The New CHEAPR

CHEAPR Board Meets Following Passage of Public Act 22-25

Following the passage of SB-4/Public Act 22-25, the Department of Energy and Environmental Protection (DEEP) and the CHEAPR board met on June 16th. The legislation made extensive changes to the state’s purchase incentive program, which we have detailed in earlier posts such as this one. Now comes the time for rule making to fill in the gaps and the implementation logistics. Though the legislation has an effective date of July 1, the fact is this will be a work in progress for the rest of the year. So with that preamble, this what we know to this point as well as our thoughts about changes we would like to see that follow the new legislation

MSRP Cap and Other Changes

  • The MSRP cap increase to $50,000 is the easiest to implement and it should happen at some point over the summer. We will update everyone when that is the case. (Update: This is now in place and updated on the CHEAPR website.)
  • The enhanced funding from the additional clean air registration fees and proceeds from the Regional Greenhouse Gas Initiative proceeds begins next year. However, the program has been so under spent, and there is still an implementation period, it is unlikely to deplete funds before the new funding stream begins. DEEP is currently sitting on over $5MM of funds, well above current needs. New expenditures flowing from program changes will be folded into the program as they are ready between summer and the end of the year. It is our bet that the year will end with a surplus.
  • DEEP is preparing an RFI for the new e-bike incentive with projected implementation by the end of the year.
  • The income limited (Rebate+) incentives will be transitioning from an after the fact reimbursement to a pre-qualification/voucher program. This is great news. It requires a new process be developed and implemented, which will take at least until Q4, though technically, the eligibility requirements will have been changed before then. In other words, some of the folks becoming newly eligible could access the incentive but would have to float the cash.
  • Expanded eligibility to municipalities, businesses, non-profits, and tribal entities are designated as “mid-term” changes and will likely happen in several month’s time.

This graphic from DEEP indicates which new EVs will be rebate-eligible as a result of the change in the MSRP cap. Keep in mind that eligibility is determined by the base price of a particular trim level. Ordering options does not disqualify a vehicle from being eligible. Buying a trim level with an MSRP above the limit would. Almost all vehicles nowadays have multiple trim levels. Although we don’t recommend doing this, if you pay a dealership premium over MSRP, that does not count towards the cap. The graphic is based on registrations from 2021. It will not pick up the newest vehicles which doesn’t mean they are not (or should not be) included! If you encounter a problem in obtaining a rebate for which you should be eligible, please let us know.

Newly eligible vehicles for CHEAPR

Rebate Structure

  • It is DEEP’s responsibility to determine rebate structure and amount. We expect the amount of the income-limited rebates to increase.
  • The consumer’s first interaction with CHEAPR is likely to be with the home page and what they see there is not what most people will get. For some reason, DEEP, from the beginning, has been intent on selling the highest possible rebate number that only applies to a minority (or zero in the case of fuel cell) of people.
  • There has been an overly complicated multi-tier rebate structure with base, adders, and supplements. A simpler structure of standard rebate, Rebate+ New, Rebate+ Used would be preferred. Rebate+ New would simply be higher than the standard rebate. Each of these would have a BEV/PHEV version. That’s enough.
  • For Rebate+ Used, since recipients of this incentive are already income screened, don’t restrict eligible vehicles. Let’s make it easy for people to use this by not restricting it to vehicles that were originally eligible for a standard CHEAPR rebate as is now the case. There is some concern about battery degradation for older vehicles. There are tools available to address this, which dealers should be encouraged to adopt.
Reporting
  • There have been inconsistencies in the reporting from time to time. For example, in the recently released April data, the Tableau chart has 51 rebates. The Excel file has 59 rebate submissions (and 48 sales).
  • Rebate+ New is reported as a separate line. So the number of rebates exceeds the number of people receiving rebates. There have been so few of them that it hasn’t made much difference. If the new LMI rebates are more successful, it will color the data. If the suggestion about Rebate+ noted above is adopted, it would solve this.
  • Add new fields for “Rebate Type” and “Dealership.” The former will make it easier to parse the data. The latter will save the FOIA exercise that we go through each year.
Rebate Utilization
  • DEEP is investigating reports that some of the finance companies that hold title to the vehicle for leasing customers are not participating in the rebate. Dealer representation on the board, possibly in concert with their affiliated manufacturers, should be proactive about working upstream with the finance companies to change this.
  • Dealers should take it upon themselves to be proactive about alerting DEEP when new eligible vehicles or new model years of eligible vehicles are about to start delivery. That way consumers won’t get caught as a result of a dealer not being able to process a rebate because the database has not been updated.
  • DEEP issues a forecast periodically to project expenditures and use that for guidance in setting program parameters. The actual expenditures have come in substantially below the forecast every year since the current regimen was established in 2019. For various reasons, that may not continue to be the case. But even if the program is running hot, it will be easy to identify in plenty of time to make adjustments and avoid funds depletion.


