo, provide details and tag them (@outofspecdave) on Twitter. These are being compiled in a weekly report posted to Twitter. For those not on Twitter, use this Google Doc: https://docs.google.com/forms/d/e/1FAIpQLSd9nE1JOulqidJNacpL230TdswfnnaWBTjdGIaky3ffkHF6EA/viewform?pli=1

PACE

Mark Scully from People’s Action for Clean Energy (PACE) spoke about their program to help municipalities decarbonize and save money in the process. This slide illustrates the cost savings projected in a transition to renewables.

United Illuminating

We get many questions whether widespread EV adoption will crash the grid. While the grid does need to be modernized (and the Public Utilities Regulatory Authority has a grid modernization docket), Rick Rosa from Avangrid/UI discussed using EVs to optimize the grid. This slide is an example of optimization vs curtailment. EVs will be beneficial to the grid for the foreseeable future and, as such, there are incentives for EV owners to participate. See our incentives page for a more detailed description of the program with links to sign up for the residential or commercial incentives. This program is also offered by Eversource and it can offset the costs of buying and installing a 240 volt charger, as well as pay an ongoing incentive to participate in their managed charging programs.

Zoning for EV Readiness

Daphne Dixon of Live Green CT, who has done a lot of work with municipalities, gave a presentation that illustrated the complexity of zoning for EVs but also highlighted the significant benefits as noted in the example below.

All Electric, Zero Emission Home

Paul Braren provided a detailed description of his journey to create an all-electric home (solar roof seen in the photo, powerwall/VPP, 2 EVs, insulation for home and windows, heat pumps, smart panel, electric garden tools) and capture the available incentives. It has been a complicated road. This links to his full presentation.

IRA Transfer Provision

In his update on incentives, EV Club President, Barry Kresch, discussed the implementation of the transfer provision in 2024, and how it changes a tax credit into a point of sale rebate.

Advanced Clean Cars II

CT is a participant in the California Air Resources Board emissions requirements. It is now in the process of implementing the second phase of these regulations, commencing in 2027 through 2035. The rules require manufacturers to sell increasing amounts of zero emission light-duty vehicles, reaching 100% in 2035.  There is a separate set of regulations that would significantly lower emissions for medium and heavy-duty vehicles during this same period. Charles Rothenberger, Climate Attorney for Save the Sound, explained these regulations. The legislature has authorized CT DEEP to proceed with the required multi-step process. The slide below shows where we are and the remaining steps.

There is some concern that when the rules go back to the legislature, in which a bi-partisan review committee is supposed to examine them for legal sufficiency, that there may be an efforts by opponents to short-circuit the approvals process. More on that to come.

We hope you see you next time!!!

Tesla Model Y Leads Rebated Vehicles

CHEAPR set another record in June in terms of rebates awarded with 421 rebates, way exceeding the previous high water mark that occurred just one month prior of 286.

The best-selling EV in the country, the Tesla Model Y, leads the field by far with 228, or 54% of all rebates. Other models with double digit rebates

• Tesla Model 3 – 51
• Chevy Bolt – 40
• Toyota RAV4 Prime – 33
• Volkswagen ID.4 – 15

E-Bike Rebates Sizzle

Things you can do in 13 minutes –

• Walk a mile
• Complete a simple crossword
• Reheat last night’s leftovers

Or

• Blow through the entire e-bike voucher budget!

One of the new components of CHEAPR authorized last year in Public Act 22-25, e-bike rebate vouchers, went live in July. It was available for all of 13 minutes before the entire budget was depleted with 6300+ applications received like a bolt of lightning. DEEP had originally budgeted $500,000 for this first year, but increased it to $750,000 when the strong demand became immediately clear. Still, that only extended the shelf-life by a scant few minutes.

Still Awaiting Traction for LMI rebates

There were only 4 of the supplemental Rebate+ incentives awarded to individuals who are income-qualified or live in distressed communities. There is hope for much higher numbers. We still counsel patience. DEEP has reported a good response with respect to the pre-qualification vouchers and the vouchers are good for a year. The public dataset does not contain information on the number of approved vouchers. The 4 incentives were all for new vehicles.

