Reporting Resumes After A Hiatus

This blog follows the state EV purchase incentive program, CHEAPR. It’s an important part of the state’s effort to support EV adoption. The surveys from rebate recipients indicate it is an important factor in deciding to drive electric, and we have no reason to doubt those findings. However, the program’s performance has been disappointing for close to two years now.

Early this year, the CHEAPR board approved major changes to the program. The amount of the incentives were raised on a temporary basis (through the remainder of 2021, funds permitting). Incentives for income-limited individuals were added in the form of a supplemental incentive for new vehicles as well as an incentive for used EVs. There was also a welcome “backdoor” move to permit consumers to use the incentive 2 more times. I say “backdoor” because it was never discussed at a board meeting and was not included in any of the proposals that the board voted on. It just happened.

The program changes took effect on June 7th. We now have reporting through August 31st. The reporting does not yet provide for the new Rebate+ incentives. However, it was revealed at the board meeting that over the 12 weeks since the start of the new program, there was only 1 income-limited rebate awarded. This was an “Rebate+ New” rebate, the supplemental rebate for a new EV. The most convincing reason offered for this was that the public assistance programs that qualify an individual’s eligibility apply to people who simply don’t have enough income. It was suggested that the program should be recalibrate, possibly with an income-based qualifier. The convenience (easier to document) of the public assistance formulation may just not hit the right target.

The other proposed explanation is that the initial birthing pains plus insufficient outreach and a lack of collaterals has brought us to this place. DEEP resisted making any changes until the end of the year review. 1 rebate in 12 weeks sounds like a convincing data point to us.

Another “backdoor” issue, in that as with the extra opportunities to use the rebate, it was never discussed but just appeared, is the restriction on vehicle models for used rebates. If there is already the public assistance qualifier in place, we don’t see the point of further restrictions. The eligible models for the regular CHEAPR have pretty much been ported over to the used program with the additional restriction that no vehicle manufactured before the inception of CHEAPR can qualify. A very low income population is likely going to buy an older car with high mileage.

Over the past three months, the rebate levels have not quite recovered to where they were two years ago (429 vs. 467). Rebate numbers declined dramatically last year in the teeth of the pandemic. (The number from 2 years ago is with the previous higher MSRP cap in place.)

70% of the rebates over the past 3 months have been for PHEVs. To see the program turn so heavily into a PHEV rebate program is distressing but not surprising. Many of the popular BEVs, especially those with larger battery packs, are more than the $42K limit. The reason for this trend is very obvious: The Toyota RAV4 Prime. It accounted for 58 of 130 rebates and seems to be cannibalizing the Prius Prime to some degree. We will watch it over the next few months.  The new Jeep Wrangler PHEV is above the $42K cap. The Chevy Bolt, which had been doing better since it was refreshed this year, had a big drop, expected given the travails of the fires and the extensive recall.

The board meetings are now scheduled on a quarterly basis, so new developments are not likely forthcoming for some time. The public audience was unusually vocal this meeting. In particular, there were many requests for the MSRP cap to be raised at least back to where it used to be ($50K). We will update with more complete reporting when available.

2 Rebates per Licensed Driver

That is the double-duty reference. A major, and welcome, change is that drivers can get the rebate twice, as opposed to the previous limit of once. There has to be a minimum of 24 months separation between the rebates. Also, June 7th starts with a clean slate. For anyone who has previously gotten a CHEAPR rebate, the count resets and you can get 2 more.

Data Appear to be in a Transitional Phase

As CHEAPR transitions to the new program (all that has preceded until now has been the “pilot) with new incentives and new rules, effective June 7th, the monthly publication of the data set looks a little stunted. We are assuming this is due to reporting changes that will need to be implemented to accurately track the new program.

For June, there were only 31 reported rebates and none after June 15th. Also, the rebates occurring after June 7th were not at the new rebate levels. We do not know if that is an artifact of moving away from the old system. I have a feeling there will be numerous corrections next month. May numbers were restated to 131 rebates.