Presentation for Utility Commercial Incentives for EV Charging and Installation

Eversource UI - Commercial EV Charging for EV Club of CT 5.2022 FINAL



A Return Engagement With Eversource and United Illuminating

Commercial and Multi-Family Residential Is the Focus

The two major Connecticut electric distribution companies (EDCs), Eversource and United Illuminating, will speak to the club at a virtual meeting to be held on May 10th at 7 PM. (EDC is now the term of art, supplanting utility.) This applies to business fleets, businesses providing workplace charging, municipalities, nonprofits, and apartments/condos with 5+ units.

These incentives are part of the program called the EV Rate Design that was developed by the Public Utilities Regulatory Authority.

Free registration is required at this link: https://us02web.zoom.us/meeting/register/tZ0kdOysqDgoH9X_1SiBnVxnb75LuntzhG-_

The meeting is open to the public.



SB-4 Passes the Legislature

Major Changes to CHEAPR Incentive Program Coming

The big environmental omnibus bill with 16 parts to it passed the legislature today. It awaits the signature of the governor.

CHEAPR Highlights

  • Eliminates the program’s sunset date, which was December 31, 2025.
  • Expands the board and turns into a strictly advisory body. In other words, DEEP makes all the decisions.
  • MSRP cap is raised from $42,000 to $50,000. (It remains at $60,000 for FCEVs.)
  • Loosens eligibility for income limited (known as LMI) rebate eligibility. The current program, which has awarded very few rebates, requires someone to be using certain government assistance programs, such as SNAP (food stamps), Operation Fuel, and others. It now adds an income threshold of 3 times the poverty level, which translates to $83,250 for a family of 4 or $40,770 for an individual.
  • Adds a minimum $500 rebate for e-bikes (DEEP has discretion to modify it) for an e-bike costing no more than $3,000. This rebate is intended for income limited individuals. (The legislation isn’t totally clear – it says “prioritize granting incentives” to these individuals.)
  • Raises the CHEAPR budget considerably. CHEAPR will now receive the entirety of the GHG fees collected during registration. This would yield roughly $8 million compared to the current $3 million budget. But that’s not all. The program, beginning in 2024, will also get proceeds from the RGGI (regional power plant cap and trade) program that previously went to the Green Bank.
  • Incentive amounts are not addressed in the bill. They are set by DEEP.
  • Expands eligibility from the current residential owner only to include municipalities, businesses, nonprofits, and tribal entities. These new entities can receive up to 10 incentives in any one year with a total cap of 20. Entities operating entirely in environmental justice communities can be allocated additional incentives by DEEP.
  • DEEP is required to submit a report on program performance to the legislature on an annual basis.

A Number of Other provisions Are in the Bill.

Here are some of them.

  • Accelerates the transition to EV school buses. There is a requirement that by 2030 in environmental justice communities and by 2040 elsewhere, all school buses must be electric or “alternative fuel.” (Alternative fuel includes natural gas, hydrogen, propane, or biofuels. These are not zero-emission vehicles and we don’t agree with this aspect of the legislation.) A major change is that school districts are able to enter into contracts that have a maximum 10-year duration, up from 5. This enables EV school buses pencil out. The bill establishes a grant program to help municipalities fund the transition, which is administered by DEEP.
  • Prohibits purchase of diesel-powered transit buses as of 2024.
  • Requires 50% of the state’s vehicle fleet to be electric by 2026.
  • Adoption of the California emission standards for medium and heavy-duty vehicles. This made it through after failing last year and it is a big deal. It includes a voucher program to offset some of the cost for fleet owners to make the transition, funded out of the CHEAPR account. These same fleet operators will be able to tap the utility incentives to offset the cost of charging infrastructure and mitigate demand charges.
  • Traffic signal matching grant program. This helps municipalities fund smart traffic lights (which really do reduce emissions).
  • Right to charge legislation. The objective is to prevent condo associations or landlords from unreasonably refusing a request from a resident to install an EV charging station. We will be examining this in more detail to understand the various use cases.
  • The discount that all of us EV owners have enjoyed with respect to vehicle registration goes away.
  • In general, it makes available funds to leverage federal matching grants, something that last year’s failed TCI legislation would have done.