Fleet Rebate Postponement

The one new program component that still awaits launch is the fleet incentives. The eligibility is wide – commercial, non-profit, municipal, tribal entities. The limit is 10 incentives in a single year and 20 total. The standard CHEAPR incentive applies (i.e. not the supplemental), as does the $50K MSRP cap. Reminder, MSRP is defined as the base price of the trim level ordered without accessories. The light-duty program launch had been expected imminently, but DEEP is taking a step back. In the wake of the overwhelming e-bike response, they are looking to be prepared in the event of a robust response.

There is also a medium and heavy-duty vehicle component to this program. This will launch sometime next year.

Burn Rate Running Hot

At the September Board Meeting, DEEP expressed some concern about funds depletion as the program gave out $874,250 (not including e-bikes) in the month of June. They probably don’t need to worry, at least for a while, as Tesla has withdrawn the Model Y standard range. The Tesla website now only lists the long range and performance trim levels, neither of which qualify for a CHEAPR incentive.

The Symposium is Sold Out – People Can Still Come for the Car Show

Get charged up at NEEVS, the ultimate gathering for EV enthusiasts, policy wonks, and all who seek cutting edge guidance on decarbonization.

Please join us at the first annual Northeast Electric Vehicle Symposium (NEEVS) at Hotel Marcel in New Haven on September 9, 2023. EV enthusiasts, electrification and decarbonization advocates, sustainability volunteers and professionals, municipal employees, real estate owners and developers and policy wonks are invited to join us.

Bruce Becker is the lead architect and owner/developer of Hotel Marcel in New Haven, the country’s first zero emissions and Passive House hotel, and Chairman of the EV Club of CT. Bruce will welcome guests as they enjoy a light buffet lunch, and briefly share his approach to hotel e-mobility at Hotel Marcel. Guests have access to Tesla Superchargers, Level 2 chargers under a solar canopy and a custom electric shuttle van.

You will learn firsthand from expert guest speakers about:

1. Hotel Marcel’s guest experience in e-mobility,
2. The state of public EV charging and opportunities for improving it,
3. The latest updates in state and federal EV/EVSE incentives and V2G,
4. Best practices for transitioning vehicles and homes to all-electric,
5. How to move municipalities to 100% clean, renewable energy,
6. The societal and environmental benefits that proposed regulations for light, medium and heavy-duty vehicles under Advanced Clean Cars II (ACC II) provide for Connecticut.
7. Zoning for EV readiness

Date: September 9, 2023

Hours: 12:00-4:30

Host: Hotel Marcel, 500 Sargent Drive, New Haven, CT 06511

Organizer: EV Club of CT

Partner: Tesla Owners Club of CT

Thank You to Our Generous Sponsors: Hotel Marcel, Live Green CT, EV Connect, Chargepoint, Maxwell Vehicles, and the Greater New Haven Clean Cities Coalition.

Speaker Schedule:

2:05-2:30: Charles Rothenberger, Climate & Energy Attorney, Save the Sound will present highlights of the Regulations for Light, Medium and Heavy-Duty Vehicles under Advanced Clean Cars II (ACC II). In July 2023, Connecticut became the latest state to initiate adoption of the Advanced Clean Cars II rule, which will benefit society by requiring manufacturers to increase sales of electric and other zero-emission models within the state over time, culminating with 100% of new sales being ZEV in 2035.

2:30 – 3:00: Daphne Dixon, Co-founder and Executive Director, Live Green Connecticut and Director, Connecticut SWA Clean Cities Coalition, will present about Zoning for EV Readiness, a must attend for municipal decision makers.

Networking and Car Show 3:00-4:30: Enjoy beverages and food at the hotel bar while networking with other guests, and head outdoors to the lot adjacent to Hotel Marcel’s Superchargers to enjoy the car show while networking with EV owners that are members of Tesla Owners Club of CT, the EV Club of CT and the Westport Police Department.