17 of the 31 rebates were for the Tesla Model 3. The next highest model was the Toyota Prius Prime with 4.

Rebate+

There were no Rebate+ incentives awarded. This could be due to the aforementioned questions about the data or it (likely) is that the program is still working out the kinks and just beginning outreach.

I have seen some chatter on social media questioning why the incentive for a used EV is higher than for a new car. The answer lies in the population that is being targeted. Lower-income folks need more help and this was the recommendation of the consultant. CHEAPR itself does not get into the income verification business. That is something that is invasive and the program seeks to avoid that. So a proxy is used, which is receiving benefits from one of the designated public assistance programs. It remains to be seen whether this sets the bar in the right place. For very low-income people, buying even a used EV may still be a stretch. And due to the process of the buyer submitting the information and waiting for approval, they have to float the cash until they get reimbursed.

EV Purchase Incentives, EVSE (charging equipment) Subsidies, Free Charging

This past Tuesday, July 27th, the EV Club presented a webinar jointly sponsored with Sustainne, LLC, Sustainable Westport, and the Town of Westport on how to save money when buying and charging an EV.

The speakers were Analiese Paik, CEO of Sustainne, Paul Vosper, CEO of JuiceBar, and Barry Kresch, President of the EV Club. These were the areas we covered:

• Latest changes to CT CHEAPR program of EV purchase incentives
• Update: There is a recent change to the CHEAPR program not reflected in the webinar. EV buyers can now receive 2 rebates beginning with June 2021, meaning if you had previously received a rebate, you can receive 2 more. They must be spaced at least 24 months apart.
• Federal purchase incentive
• Newly release EV Rate Design from the Public Utilities Regulatory Authority (PURA) that directs the utilities to offer a range of subsidies for residential, Multiple Dwelling Units, commercial, fleets, and municipalities. These include subsidies for the purchase and installation of level 2 or level 3 chargers and discounts on electric rates.
• Many automakers offer some level of free charging with the purchase or lease of a new EV. They vary a lot and are either miles or time-limited. There are also numerous options for free level 2 public charging.

A written summary of the PURA program is here.

Link to the blog post with the latest CHEAPR rebates is here.

We have been receiving positive feedback. The webinar was recorded and is now available on our YouTube channel.

Post by Analiese Paik and Barry Kresch

EVs Are Essential to Mitigating the Climate Crisis

We’re in a climate crisis and each of us should be taking action, regardless of state and federal policy. Driving electric has become a no brainer now that new models are out with longer-range batteries in styles and sizes that fit varying consumer needs. The Rivian R1T pictured above is a luxury adventure pickup with an optional camp kitchen with an induction cooktop that tucks away in a gear tunnel.

If Congress passes the Clean Energy for America bill, or folds it into other legislation, EV buyers could enjoy up to $12,500 in tax incentives/rebates on qualified vehicles until fully 50% of the cars on the road are electric. Currently the full $7,500 tax credit is still available to all-electric car (BEV) buyers as long as they aren’t buying a GM or Tesla vehicle (they met their 200,000 vehicle quota). Connecticut also provides a cash rebate for certain EVs, both new and used, but the parameters are always changing (read more here).

Create Zero Tailpipe Emissions

A battery electric vehicle is a zero-emissions vehicle. If we are to mitigate climate change, it is imperative to electrify transportation which currently accounts for 38% of statewide greenhouse gas emissions in the form of carbon dioxide and methane. The state has set a goal for itself of 500,000 registered EVs by 2030. We are less than 3% of the way there. Zooming out, the bigger transportation picture includes mass transit, active transport, and medium/heavy duty vehicles.  Every year, we see rising temperatures, as evidenced by heat waves, more severe hurricanes, drought, and wildfires. This is climate change made manifest. We can’t afford to be complacent. The time for rapidly transitioning to a zero emissions transportation system is now.