When Will CHEAPR Changes Be Implemented?

There is an open question regarding when the changes in the CHEAPR program will take effect. The bill has language about July 1, but that is unrealistic. The implementation logistics take time. The last time there were significant changes to CHEAPR, particularly the addition of the LMI incentives, it took 6 months to develop the back-end. Now they need to get into income-verification, which is something they tried hard to avoid previously. Aside from the restrictiveness of the current LMI eligibility, one of the barriers to its use is that unlike the main CHEAPR rebate, which is cash on the hood, it is provided after the fact, forcing an income limited individual to float the cash. If there is any way to make this a credit on the invoice, that would be a big improvement. There was a lengthy discussion at the board meeting in March about the administrative burden of doing that. The next CHEAPR board meeting is in June and perhaps some of these details will be addressed.

 

 



Westport Directive To Purchase EVs

A Directive to Consider Vehicle Emissions Prior to Acquiring a Vehicle

Westport has been a leader in electric vehicle acquisition, both in terms of its residents making it the number one Connecticut city in EVs on a per capita basis and the municipality acquiring electric vehicles for official use. As of this writing, the Westport Police Department has 6 plug-in vehicles and the Town has 2. (Subsequent to the directive being issued, the WPD acquired a second Tesla, a Model Y, for use as a patrol car.)

Sustainable Connecticut Certification

The impetus for this directive was the work being done that ultimately enabled Westport to be one of 12 cities earning a Silver Certification (highest level awarded) from Sustainable Connecticut. While this directive may not have the force of an ordinance, it was done expeditiously, and from what we know is being taken seriously.

Text of Directive

“The Town of Westport, with the Police Department at the lead, has changed its policy on acquiring vehicles. Prior to 2019 the Town rarely took into account vehicle emissions or efficiency (Miles Per Gallon, etc) prior to acquiring a vehicle. The upfront cost of the vehicle was priority, and total cost of ownership/use was not considered.

At this time the municipality requires all departments to follow the Municipal Fleet Improvement Strategy prior to choosing a vehicle. The Town owns or leases, in addition to the Tesla 3, two plug-in hybrid Toyota Priuses, two all-electric Chevrolet Bolts, one electric BMW I-3.

The Town of Westport and its departments recognize that Internal Combustion Engine (ICE) vehicles negatively influence air quality and emit particulate matter (PM), nitrogen oxides (NOx), and volatile organic compounds (VOCs). The American Lung Association states:

The Town and its departments, in an effort to decrease its contribution to such pollutants and to work toward the Town goal of Net Zero by 2050, follows this Municipal Vehicle Strategy:

With the replacement of every vehicle, or the addition of a vehicle to the municipal fleet, consideration will be given to the viability of an electric vehicle or hybrid vehicle over an Internal Combustion Engine vehicle.

The following will be considered when addressing viability:

Vehicle features (size, capability, performance, safety), vehicle emissions, equipment specifications, mileage efficiency, economic viability/cost (both upfront cost and total cost of ownership including fueling, maintenance, etc.), ancillary equipment needs (e.g. ambulance equipment, EV charger).

If you have any further questions, please do not hesitate to contact the Finance Department.”



The Tribulations of Buying An EV From A Dealership – Lived Experience

This is an email that was sent to the EV Club on March 9, 2022 by a member, Svetlana Wasserman, from Greenwich. It is the text of a letter that she sent to her CT State Representative, reprinted in full with her permission. It speaks for itself.