Governor Lamont And DEEP Host Press Conference To Announce CT Formally Adopting New Regs

This was not your typical press conference. It wasn’t a ribbon cutting for a new bridge, or better yet, for a new bank of DCFC charging stations funded by the NEVI (infrastructure) bill. It was about a wonky, weedy policy known as the California Air Resources Board Advanced Clean Car 2 regulations (ACC II). The Department of Energy and Environmental Protection (DEEP) was responsible for shepherding the process of CT adopting these (as directed by the legislature). As complicated as the regulations may be, they can be simply summarized: more stringent fuel-efficiency standards culminating with 100% of light duty vehicles sold being zero emission or low-emission by 2035. The new regulations also now cover medium and heavy-duty vehicles (MHD), and according to Commissioner Dykes of DEEP, diesel emissions will be reduced by 90%.

The other good thing about this is the agglomeration of states. This was noted in the press event but, perhaps, not with enough emphasis. Just as with the first set of CARB regulations, when you have California, New York, Massachusetts, Connecticut, and a number of other states, that ends up being 40% or more of the new vehicle market and it becomes a de facto national standard. Commissioner Dykes pointed out that air blowing into CT from the west is already “out of compliance.” States like Ohio or Indiana that will not be part of this alliance, nonetheless will be getting cleaner vehicles.

Left to itself, industry, at least this industry, will not move fast enough to mitigate transportation sector emissions, the effects of which are already being felt. It is imperative to have policy that both pushes the industry to move faster as well as giving it the certainty it needs to plan. The first set of CARB regulations led to air quality improvements but it didn’t address medium and heavy duty vehicles and it is now out of date. Adoption of ACC2 is an unambiguous win.

According to the League of Conservation Voters, adopting the California standards will reduce smog and air pollution by over 750 tons per year in 2035 and over 900 tons per year by 2050, and yield as much as $1.4 billion in avoided healthcare costs between now and 2050.

There is a public comment period that is open until August 23rd, 5 PM. Comments may be sent to deep.mobilesources@ct.gov.

CT EV Registrations pass 36,000

Commissioner Dykes said the number represents a 20% increase since January and 42% year on year. Not to put too fine a point on it, but we need more. The state hopes to have 500,000 by 2030. EV sales are climbing nationally and more models are being introduced all the time, but growth needs to turn sharply upward.

We do not yet have the underlying detail of these registrations.

NEVI (National Electric Vehicle Infrastructure) Update

Connecticut will have north of $50 million to spend on EV infrastructure courtesy of the Federal Infrastructure Bill. We’ve been anxiously awaiting news about when we will see actual results. The first phase of NEVI is to be devoted to building out fast chargers along major highway corridors. According to the newly appointed Deputy Commissioner of the Department of Transportation, Karen Kitsis, the rule-making is expected to be complete by the end of this year with shovels in the ground in 2024.

E-Bike Rebates Explode

The CT state EV rebate program, CHEAPR, recently added an e-bike incentive. It blew through its entire budget allotment, supporting over 6,000 rebates, within 13 minutes of its going live.

The following is a summary of what was reported in the recent CHEAPR board meeting.

Pre-Qualification Voucher Program for Income Limited Persons

This new program soft-launched on March 29th.

There have been supplemental rebates for income-limited buyers (often short-handed as LMI) for new EV purchases, as well as rebates for used EV purchases for several years. These have gotten almost no traction. From the beginning, concerns were expressed that the criteria (participation in certain government assistance programs) were too restrictive and the post-purchase application process, whereby the purchaser had to float the cash for the incentive (as well as live in some suspense that it would come through), were just not realistic.

Those complaints, along with the empirical data, led the legislature to direct changes to the program that became law in Public Act 22-25, passed in 2022. In addition to the government assistance program participation, an income option was added, specifically that households with income of up to 3 times the federal poverty rate would be eligible regardless of program participation. Some examples of 3x poverty: $43,470 for a single person household and $90,000 for a 4-person household.