Improve Public Health

CO2 and, methane aren’t the only pollutantants emitted from vehicle exhaust. There is particulate matter (pm) and oxides of nitrogen (NOx) to name two. NOx + volatile organic compounds + sunlight = ozone, the main ingredient in smog. The American Lung Association gives every county in Connecticut a grade of F for ground-level ozone. Smog and particulate matter are major contributors to cardio-pulmonary disease and cancer, and is a risk for pregnant women. Imagine the positive health impacts on communities near major transit lines no longer subjected to the nois a risk for pregnante, NOx and pm from road traffic. Has anyone quantified the positive impact on real estate values as roadway noise, pollution and climate damage goes away?

Save Money

While an electric vehicle can be more expensive to acquire, the cost of owning one is significantly less than an internal combustion engine (ICE) car according to Consumer Reports. Not only is it less expensive to power a vehicle on electricity, but EVs also need much less maintenance. The bottom line is that it’s half as expensive to drive an electric than an internal combustion engine (ICE) vehicle because of the fuel and maintenance savings. And the time you save could make it even cheaper. So can free charging.

While there is variation among EVs in terms of efficiency and electricity rates, a reasonable benchmark is a cost of 5 cents per mile to operate an EV. By contrast, if an ICE vehicle gets 20 MPG and gasoline costs $3 per gallon, the operating cost is 15 cents per mile. And there are federal, state purchase incentives that can reduce or eliminate the differential in the EV acquisition cost. There are also forthcoming utility incentives that will lower the cost of charging.

Aside from the fuel costs, there are lower maintenance costs.  With approximately 90% fewer moving parts in an electric vehicle relative to an ICE vehicle, there is simply less to maintain and fewer things to break. An EV has no spark plugs, catalytic converter, alternator, transmission, timing belt, water pump, and doesn’t need oil changes to name a few examples. A recent analysis conducted by EV Club of CT President Barry Kresch shows tens of thousands of dollars savings accruing to the Town of Westport after the PD opted for a fully-outfilled Tesla Model 3 squad car rather than a Ford Explorer (gas powered ICE).

Drive More Efficiently

Regenerative braking, where the engine slows the car and recaptures some of the kinetic energy to store in the battery, means there is less wear on the friction brakes and the energy isn’t wasted and converted to heat lost in the atmosphere. It is not uncommon to go 70,000 or more miles before brakes need to be serviced on an EV.

Enjoy Reliability

Fewer things to break means fewer trips to the repair shop, less downtime, less inconvenience and more peace of mind. No oil changes saves a quarterly visit to the service department and avoids the time and hassle. A great strategy for someone with a daily commute of 60 miles or less would be to purchase a used EV that still has good battery life, charge it at home and use it as the daily driver. The state of CT’s CHEAPR program now offers cash rebates to qualified buyers of used EVs. If you find DEEP’s website confusing, join us on July 27, 2021 where we’ll explain it in consumer-friendly English during our free webinar, How to Save Money on an EV.

Have More Fun Driving

EVs have instantaneous torque. Hit the accelerator and the electric motors immediately respond. This is why performance EVs can outgun the high-performance ICE vehicles. On Connecticut roadways, especially congested highway and parkway entrance and exit ramps, the instant speed means you can maneuver that much more quickly and safely. EVs come with advanced safety and drive assist features that make your drive on our busy roadways safer. Bumper to bumper traffic? Turn on autopilot, keep your hands on the wheel and eyes on the road, but give your outstretched legs a break and let the car do the start and stops for you. Your daily commute just more relaxed.

Save Time

You’ll never have to go to a gas station again for fuel. That means no time taken out of your schedule to gas up or wait for an oil change or more complicated maintenance or repair. Most EV owners charge their vehicles at home at night and love the convenience. When you get up to go to work, you have a full “tank.” When you’re away from home, some EV chargers even let you charge at no cost. Your town likely has at least one free charger. Look for them near libraries and town halls; schools can be tricky, especially when in session. Join us on July 27 to learn more free charging hacks.