EV Direct Sales

I just wanted to share with you the letter I sent to my representative, Harry Arora:
Dear Representative Arora,
I’m writing to you with regard to the direct sales of electric vehicles bill, SB214. It is my great chagrin that this bill, which is a commonsense, free market, pro-consumer bill to allow manufacturers of electric vehicles to sell their cars directly to customers, has not yet passed. I have watched year after year as the lobbyists for the traditional dealerships claim that the direct sales bill is anti-consumer.
Please allow me to share my experience of attempting to buy an electric vehicle from a traditional dealer.
When I was shopping for an electric vehicle in 2020, like most auto-shoppers, I wanted to see it and test drive it. I called the Hyundai dealer in Stamford and asked if they had the Kona in stock. They did not. I asked them which dealership had the Kona. They said they could not tell me because each dealership is its own franchise and they did not share a database. They did tell me that if I was ready to place the order right now, they could have one delivered for me. I explained that I was not about to buy a car sight unseen.
Next I called the White Plains Hyundai. They did not have it in stock either. So I called the Fairfield Hyundai, and received the same answer. I begged to speak to a manager, and after explaining what I had been through, he offered to do some research to find which Hyundai dealer had the Kona in stock and call me back. When he called back he told me that the Hyundai in ALBANY, NY had a Kona in stock, and would I like to make an appointment to see it?
I asked this manager why it is so hard to see and test drive their electric vehicle. He told me it was because very few customers are buying it. Well, I wondered, how are customers going to be buying it when they can’t even see it?
Next I tried to test drive the Kia Niro at the dealership in Stamford. This time I was lucky because they had it in stock. When I arrived for my appointment, there was a bit of confusion because no one knew where the car was. Eventually, they found it….at a parking lot in another location. Someone drove over to get it, and after 30 minutes of this kerfuffle, the car showed up. After a very brief overview….because the dealer admitted she did not know much about this car…she turned it over to us to test drive. Except there was one problem. The car was at 7% battery and was sounding all kinds of alarms about being at low battery. Unfortunately, our dealer had no idea where the charge port was, and a second commotion ensued as the staff tried to find someone who knew how to charge the car. Eventually, they found a gentleman who did, and he asked us if we would like to test drive one of their gas models while we wait for the electric Niro to charge up.
Needless to say, we did not buy the Kona or the Niro from the traditional CT dealers. We drove across the border to Mt. Kisco, NY where we were able to test drive a Tesla and have a pleasant experience, and lunch in a NY restaurant to boot.
I don’t know why the auto dealers do such a terrible job promoting electric cars. Perhaps they just don’t know enough about them. Or perhaps they understand that sales of EVs harm their bottom line on the auto repair side of their business because electric vehicles require virtually no maintenance. I’ve driven EV’s for ten years and never had to do anything more than change the tires.
So if the dealers want to come before you and tell you they oppose this bill because they don’t want competition from EV manufacturers, or they don’t give a hoot about lowering emissions or meeting our state’s greenhouse gas targets, or they don’t want to promote job creation from the opening of new EV dealerships, that’s fine. Just please don’t let them tell you they are doing it to protect consumers.
I hope that you will do your utmost to help pass SB214 this year.
Kindly,
Svetlana Wasserman
Greenwich


Changes Coming to CHEAPR?

Help Needed to Remedy Persistently Low Rebate Levels

As can be seen in the chart at the top, the rebate count for January was exceedingly low with only 40 rebates, just over half of the low number of 78 from January 2021.

Continuing recent trends, the Toyota RAV4 Prime plug-in hybrid dominated with 17 rebates, with PHEVs overall accounting for 28 of the 40 rebates.

January 2022 CHEAPR rebates by model

Some changes could be afoot if SB-4, raised jointly by the Transportation and Environment Committees of the legislature, become law. There are several CHEAPR-related provisions included in the draft text. This is the description to the best of our knowledge.

Environmental Justice Focus

There is a statement of purpose now that focuses on environmental justice communities and lower income individuals. It is phrased as, “The commissioner shall prioritize the granting of rebates to residents of environmental justice communities, residents having household incomes at or below three hundred per cent of the federal poverty level, and residents who participate in state and federal assistance programs, including, but not limited to, the state-administered federal Supplemental Nutrition Assistance Program, state-administered federal Low Income Home Energy Assistance Program, or a Head Start program established pursuant to section 10-16n. The program shall provide rebates of five thousand dollars to residents of environmental justice communities.”