DEEP reports this has led to an encouraging early response. This is based on vouchers awarded. It doesn’t definitively mean that everyone who received a voucher has used it. That was a subject of discussion when the LMI program was first implemented. Apparently, some other states that had used vouchers had seen low conversion rates, and there was concern about how wasteful the extra admin overhead would be. As of this writing, DEEP has only updated published rebate data through April 13th, and there are no recorded LMI rebates between the end of March and April 13th, so it is too soon to have any visibility.

The next step is for there to be a marketing push. A vendor has been selected and we’ll see how fast the information gets out.

Used EV Rebate

As noted above, the LMI program includes rebates for used EVs. The CHEAPR website indicates which EVs are eligible, just as it does for new EVs. Only vehicles that previously met the criteria for eligibility when new will be eligible as a used vehicle. We thought there might be a willingness to loosen this and it is disappointing this is not the case. We think it needlessly limits the options for the consumer. There is already a gating requirement in terms of income limits. This feels needlessly restrictive.

There are some details that we await. The MSRP cap was lowered, then raised over the course of the program. Is the eligibility based on the current cap or the cap in effect at the time? What if a model has had price changes?

Fleet Incentive Program

A major addition to the program was extending the CHEAPR incentives to fleets. This applies to private fleets, municipalities, non-profits, and tribal entities. Non-profits must provide a Certificate of Legal Existence to prove good standing. According to DEEP, the launch will occur sometime in the third quarter.

The cap is 10 rebates per year and 20 lifetime. The DEEP commissioner has some flexibility to raise the cap for an organization if it is determined to be warranted.

The fleet program applies to new vehicles and the standard rebate only. The MSRP cap of $50K applies here as it does with the consumer.

E-Bike Rebate

The first phase of the e-bike program is scheduled to launch on June 28th with a point of sale voucher for brick and mortar stores. Online sales will come along later. CT residents age 18 or older can apply for a voucher that can be redeemed for an eligible e-bike at a participating retailer. Check with your preferred e-bike retailer to see if they are enrolled in the program.

The base rebate is $500. That can be augmented by an additional $1000 for LMI individuals.

There is an MSRP cap of $3000.

Eligible bikes must have either a UL 2849 or EN 15194 certification. (A pending certification does not count.) This is an important requirement to ensure safe e-bikes are purchased. Generally speaking, and unlike with automobiles, there is a paucity of regulation at this time. There is a lack of awareness that there are unsafe e-bikes out there, and with lithium-ion batteries, you are literally playing with fire.

Update: According to Bloomberg, the program was fully subscribed within 3 days of launch.

Post by Barry Kresch

The Direct Sales Morgue is Enlarged By One More Year as Bill Dies in Committee

As the legislative session inches towards its conclusion on June 7th, we have been through another year without enactment of legislation that would permit electric vehicle manufacturers using a direct sales business model to open stores in CT. These bills would permit manufacturers of exclusively battery electric vehicles (BEVs) that do not have an established dealership network (and are not majority owned by a company that does) to open company stores to sell and deliver directly to CT customers. These are companies such as Tesla, Rivian, and Lucid, with others on the horizon.

The proposed legislation would not affect the arrangements that existing dealerships have with their affiliated manufacturers. Governing the dealer/manufacturer relationship was the intent of the laws when they were passed long ago. All these dealer claims about how the franchise laws protect consumers is just smoke.

CT Insider, reporting on the current legislative session, quotes Transportation Committee Co-Chair, Sen. Christine Cohen characterizing the bill as “controversial,” that it would take up a lot of committee and floor time, and lack the votes to pass.

To quote former State Senator Will Haskell (D-Westport) when he previously raised direct sales, this bill is only controversial in Hartford. The way the bill was killed this year is the way it is always defeated – without being called for a vote. The legislators well know that their constituents support this bill. Many legislators are afraid to cross the dealerships, an entrenched and well-funded special interest. By working behind the scenes to prevent the bill from being called, they can have it both ways. They keep the dealers happy and they don’t have to go on the record opposing their voters, not to mention ding their environmental scorecard. (The CT League of Conservation Voters, the organization that publishes the scorecard, views direct sales a pro-environment measure, but the scorecard can only count votes that are cast.)