Promote Energy Security

EVs go hand in hand with decarbonizing the grid and rapidly advancing the shift to all-electric homes and a distributed energy network.  NREL (National Renewable Energy Laboratory) is developing and evaluating fully integrated systems that connect electric vehicles (EVs), transportation infrastructure, power grids, buildings, and renewable energy sources.

We can produce the electricity we need from domestic renewables like solar and wind. If you have solar panels on your home, even better (consider adding battery storage for resiliency). The CT grid is moderately clean at present, mainly because the state gets 38% of its electricity from nuclear and almost none from coal; the great preponderance is from natural gas (sigh). There is a mandate for 30.5% of electricity in 2021 to come from renewables, though the state is falling short of that. However, in recent years, the legislature has authorized offshore wind and stationary storage projects, and there has been approval of some community solar. Even if you do not have solar on your roof, you can choose a supplier that generates its energy from renewables at EnergizeCT.

Support Domestic Green Jobs

Green jobs are new economy jobs that are critical to rapidly transitioning the US and world to a sustainable future while growing and creating well-paying, in-demand, skilled jobs (many unionized) in STEM, EV manufacture, EV charging infrastructure, energy storage, solar systems, wind turbines, and all manner of R&D, manufacture, service, maintenance and repair. Ohio’s Mahoning Valley is home to a “fledgling electric vehicle manufacturing cluster” that is supported by the government, industry, unions, schools and universties working in concert with one another to ensure workforce training matches job creation. Read about this exciting workforce development plan and and growing EV industry in Ohio here. Now imagine if we had that in Connecticut.

The EV Club of CT meets online monthly and all drivers are welcome, as are EV-interested. Please comment below or send us your inquiries.

Toyota Dominates May Rebates

The two plug-in hybrid offerings from Toyota dominated the rebate activity for May. The Prius Prime (44 rebates) and the RAV4 Prime (30 rebates) together accounted for 61% of the 123 May rebates. (The April count was slightly restated to 125.) The only other vehicles in double figures were the Chevrolet Bolt (12) and Hyundai Kona (10). May marked the first appearance of a VW ID.4 with one rebate. Driven by Toyota, the balance of the rebates tilted heavily toward PHEVs, 85 vs. 38 BEVs.

The program spend continues to pace well under the available funds. The new incentives will help somewhat, but we doubt by enough.

There has been some press about the program this week as the Governor’s office issued a release about the new program, which was picked up by a number of newspapers. Readers of this blog will know that the CHEAPR board approved these modifications in February, but implementation only recently happened on June 7th.

The big headline numbers that are featured, such as up to $7500 in rebates, or on the CHEAPR home page, up to $9500, only apply to Fuel Cell vehicles, which are not currently for sale in the state. But the higher rebates and income-limited incentives are now live and we will see the early reporting in one month.

All rebates by model in the table below:

All You Need to Know About EV Incentives and Free Charging Opportunities

Virtual webinar: July 27th at 7 PM. Free registration is required:

https://us02web.zoom.us/webinar/register/WN_3fImyGBzT4yzOzrxe-x5Lg

The EV Club will be jointly producing and sponsoring a virtual webinar about the latest in incentives and free charging. Specifically, these are federal and state purchase incentives, incentives that reduce the cost of the electricity used to charge your electric vehicle, incentives to defray the cost of buying EV charging equipment, and free charging opportunities.

The incentives around EVs and charging are fluid.

The state recently implemented a number of changes to its CHEAPR EV purchase incentive program.

There is an expectation that either included or alongside the Biden Administration infrastructure plan, there will be an updated federal purchase incentive. The bill that was reported out of the Senate Finance Committee looks very good, but it could change considerably as it makes its way through the legislature. There is also a federal tax credit for the purchase of an EV charging station that is due to expire at the end of this year. We are waiting to see if that resurfaces. The President and the leaders of the two chambers have talked about getting this done before the August recess. It may be cutting it close, but we are hopeful that the contours of the new plans will be known by the end of July.