This represents a loosening of rules for income limited individuals, often referred to by the shorthand LMI. Currently, only participants in state and federal assistance plans are eligible for the Rebate+ incentives and very few have been used. There were zero in January. This expansion to 300% of the federal poverty level should expand the pool. The poverty level for a family of 4 is $27,750. Aside from an overly limited applicant pool, the rebate+ incentives arguably suffer from being awarded after the fact. If that can be addressed, it would be up to DEEP and the board to determine the process.

The LMI incentive is increased to $5000. Currently, a BEV carries a total incentive of $4250. It is not clear if $5,000 applies to everything.

Standard Rebate and Higher MSRP Cap

The standard rebate still exists and the rules are below.

MSRP cap increase to $50,000. This is the level where it was before being lowered in 2019 to $42,000, which began the chronic underspending and has more recently resulted in a program tilted heavily toward PHEVs. For example, over the past 4 months, BEVs accounted for 30% of CHEAPR rebates, but represent 59% of all registered EVs.

While the EV Club has pushed for a restoration of the $50,000 level for the past couple of years, in the current inflationary environment, it arguably could be higher. The average transaction price of an EV, according to Kelly Blue Book, is $56,437 (excluding Tesla). The marketplace has blown through the cap level.

Inclusion of Fleets

Expansion of program to include municipalities, businesses, organizations, and tribal entities. These organizations are entitled to up to 10 rebates per year up to a max total of 20. Organizations located in an environmental justice community can receive more at the discretion of the DEEP Commissioner. This could be a big help.

eBikes

eBikes are now included with a rebate of $500 for a bike costing no more than $2,000. In the Transport Hartford/Center for Latino Progress meetings, they have said that $2,000 isn’t enough for a quality bike. We support eBike rebates, along with their efforts to advocate for a higher price cap.

Higher Budget

The CHEAPR budget established in the 2019 legislation is $3MM per year, which has been underspent since the day it started. With the expansion of incentives described in this post, the spend level looks to be considerably higher. The proposed legislation authorizes the program to spend “a minimum of $3MM per year.” This indicates that more funds are forthcoming, but it doesn’t specify a cap. CHEAPR funding comes from the clean air fees collected as part of auto registration. These fees bring in about $8MM per year. $3MM have been going to CHEAPR with the rest having gone to the general fund. The new legislation designates that 57.5% go to transportation funding, though it is possible that other programs could be included.

Board

There are proposed changes to the board, specifically the inclusion of a “representative of an association representing electric vehicle manufacturers,” and a “representative of an association representing electric vehicle consumers.” For the former, we don’t know if this is a way to draw in the new EV-exclusive manufacturers or if it can be filled by an organization such as the Automotive Alliance which represents legacy OEMs. The manufacturer representative is appointed by the Senate President Pro Tempore. The consumer organization representative is appointed by the House minority leader. These replace 2 current positions appointed by the same individuals. Those positions are currently filled and it is not known if those people will depart.

There are also a couple of unfilled board positions, appointed at large by DEEP, and designated for representatives of an industrial fleet or transportation company.

The board is characterized as operating in an advisory capacity so it is not completely clear how much power they have when it comes to setting policy.

Other Legislative Items

In this and other bills, there are other items of note.

  • Right to charge legislation to make it easier for residents (owners and renters) to be able to install a charging station.
  • Adoption of California medium and heavy duty vehicle emission standards, pending results of DEEP analysis. (Does anyone seriously doubt we desperately need this??) Update: DEEP released their expected endorsement of this measure on March 9th. (This is bill HB-5039.)
  • Allowance for school to enter into 10-year contracts for EV school buses. Currently, only 5-year contracts are allowed. For EV buses, 10 years are needed to make the numbers work.
  • Accelerated purchases of smart traffic signals (yes, this really does reduce emissions).
  • EV charging stations that go beyond the federal Infrastructure bill and highway corridors to cover communities with lack of charging access.
  • Active transportation – pedestrian and bike paths.
  • Any project involving state funds must not add to carbon emissions. If it does, there needs to be offsets.

Advocacy:

We are supportive this bill. There are many good things in it. We would prefer an MSRP cap of $55,000 for CHEAPR to reflect the realities of the electric car marketplace, as well as a higher cap on the cost of eBikes.

Go here to find your legislators and contact information.

The Transportation Committee and the Environment Committee will hold a joint public hearing on Friday, March 11, 2022 at 11:00 A.M. via Zoom.  The public hearing can be viewed via YouTube Live.  In addition, the public hearing may be recorded and broadcast live on CT-N.com.  Individuals who wish to testify via Zoom must register using the On-line Testimony Registration Form.  Registration will close on Thursday, March 10, 2022 at 3:00 P.M.  Speaker order of approved registrants will be posted on the Transportation Committee website on Thursday, March 10, 2022 at 6:00 P.M. under Public Hearing Testimony.  If you do not have internet access, you may provide testimony via telephone.  To register to testify by phone, call the Phone Registrant Line at (860) 240-0590 to leave your contact information.  Please email written testimony in PDF format to TRAtestimony@cga.ct.gov.  Testimony should clearly state testifier name and related Bills.  The Committee requests that testimony be limited to matters related to the items on the Agenda.  The first hour of the hearing is reserved for Legislators, Constitutional Officers, State Agency Heads and Chief Elected Municipal Officials.  Speakers will be limited to three minutes of testimony.  The Committee encourages witnesses to submit a written statement and to condense oral testimony to a summary of that statement.  All public hearing testimony, written and spoken, is public information.  As such, it will be made available on the CGA website and indexed by internet search engines.

 

 



If You Want To Get a Tesla in Connecticut, Go to Hertz

Post by Barry Kresch

Photo: EV Club members with a pre-production Rivian R1T

Consumers Must Leave the State to Buy an EV Not Sold Through a Dealership

If a consumer wants to go electric and buy or lease not only a Tesla, but also a Rivian or Lucid, to name two of a number of new EV manufacturing startups, they have to travel out of state to do so. For years, CT Tesla customers have been schlepping to Mt. Kisco, NY to pick up their vehicles. It’s long past time for this to stop.

SB 214 – An Act Concerning the Sale of Electric Vehicles In The State

A bill has been raised in the Transportation Committee, SB No. 214, that will amend the law to allow EV-exclusive manufacturers without an existing dealer franchise network to open stores and sell directly to consumers, “direct sales” for short.

The EV Club of CT supports this bill as the current situation is anti-consumer, anti-free-market, holds our state back from achieving its EV adoption goals, and forces its citizens to breathe dirty air. The transportation sector is responsible for 38% of the state’s greenhouse gas emissions, not to mention other pollutants such as particulate matter, making it the most polluting sector.

EV Deployment Is Far Behind Target

The state has signed a resolution committing to getting 150,000 EVs on the road by 2025 and 500,000 by 2030. We have a long way to go as we are only 14% of the way to our 2025 goal and 4% of the way to the 2030 goal. If you want to see a depressing visual, click here. We need all hands on deck.

Background: The Franchise Laws

These laws are what currently prohibit Tesla and other companies from opening stores in CT. They were written long ago to protect dealerships from being bullied by their own affiliated manufacturers. These laws are not about the consumer and never were.

Protectionism

The language in these franchise laws requiring new vehicles to be sold by an independent business has been conveniently repurposed to exclude new EV manufacturers from opening stores in CT. In other words, the laws are now being used for protectionism.

The Federal Trade Commission has written, “A fundamental principle of competition is that consumers – not regulation – should determine what they buy and how they buy it. Consumers may benefit from the ability to buy cars directly from manufacturers – whether they are shopping for luxury cars or economy vehicles. The same competition principles should apply in either case.”

The Union of Concerned Scientists wrote, “…the dealer franchise laws represent not only a ban on Tesla, but a ban on all innovation in distribution methods.” Also, “There is no justification on any rational economic or public policy grounds for such a restraint of commerce.” They also cite studies showing that these laws restricting new distribution models serve to “raise the average vehicle cost by 8.6%.”

Dealer franchise laws have also been criticized from the right. The Koch brothers signed onto a letter opposing the Michigan version of this law. Their libertarian instincts chafe at the anti-free-market nature of these laws. And the CATO Institute has described these circumstances, “Where state legislatures are captured by rent‐​seeking incumbent market participants…” which impose “unnecessary transactions cost.”

These are but a few examples of the many organizations that support direct sales.

There has also arguably been spillover from the dealership laws as the Hoffman Auto Group, which owns dealerships in CT, has used them as a basis to file a lawsuit to prevent Tesla from opening a planned second service center in East Hartford. It seems Hoffman’s strategy is to make the experience of owning a Tesla as difficult as buying one.

Consumers Want The Freedom To Buy An EV However They Choose

Consumers have made it clear that they should have the freedom to choose where and how to buy or lease an EV.

In a poll taken last year, an identical proposed law, SB 127, polled at an 83% level of support among likely voters in CT. This support cut across party affiliation, age, income level, and ethnicity.

The Transportation Committee held a public hearing on last year’s direct sales bill, SB 127. There are 81 testimonies posted on its website. 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. Even with this overwhelming level of support, there was not a single Republican vote in the Senate and an insufficiency of Democratic votes to pass the bill.

Is The Dealership Model Better For Consumers?

During this current period of supply chain turmoil, many dealers have been marking up the cost of EVs (and presumably other vehicles) above MSRP. In a recent Washington Post article, it read “that Ford and GM have warned dealerships to stop selling vehicles above MSRP,” and that GM characterized these markups as “unethical.” So much for the multi-year argument dealerships been making that franchisees protect consumers. Below, from Edmunds.

Dealer Markups

One of the selling points for direct sales is that there is pricing transparency. You’re not required to give your email to get an online quote, you won’t be forced to visit a dealership to get a final price, you won’t have anyone pestering you afterward to buy the vehicle, and you’re not bombarded with after the sale upsells, or a surprise markup.

This opinion piece in the Washington Post by Ian Ayres, a law professor at Yale, discusses how for customers using dealer financing, the dealerships often markup the interest rate without disclosing this to the consumer. These hidden fees are legal, which they shouldn’t be, but their application in a discriminatory way is not. For example, Honda and Toyota have both settled lawsuits brought by the Consumer Financial Protection Bureau for more than $20 million because minority borrowers were charged higher interest markups than equally qualified white borrowers.

Watch What They Do, Not What They Say

Are dealers selling EVs? We would like to see them be proactive in their EV sales efforts. Every year, they come before the legislature and profess to be invested in EVs. They talk a good game, but what are they actually doing?

The NY Times published an article in 2015 entitled, “A Car Dealers Won’t Sell: It’s Electric.” That was 7 years ago and we have to make allowances for the possibility that things can change. Have they? Judging by data from the CT DMV, not so much. There are 8944 registered Teslas in CT. The number 2 make is Toyota with 3238. Of course, the Toyotas are plug-in hybrids. The make that is number two in BEVs is Chevrolet with 824. Teslas comprise 71% of all the battery electric vehicles currently registered in the state. In 2017, when I first began tracking this, that number was 61%.

This is from an article in TechCrunch, published in 2017, in which the first sentence proclaims, “Mercedes-Benz is the latest automaker to embrace electrification, announcing that it will be electrifying its entire vehicle lineup by 2022,” according to Mercedes-Benz chief Dieter Zetsche. There are 21,382 EVs in CT as of January 1, 2022. 75 are Mercedes.

The headline from a Bloomberg story in January reads,  “Car Dealership Laws Aren’t Fit for the Electric Age.” The first sentence: “More EVs are being sold in states that allow direct sales.”

And the manufacturers have their own imperatives. From Bloomberg Intelligence analyst Kevin Tynan, “If Ford could sell one million Lightnings a year, they wouldn’t,” he explains. “The reason why EV penetration is as low as it is in the U.S., is because that’s what automakers want it to be. People think it’s the consumer pulling — it’s not; it’s the automaker’s pushing.”

This really does matter when it comes to EV adoption, states with uncapped direct sales had 6.8 registered BEVs per 1000 registrations. Closed states had 1.4. CT is a closed state. How much closer to our EV deployment goals would we be and how much healthier would our air be to breathe if we were an open state? 

Will Direct Sales Drive the Dealerships Out of Business?

Whenever they testify, that is pretty much what they say will happen. There was one dealer who said during testimony that if direct sales passes, he will immediately start laying off employees. AND IT WILL BE THE FAULT OF THE LEGISLATORS!

The truth is the dealers want it both ways. They say their model is better for consumers. If they really believe that, then why the need for these restrictions in the first place? Then in the next sentence, they’ll say their businesses will implode.

Direct sales has been around for as long as 10 years in some states. So we have comparables! And the dealers are doing just fine in open states according to data from their own national association. A study by the Acadia Center documented this in states near to ours.

Closing Thoughts

The question of 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. A few of them have embraced EVs, but judging by the results, 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.

There are many EV Club members who own or have ordered a Tesla or are reservation-holders for 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. All of these companies stand ready to invest in CT. And others, as well. CT is sending the wrong kind of signal to any company that is part of the green economy.

Allowing direct sales will help CT meet its EV adoption objectives, will create green jobs, and, most importantly, it is what is right for the citizens of CT Consumers. Tell your legislative representatives that you support SB 214.

How You Can Help

Contact your state senator and state representative. This page will enable you to find out who they are: https://www.cga.ct.gov/asp/menu/cgafindleg.asp

Clicking on their name will take you to their contact form. Tell them you support SB 214 because allowing direct sales allows for free-market innovation enabling consumers to buy the EV of their choice in the manner of their choosing. It will accelerate EV adoption, create jobs, and let the companies of the new green economy know that CT is open for business.

Also, contact your mayor or first selectman and ask them to support SB 214 and contact the legislators who represent their town. Their voices carry weight with the legislature.

 

 

 



Webinars Scheduled for EV Charging Incentive Information

EV Charging Incentive Webinars

Eversource and United Illuminating are doing a series of webinars about the new incentives, the first of them only hours from this posting. They will cover similar ground as the session with the EV Club here, though they are segmenting them as you can see below. When the club presentation occurred, there were some rules that did not seem to be fully baked, so there may be some updated information here. Also, there is more likely to be some EV 101 that was not necessary for our group.

 

Webinar 

Date 

Time 

Registration 

EV Charging for CT Single Family Homes 

02/23/22 

7:00 p.m. 

EV Charging for Housing Authorities & Underserved Communities 

03/16/22 

12:00 p.m. 

EV Charging for Communities & Community Partners 

03/22/22 

1:00 p.m. 

EV Charging for CT Electrical Contractors 

03/31/22 

9:00 a.m. 

EV Charging for your Small Business 

04/06/22 

10:00 a.m. 

Site Host EV Charging 

04/28/22 

10:00 a.m. 


Utility Charging Incentive Follow Up

We have been following up with the utilities on some of the outstanding questions. These are some specific items that came up at the meeting where the information was not available or incomplete. These are a few items for which we have answers.

Plug-in Hybrids

Plug-in Hybrids are eligible! At the meeting we were told that is not the case. That correction has been provided to us.

Third Party Power Supplier

It does not matter who your power generation supplier is.

Number of Incentives Per Household

Our club has a lot of multi-EV households. Each household can sign up for a maximum of 2 incentives. At the meeting, it was said that Eversource had a limit of one, but we confirmed with Eversource that 2 incentives are permitted, the same as with UI.

Make-Ready

Make-Ready is a commercial incentive that is sometimes described as bringing power to the pad or the base upon which the charging unit will be installed. The incentive includes the cost of wiring up the charging unit.

Telematics

Telematics is where the utility communicates directly with the vehicle. It is a way for people who already own a charger, which is not an eligible smart charger to participate, IF you have a vehicle that has telematics capability. Many, though not all Teslas, have telematics. There are non-Tesla EVs that also have telematics. This page includes telematics-eligible vehicles for Eversource. There could be a slightly different list for UI as the companies use different external vendors to manage this aspect of the program.

We have received feedback that it is difficult to sign up for telematics. The registration funnel on the website is confusing. We have sent detailed feedback on this subject to the utilities and await their response.

Taxes

If you are requesting incentives with a value of more than $600, you will be required to upload a completed IRS form W-9.

We have a March 4 call scheduled with them. We don’t know if we’ll hear anything sooner. If you have anything you’d like for us to ask, or if you have gone through the application process and have comments, please mention it as a comment to the post or email the club at EVClubCT@gmail.com.