This blog wagers that a number of these behind-the-scenes “no” votes would turn to “yes” votes if taken publicly.

The CT Insider reporting also quoted Cohen as citing the actions of Tesla CEO, Elon Musk, as being a factor costing support. It is fair to acknowledge this. He is not helping matters. Direct sales used to be referred to as the “Tesla Bill,” but there are now other companies using this model. This blog sees this as a larger issue of consumer choice, EV adoption, and economics. It is the single most effective thing that can be done to accelerate EV sales.

Dealerships at times object even to their own affiliated manufacturers’ efforts to sell more EVs. For example, Ford’s new Model-e program that seeks to more aggressively position dealerships to sell EVs is moving forward, but it has engendered resistance and dealership lawsuits. The CT dealership trade association enlisted several CT federal and state elected officials to speak out publicly against the Ford plan.

Some legislators do openly support direct sales. Included among them is Rep. Keith Denning (D-Wilton), who submitted a direct sales bill this year, which was not raised by the Transportation Committee Chairs. This blog reached out to him and he provided this statement:

Delaware State Court Rules Direct Sales Does Not Violate Franchise Law

A nearby state, Delaware, now has direct sales. This came via the judiciary. A recent ruling from the Delaware Supreme Court held that the language in the franchise law applies only to existing manufacturer-dealer relationships and is not applicable to new companies that operate sans dealerships. Tesla filed the lawsuit.

For this to have a chance to happen in CT, Tesla or another manufacturer would have to file a lawsuit in state court. They are a legitimately injured party and would have the standing to proceed. The unsuccessful efforts to date in CT to legalize direct sales have only gone through the legislature. One potential downside is that if such an action were to be filed, the legislature would likely punt on dealing with it (which is basically what they’ve been doing anyway) until the process plays out. That could take some time. The Delaware case was appealed before it was taken up by the Supreme Court.

Massachusetts is another state in the region where direct sales came about via a lawsuit. However, if there is one takeaway from the Delaware ruling, it is that franchise laws are not uniform across states. The language of the CT law would have to separately be tested.

Consumers Support Direct Sales

The option of buying a vehicle via direct sales is overwhelmingly favored by consumers. When last the issue was polled in CT, 83% were in favor. Support cut across age, party affiliation and ethnicity. (The polling was fielded by public-opinion firm, GQR, with a sample of 500 likely voters and had a margin of error of +/- 4.4% at a 95% confidence interval. More detail is in the linked page.)

Testimonial Unanimity – When there was open testimony in 2021, 81 written testimonies were submitted to the Transportation Committee. If one excludes the 9 from individuals associated with the dealerships and the 3 from Tesla, Rivian, and Lucid, we are left with 69 from members of the public at large. All 69 of them were in favor of direct sales.

When Sen. Cohen remarks that the bill takes a lot of floor time (i.e. inconveniencing the legislators), the reason is that many people register to offer oral testimony. Public hearings package multiple bills into a day of hearings. When direct sales is on the agenda, it becomes a very long day indeed. In past hearings, some legislators have looked visibly annoyed, and some of them verbalized it, that they have to sit through more hearings about direct sales, where everyone but the dealers are in favor. Legislators, generally speaking, exhort the public to get involved. In this case they do, and ironically, it’s a problem for them. This was mitigated in a narrow sense in the short session of 2022, where by prearrangement, only a small number of people were permitted to testify.

Dealerships Now Seek To Block Service Centers

A more recent insidious development is that dealerships have mobilized to block direct sales manufacturers from opening service centers. They want to make getting the vehicles serviced as inconvenient as it is to buy them.

Hoffman Auto sued East Hartford when they granted a permit to Tesla to open a badly needed second service center to complement the existing one in Milford. East Hartford subsequently withdrew the permit and Tesla did not further pursue it. Dealer representatives showed up in force for a hearing in South Windsor regarding a proposed Tesla service center. More recently, Mario D’Addario Buick and TD Properties sued Shelton and Rivian after the Town granted Rivian a permit to build a service center. Rivian’s motion to dismiss is awaiting a ruling. The dealers latch on to anything they can to throw up roadblocks for these companies.

That New Tesla Service Center – It’s In Massachusetts

Tesla is building a new sales and service center in Chicopee, MA. The company was granted an approval by the Chicopee City Council on May 3rd. Chicopee is only about 10 miles north of the CT border off I-91. This location will be more convenient for customers in Hartford and points north than Milford. That sound you hear is those jobs and taxes going to MA. This will take some of the pressure off getting a Tesla serviced locally. It doesn’t change the fact that CT Tesla purchase customers have to pick up their vehicles in Mt. Kisco, NY.

Direct Sales = Greater EV Adoption

Every year there has been testimony before the legislature, the dealer representatives talk about how all-in they are for electric vehicles. Then every year, they keep not selling them, or not that many of them. When we look at the data, we see only modest growth.

Tesla has testified that an ideal scenario in its view is that Tesla becomes a smaller slice of a rapidly growing pie. That hasn’t happened. In fact, the Tesla share of registered EVs is higher now than when we began tracking it in 2017.

New Sierra Club Study

The Sierra Club recently released the third wave of its ongoing EV Shopper Study with fieldwork conducted in 2022. These studies have been fielded in 3-year intervals. Consumers visit or call dealerships to ask about EVs, see if the salespeople are able to answer basic questions, find out whether there is a charged vehicle available for a test-drive, etc. The findings of the new study are as disheartening as those of past studies.

• 66% of car dealerships did not have a single EV for sale. Keep in mind, this includes both new and used vehicles.
• To some degree, supply-chain issues persisted into 2022, but of the 66% of dealerships without EVs, 45% of them said they had no interest in selling EVs.

These numbers are exclusive of companies such as Tesla, Rivian, and Lucid that do not have dealerships, and which obviously want to sell EVs. Also, they are national numbers. The Sierra Club does break the numbers down by region, but the numbers in the Northeast were not that different from the overall profile.

Some dealers make an effort, but we are still a long way from where most or all dealers act like they actually want to sell EVs. This is consistent with what we have been seeing in our ongoing analyses of CT CHEAPR rebate data.

Atlas Public Policy – Direct Sales Would Remove an Estimated 42 Million Metric Tonnes of CO2

Atlas Public Policy builds analytical tools to help policy makers and businesses make decisions. Atlas, in conjunction with the Electrification Coalition, undertook an analysis to assess whether a state’s adoption of direct sales accelerates EV adoption. Their findings were that, indeed, it does. From the report:

• Consumers have reported poor EV buying experiences at dealerships,
• Dealers are incentivized to sell internal combustion engine vehicles rather than EVs due to the dealership revenue associated with future servicing needs,
• Dealer franchise laws add costs for consumers, and
• Giving consumers the freedom to buy via direct-to-consumer models leaves both consumers and manufacturers better off.

The report goes on to forecast what the emissions impact would be if direct sales were to be adopted country-wide. Because it is a forecast, it presents its findings as a range. The midpoint of the range would result in the removal of 42 million metric tonnes of CO2 in the period of 2023-2030.

Bloomberg Analysis

Bloomberg published an opinion piece entitled, “Car Dealership Laws Aren’t Fit for the Electric Age,” in which they looked at EV adoption in open vs. closed states. (The article is behind a paywall.) The results were quite striking with over 3X the EV adoption rates in states with uncapped direct sales, compared to those prohibiting the practice.

The legacy Automotive Industry Is Often Its Own Worst Enemy

One could be forgiven for thinking that the strategy of many of the established automotive companies has been denial.

Ford is a notable exception. They made the Model-e gambit, followed last week by the hugely consequential announcement that the company has negotiated an arrangement with Tesla to give Ford owners access to the Tesla Supercharger network, and that beginning in 2025, Ford vehicles will be manufactured with native Tesla-compatible connectors. In our view, the Supercharger arrangement is a smart move for both companies. It potentially could influence other companies to follow suit. (We understand that existing Ford EV owners will be able to get adapters. We would be interested in hearing from Ford owners who are readers of this blog about how and what Ford is communicating. Please leave a comment.)

CCS stands for Combined Charging Standard and NACS stands for North American Charging Standard. CCS is backed by most manufacturers. Where it says “Tesla” below, it is the NACS connector, which is the standard Tesla uses and has been pushing to be the universal connector, without much success until now. You be the judge of which is the more elegant design. Between Tesla and Ford (and, I suppose, I shouldn’t overlook Aptera; though they haven’t delivered any vehicles yet, they still get points), the majority of EVs on the road will have NACS.

Not all companies are moving aggressively like Ford. Stellantis is a major manufacturer, the owner of Jeep, Chrysler, Dodge, Ram, Alfa Romeo, Fiat, Maserati, and several others. And yet if we look at their profile in CT, they are nearly invisible. They have a modestly successful Jeep Wrangler PHEV and that is about it. (Stellantis represents 1553 of 30,017 EVs registered in CT as of Jan 1 – 1,200 from Jeep, 317 from Chrysler, 36 from Fiat. Only the Fiat are fully electric – BEV and they are not currently being manufactured.) Now, as they play catch-up – they announced a new EV platform – they are laying off thousands. From Yahoo Finance: “The company has about 56,000 workers in the U.S., and about 33,000 of them could get the (buyout) offers.”

Larger Environment

While we’re fighting over the right to buy an EV directly from the manufacturer, China is banning the sale of ICE vehicles that don’t meet its new, stringent emission standard (VI B) by July 1. That could send shock waves across the world as inventories of unsellable ICE vehicles grow. We are seeing states ban the sales of new ICE vehicles as of around 2035.

Closing Thoughts

How dealerships and the legacy automobile industry writ large will ultimately fare is up to them. If they innovate and compete, they’ll be fine. Some of them have embraced EVs, but judging by the data, not nearly enough. In CT, the dealership special interests have thus far been given the message that they can sit back and not worry about it, that change can happen on their timetable, negative consequences for those of us who live in the state be damned.

There are many EV Club members who own or have ordered a Tesla, Rivian or Lucid. For those of us who have made the trek to Mt. Kisco to pick up a Tesla, it stares us in the face that the jobs to build, staff, and maintain the facility are in New York, and the company pays property taxes to Mt. Kisco and a franchise registration fee to NY. Manufacturers selling directly, a large and fast growing industry, are not choosing CT to set up manufacturing facilities, despite our ports, roadways, railways, and highly educated and trained workforce. We lose twice.

Today’s headlines and accompanying disruptions in the oil and gas market punctuate the urgency of moving away from fossil fuels. Allowing direct sales will help CT meet its EV adoption objectives, create green jobs, reduce pollution, and, most importantly, it is what is right for the citizens of CT.

How Can You Help

We agree with Rep. Denning that a direct sales law is not anti-dealer; it is pro-consumer and pro-CT.

We have to ask ourselves why we’re okay with making it harder for CT residents to buy an EV, not easier. Why are legislators ignoring the will of the people and bowing to the dealerships?

Our EV Club is not a political organization (501(c)4). We do not have paid lobbyists prowling the Capitol. We can only operate as a grassroots organization evangelizing for EV adoption, promoting free competition, and being open to new and innovative ways of doing business.

You can be sure that legislators hear from the dealerships and their lobbyists whenever there is a bill. They have to hear from as many of us as possible. Even if you have emailed or called previously, every year is a new game.

The 2024 legislative session will be a short session, which happens in election years. The rules are more restrictive and there may well not be a direct sales bill introduced. But as we get into election season, that will be a good time to make your voice heard.

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.

Updates on CHEAPR Implementation

Almost one year ago, SB-4 was voted into law as Public Act 22-25, an environmental omnibus that made extensive changes to CHEAPR, the state EV purchase incentive program. The easiest change, raising the MSRP cap from $42,000 to $50,000 was implemented in July. The other changes required extensive platform revisions and we are just now getting to the point where these other items will go live. Below is the slide from the deck that DEEP presented that outlines the timetable.

Revised income-limited (LMI) program

The program remains on track to launch the revised income-limited program, including a pre-qualification voucher in second quarter. Our guess is that it will likely be toward the end of the quarter, especially since they have yet to make a final selection of a marketing vendor. These LMI rebates are known as Rebate+ New and Rebate+ Used.

To recap, the new LMI program expands eligibility to individuals or households earning up to 3 times the federal poverty rate. The current program requires enrollment in designated governmental assistance programs, which is more limiting. The other important addition is the ability to become qualified before the purchase and get a voucher. This way the incentive will be cash on the hood like the standard CHEAPR rebate. The current post-purchase process will be retained, as well, for the sake of continuity. We suspect it will fall away in time but that will be based on utilization data.

The LMI rebate for new vehicles is $2000 that gets added on to the standard $2250 rebate. There is also a $3000 rebate for used EVs. Used rebates can only be obtained if the vehicle is purchased through a dealer (either a new car dealer that sells used vehicles or a used car dealer), in other words, not through a private sale.

The LMI incentives have really struggled for traction since they were introduced, with only 8 being given out during calendar 2022 (5 new, 3 used). This change is sorely needed, along with effective marketing.

Expanded Options for Used EVs?

The eligible used vehicles for the Rebate+ Used have been restricted to vehicles that were eligible for the standard rebate when new. We never saw the point of that since these are income-limited rebates. We feel any used EV should be eligible. We have spoken to DEEP about this and we expect there will be a revision here, which would be effective when the new Rebate+ program goes online in a couple of months. Stay tuned.

Expansion to Non-Residential

At present, the incentive is available only to individuals. In the third quarter, referenced in the slide as “CHEAPR Fleets launch,” eligibility will be expanded to businesses, fleets, non-profits, municipalities, and tribal entities. This could potentially be a huge pool of purchasers. These entities are capped at 10 incentives in one year and 20 total.

E-Bikes

The state will incentivize e-bike purchases, something that was left out of the federal IRA legislation. This will be a gradual rollout over the remainder of the year, with possible tweaks continuing even after that. It is possible for an LMI individual to get as much as $1500 towards the purchase of an e-bike with an MSRP of no more than $3000.

Program Performance

CHEAPR has been underperforming for years, defined as spending below its budget. It started to happen in a serious way in 2019 when the MSRP cap was lowered from $50K to $42K. The reversal of that as of July 2022 is helping, though we are in a more difficult environment at this time with higher prices and constrained supply chains.

The program rebated $1,894,000 for 1174 rebate instances in 2022. This remains less than the program’s old budget of $3MM annually, and way less than its new budget which is between 2-3 times that, depending on how much is collected in greenhouse gas fees. Not to mention that unused funds rollover. There is a substantial available war chest to fund the expanded program.

The 1174 rebate number is less than the 1408 in 2021. However, the pace picked up in the second half of 2022 after the MSRP cap increase, increasing 69% (737 vs 437) over the first half, and slightly higher than the 696 of the second half of 2021. The 216 rebates in Jan and Feb of 2023 are pacing well ahead of the corresponding period from 1 year ago when the number was 116.

34% Utilization Rate

The biggest area of concern is the utilization rate. which DEEP reported to be 34%. In other words, 34% of rebate-eligible vehicles actually got a rebate. This has been an ongoing pain point and has been the single biggest reason that it has been difficult to budget for this program. There could be several reasons for this: lack of promotion/consumer awareness, lack of dealership participation, and potentially important, we have heard that not all finance companies, which hold the title to leased vehicles, have set themselves up to deal with the rebate.

The changes to the program made in PA 22-25 are good ones and we will do our part to get the word out.

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.