The Public Utilities Regulatory Authority is in the process of adjudicating a new EV rate design that would include lower rates to charge an EV as well as subsidies for charging hardware. A preliminary document was issued on June 17th. The final document is due July 14th. This is a complex piece of regulation, but we will provide the key highlights for the webinar.

New Rules Take Effect on June 7th

Revisions to the CHEAPR EV purchase incentive program approved in February are going into effect on June 7th. This was announced at the CHEAPR board meeting on June 4th. We don’t really know if there has been much advance outreach to the dealers or not. The announcement felt abrupt so it could be that there will be a bumpy transition for a period of time. The details of the program are described in this earlier blog post written when the changes were announced.

In the meantime, the April update was released on June 5th. The March rebates were restated upward to 170 with April at 119. The Toyota Prius Prime continued as the vehicle with the most rebates at 31, followed by the Toyota RAV4 Prime (20), Chevy Bolt (19), and Tesla Model 3 (18). All other models were in single digits.

The program continues to pace below budget.

The numbers have picked up somewhat recently as the economy recovers. The slide below was shown by DEEP and indicates an upward sloping EV sales trend in CT this year through the first quarter.

Even with the March spike, the pacing is still below the baseline budget for that month. It remains to be seen if the upturn in the economy and the new rebates will raise the spend level to match the available funds. We may not really know the program’s true run rate for several months. The new LMI incentives are going to require outreach and education, and the process is more complicated. It is likely there won’t be much traction for a while.

Rebates Spike in March, but Program Still Underspent

Rebates awarded under the state EV purchase-incentive program spiked to 151 in March, double that of the (slightly restated) number of 75 for February. This was part of the standard monthly update by DEEP.

There were increases across the board, which could be reflective of the economic recovery, but certainly, something to watch.

The most rebates again went to the Toyota Prius Prime with 33, up from 22 in February. This was followed by the Tesla Model 3 with 31, up from 2. The Model 3, as we’ve seen before, is volatile since only the base trim level is eligible. The only other vehicle to hit at least 20 was the Chevy Bolt at exactly that number. Most of them were the 2020 Bolts which GM has been heavily discounting.

The other vehicles in double digits were the Toyota RAV4 Prime (18), Hyundai Kona (15), Nissan Leaf Plus (11), Tesla Model Y (10). The Leaf Plus is the longer-range Leaf. The appearance of the Model Y is ephemeral as the standard range option is no longer being made available by Tesla. That may change, but we have no information on whether that will definitively happen or what the timing may be.

There is still no word on the implementation of the new CHEAPR program with higher rebate levels and new, income-limited incentives. We have been advised that the board has not been able to sync schedules for a meeting to review the new material, nor do we know if the consultant has finished with the software development. We asked DEEP if they could give us a rough estimate, but have not received a response.

Spend Level Remains Low

It has been our expectation that the program would underspend again in 2021 and that was when we expected the new program might be live by early April. After 1 quarter, the spend is $310,500 against a statutory pace budget of $750,000, and an actual pace budget (including the rollover of unspent 2020 funds) of $1,300,000.

Some Stellar Performers; Many Also-Rans

We obtained an updated dataset of CHEAPR rebates by individual dealerships from the program’s inception through the end of 2020. It is all pasted below, but a couple of observations first.

There are a small number of dealers that really do great work. Unfortunately, they are not representative. If great work is defined as 100 or more rebates over this duration, these are the 6 companies that have achieved that level.

• A-1 Toyota – 167
• Richard Chevrolet – 126
• Honda of Westport – 126
• Karl Chevrolet – 122
• Lynch Toyota – 117
• Ingersoll Auto of Danbury – 101

This project originally began due to member complaints about poor dealership experiences, followed by a request: Please make a recommendation. I had anecdotal reports of dealerships that do a good job, but nothing systematic or statewide. This approach uses CHEAPR data as a proxy for EV-friendliness.

There are a few considerations to bear in mind. Not all dealers sell CHEAPR-eligible cars. The parameters of the CHEAPR program have changed over the course of the program’s life. In particular, the lowering of the MSRP cap in October 2019 causes the exclusion of some vehicles, for example, from BMW and Volvo, that were formerly eligible. The offerings of manufacturers have changed over time. The cancellation of the Chevy Volt caused a slowdown in the number of Chevrolet rebates. Hyundai has become more aggressive recently about introducing EVs. The Honda Clarity got off to a good start when it was introduced, but Honda then stopped sending it to the state (which may be changing). The new Toyota RAV4 Prime is showing some early promise.

It is for that reason that I have displayed the rebates sorted highest to lowest within make. That way, for example, it can be seen that Danbury Hyundai has a strong record with a make that was barely selling EVs before 2019.

The file that was provided did not have the specific vehicle model for which a given rebate applied. There are some dealerships that sell multiple makes that have CHEAPR-eligible vehicles. I made a judgment and assigned the dealer to the brand with the most rebates. Note to self – work on getting that next time around. Also, in a couple of cases, there may be more than one line for a dealership because the file did not have a consistent naming convention. I cleaned it but may have missed a couple.

This is all of it (except Tesla). If a dealership had zero rebates, it will not appear in the tables below.

It would be best, of course, if DEEP were to publish this information as part of its regular CHEAPR reporting. It is done in other states and would remove the burden for both of us of going through the Freedom of Information Act process.

Finally, this has relevance for the EV Freedom Bill. One of the arguments for the bill is that the conventional dealership model is antithetical to selling EVs, that EVs come into tension with the legacy ICE business. There is more nuance to it than that, but the data largely illustrate this point. It seems like it is a lot harder for a dealership to embrace EVs or more of them would have effectively done so and there wouldn’t be such large differences between the top performers and the laggards.

For those dealerships that are making an effort to sell EVs, if SB 127 passes, they’ll be fine. For the others, it will be a shot across the bow to wake up or risk being left behind.

Fleeting Model Y Rebate

February rebate data show 72 rebates awarded, totaling $59,000. January was restated and increased from 68 to 77 rebates with a total spend of $82,500.

The leading vehicle in terms of Feb. rebates was the Toyota Prius Prime, which accounted for 22 of the rebates, and was followed by the newer Toyota PHEV, the RAV4 Prime, with 11. The RAV4 has been showing early signs of life. We don’t know if the vehicle is supply constrained in CT as it is still being rolled out. These were the only two vehicles in double figures. With these two PHEVs dominating the rebates, the spend level was considerably lower than January.

The Model 3 accounted for only 2 rebates. As we have seen, the number of Model 3 rebates fluctuates wildly because only the base level is eligible for the incentive. The CHEAPR rebates don’t track with overall sales of the vehicle. There were 4 Model Y rebates which is unlikely to continue. Tesla first reduced the price of the basic Model Y, which is why some of them qualified for incentives, but it subsequently pulled the vehicle off its online configurator.

This was a tweet from Elon Musk that was published in Car and Driver. It was the sub-250 mile range that did not meet its standard of excellence. Off menu means it can still be ordered, but only by phone or in person in a showroom. It would not be surprising to see Tesla make some tweaks to the vehicle and then return it to the entrées. (UPDATE – We have heard that Tesla is not taking any new orders, not even off the menu, for the MY SR. If we are able to find out more details, we will update again.)

The CHEAPR board adopted a new incentive structure in February. The expectation was that it would become live on or about April 1. Some time was needed for the software implementation. As of this writing on 3/27, there is nary a word on the CHEAPR website, nor a peep from DEEP. Communication is not DEEP’s forte. No board meetings have been held since the new incentives were adopted and none have been announced. We are trying to find out if significant delays have been encountered.

These are the rebates by model for February: