Spike in Model 3 Rebates leads to Slightly Stronger Rebate Activity in September

The September data were published on Friday, Oct. 30th, and show 84 rebates awarded with a $104,000 spend. Also, August was restated with rebates increasing from 40 to 44. A restatement of the prior month is common with these data releases.

The base-level trim of the Model 3 can still qualify for a rebate, even under the lowered $42,000 MSRP cap, and when those numbers are up, it raises the overall level. There were 37 Model 3 rebates, followed by 15 from the Chevy Bolt, possibly driven by some significant discounting. The spend level was $104,000, still pacing well under the allocated budget.

Rebate awards total $402,000 for all of 2020 through September against an annual budget of $3,000,000 (less admin and dealer incentives).

Pending Vote

CHEAPR changed the size of the rebates and the MSRP eligibility cap in 2019, which led to a large drop in the number of rebates awarded and the dollar amount spent. This was done at the time out of concern for the possibility of funds running dry late last year. Ever since then, there has been an announcement on the CHEAPR home page that revised rules will be coming in 2020. New rules were finally proposed in July. There was much disagreement about the proposal. Subsequent meetings in August, September, and October failed to resolve differences. No proposal has yet to be brought up for a vote. No meeting date is posted as of Nov 1. The CT EV Coalition does not like the incentive structure as originally proposed.

DEEP has asked their consultant, the CSE to go back and model additional scenarios. There are a number of variables in play, including an income-limited used EV incentive, an income-limited supplemental incentive, temporary stimulus incentive during this period of a weak economy, size of the rebate, and MSRP budget cap. We have blogged about a number of these issues before – here and here most recently.

The biggest sticking point, in my opinion, is the MSRP cap. At $42K, it is lower than neighboring states – NJ ($55K), MA ($50K), NY ($60K). More to the point, there just aren’t many BEVs that qualify. Below is the count of rebates by BEV model for 2020 to date.

There are only 7 models receiving rebates and just 4 that received more than single digits. If we exclude the Model 3 as our estimates are that ~75-80% of them are not eligible, and the eGolf, which is being discontinued, that leaves only 5 that are eligible, 3 with more than single digits. The eGolf is being replaced with the ID4, which will be ineligible. A loaded Bolt or Leaf Plus will exceed the threshold. The new Ford Mach-E begins at $43K. And, of course, the base trim level of the Tesla Model Y is over $42K. We feel CHEAPR needs to support the new generation of EVs, which include popular SUV or crossover form factors. Let consumer choice dictate where the rebates go and not put a thumb on the scale.

Few CHEAPR Rebates Given in August

Another tepid, desultory, underwhelming (I’m running out of adjectives – feel free to help in the comments) month for the CHEAPR program with only 40 rebates given out and a total dollar amount of $28,000. This is the second-lowest month of the year and continues the dispiriting (another adjective!) trend we have seen since November 2019. One interesting item: there were 9 rebates for the new Toyota RAV4 Prime plug-in hybrid. Between the RAV4 Prime and the Prius Prime, Toyota vehicles dominated the rebate activity. The reporting has been that the plug-in RAV4 Prime is a severely supply-constrained vehicle at present and there was some doubt that any would make it out of California, but apparently, they have.

Note: CHEAPR often restates the prior month when issuing new data. In this case, July has increased from 57 to 62 rebates and it is incorporated into the title graph.

Decision Time

The next CHEAPR meeting is scheduled for October 9 at 11:00 AM.

The Center for Sustainable Energy (CSE) presented a set of proposals for program revisions in July. The agenda includes a vote on the new program. The meeting is scheduled for only one hour, so we don’t expect much discussion. We do not know if this will be an up or down vote on the package or if the items will be considered individually. We know that despite 3 meetings and public comments, there isn’t a consensus on all the items.

This is what we know to the best of our information.

The package that will likely be presented to the board in October will have no differences relative to what was proposed in July.

• No e-bike incentive or even a pilot test. Ix-nay on this from the DEEP attorneys.
• A used-EV income-limited (lower/middle income, or LMI) incentive (non-controversial).
• A supplemental LMI EV incentive (non-controversial).
• No changes to base incentive levels or to the MSRP cap.
• No changes to the much higher fuel-cell vehicle incentive, which stands at $5000 with an MSRP cap of $60,000.

UPDATES as of 10/25/20

Modeling scenarios include:

• Maintaining the current (since 10/19) MSRP cap of $42K or raising it to $50K.
• Base BEV incentives of $2500 or $1500.
• A possible temporary “stimulus” additional sample of $1750 for BEVs and FCEVs, and $500 for PHEVs.
• $500 increase to $2500 for the LMI incentive.
• Possible inclusion of scenarios with base-level incentives less than $1500.

Incentive Levels and MSRP Cap

Much commentary, from board members, public attendees, and public comments, was in favor of raising the base incentives and the MSRP cap to at least where they were before DEEP lowered them in October 2019. These currently stand well below comparable incentive programs in nearby states. The CSE was tasked with modeling scenarios and they forecasted that there was a possibility that demand would exceed available funds, thus risking disruption. This blog doesn’t buy that line of argument for several reasons.

• A pandemic and recession of unknown duration make for a difficult environment in which to model. There is a lot of guesswork here, exacerbated by the fact that there are no empirical data on the take-rates for the new LMI incentives. A disruption would likely only occur if the economy roars back and the participation rates are at the high end of estimates.
• The dealership contingent spoke out for a higher MSRP cap. They argued that leases have grown in popularity to about half of all new car sales, and people can manage a lease payment on a vehicle they can’t afford to buy. Also, we are soon to see a wave of crossover and SUV EV launches, and these popular form factors are more expensive than sedans.
• Based on our analysis, and comments from the dealers, there isn’t much of a used EV market at this time. The incentive will help, but it will take some time for auction bids to be influenced such that inventory can build. Also, used Teslas are probably too expensive for an LMI limited buyer (and we don’t know how the rules will work for them – they may not qualify – something we will seek to find out).
• At the July meeting, when CSE proposed this incentive regime, they advised that the LMI system development would cause it not to be available until Q1 2021. We don’t know if they have been able to work on it during this period when the program isn’t finalized, but there could potentially be a delay.
• There is more money available – DEEP has indicated that the unspent funds from 2020 (they have only given out $398,000 in consumer rebates), as well as unspent bridge financing from 2019, will be rolled over into 2021. This will yield approximately $4.9 million in available funds (compared to the $3 million budget).
• The CHEAPR mission seems to be increasingly skewed towards the equity part of the mission. This blog supports the LMI incentives (and e-bikes, for that matter), but also sees the mission as just getting more EVs on the road. The program has fallen seriously short of that in the past year.

For these reasons, we think the best course is to raise the incentives and collect data. There will be plenty of time to course-correct if necessary. CHEAPR has an important role to play in moving people to drive electric. This is attested to by consumers, dealers, and our data. Let’s allow it to fulfill its potential.

Closing Pet Peeve

The $5000 fuel-cell rebate has never been given out in the 5+ years of the program’s existence, and there is no sign it will be anytime soon. You can’t buy one of these vehicles at present, and there is only 1 public hydrogen refueling station in the state. And yet, DEEP continues to use this as its headline incentive. It is misleading. It can be seen in the first sentence of the first paragraph on the CHEAPR home page. It was spoken out loud by Tracy Babbidge during the Sustainable Fairfield Webinar on September 28th. It was said by Victoria Hackett when she spoke at the Tesla leasing kickoff in February. Those are the occasions we are aware of but this is clearly not inadvertent. They are not helping themselves.

Editors Note: The October 9th meeting did not yield a resolution. A letter from the EV Coalition was debated that proposed a different structure. No vote was taken.

Meeting Details

We encourage members of the public to listen in! This is the Zoom info:

Webinar Information:

Join Zoom Meeting

https://ctdeep.zoom.us/j/99938032925

Meeting ID: 999 3803 2925

One tap mobile

+16468769923,,99938032925# US (New York)

Meeting ID: 999 3803 2925

Find your local number: https://ctdeep.zoom.us/u/adlDH6PJuC

This will be the last CHEAPR post prior to the CHEAPR board meeting on Thursday, September 10.

Stats Update

The July stats have been published and rebate levels increased slightly over the desultory levels where they have been. There were 57 rebates in July, up from 46 in June. The numbers last year were 179 and 142 for June and July, respectively.

CHEAPR has spent $362,500 through July, plus another $40K or so on dealership incentives, out of an annual budget of $3 million.

9/10 Board Meeting

The published agenda does not include a vote. At least that’s what it says. Some key points:

• Despite DEEP’s not soliciting public comments on the MSRP cap and base rebate levels, many spoke up about them. The CSE was asked to scenario model and are expected to present their work. It is hard to think of a more difficult modeling environment than the present. The big question, of course, is that while the program has underperformed ever since the levels were changed in October 2019, there is an unknown with respect to the take rate for the supplemental LMI and used EV incentives that are likely to be adopted.
• DEEP’s position was that e-bikes cannot be statutorily defined as vehicles for the purposes of inclusion in CHEAPR. However, there is an agenda item about e-bike rebates.
• During the July meeting, there was a gap of roughly $800K between funds spent on rebates and available funding. A more detailed report on the CHEAPR budget is due. If any preliminary information has been released, we have not seen it.

An E-bike Pilot

Among the suggestions offered by members of the new CHEAPR board has been a pilot project for e-bike rebates.[1] This is most strongly advocated by those who are focused on lower-income households, which are often clustered in the state’s largest cities.

E-bikes are an emission-free mode of transportation and could provide another transportation modality option for people who can’t afford a car. Or it could be a cost-effective replacement for a second car.

E-bike Proposal Receives Divided Reception

An e-bike incentive has received a divided reception. If I were to characterize the opinions expressed during the public meetings and in the public comments submitted to DEEP, there seems to be support for an e-bike incentive, but with many opposed to its inclusion in CHEAPR.

The opposition to e-bikes being part of CHEAPR comes from two places. First, DEEP’s reading of the statutory language concludes that CHEAPR can only be used for vehicles and that e-bikes cannot be considered vehicles, or more specifically, ‘battery electric vehicles’ based on the language. That interpretation has been disputed,[2] but from DEEP’s perspective, this seems to be an end to the discussion.

The second reason is that a group that supports an e-bike purchase incentive feels that it should be done outside of CHEAPR with a separate pot of money to avoid being dilutive to getting EVs on the road.

The EV Club supports e-bike rebates. It would be preferable to have a new funding stream for them. Several people have pointed out that CHEAPR, which is funded by clean-air fees[3],  receives less than half of those fees, with the rest going to the general fund. We would like to see more of those funds diverted to supporting clean transportation, which could be where to source e-bike funding.

Proposal for E-bike Pilot

There is also the situation we are faced with this year. It is almost certain that CHEAPR will not spend its budget. The amount of money spent on rebates and dealership incentives in the first half of the year is only equal to about 22% of the $3 million budget on an annualized basis. No matter what changes are made to the program, it will be next to impossible to use these funds. The under-spending is due to the changes made to the program in October 2019 and exacerbated by the recession.

So, here’s our proposal. Create a carve-out and conduct an e-bike pilot in 2020 and into 2021. Allocate some reasonable budget, say in the range of $150,000 – $250,000, that would be a cap. We think this should be an LMI[4]-limited proposal, as the intent is not to subsidize e-bike purchase among affluent folks whose main interest is recreation. There would then be the opportunity to collect data. We could find out who is buying them, what they are being used for, and how effective the incentive is for motivating purchase and reducing emissions.

Rethinking the Cityscape

The broader context is that during our pandemic-induced lockdown, the clean-air benefits of having fewer cars on the road became palpable. That, coupled with fears about virus transmission while using mass transit, inspired many cities to think about what a more people-friendly, less polluted urban landscape/streetscape might look like. Cities and town centers have been closing streets to vehicular traffic and adding protected bike and pedestrian lanes. Parallel parking spaces have been converted to outdoor dining areas. Some of this is temporary and responsive because everything happened so fast. But it could be permanent, and we would all be better off for it.

The City of Hartford has a city-wide bicycle network plan approved, a Complete Streets ordinance, and a goal to reach 10% bicycle mode share by 2035 (in the Plan of Conservation and Development). Plans like this have not only environmental and lifestyle benefits, but they would reduce overall crash fatalities, especially for people walking and biking.

E-bike incentives are an idea worth exploring[5] and we have an opportunity to learn something about how such a program would work with funds that would otherwise remain unspent.

[1] Index of e-bike rebate support letters

[2] People for Bikes, 8/12/2020 – CT CHEAPR public comment and e-bicycle as vehicle legal analysis

[3] Total proceeds from the motor vehicle greenhouse gas reduction fee were estimated to be $8 million per year based on these two Office of Legislative Research reports, here and here.  Only $3 million per year from that fee revenue was dedicated to the CT CHEAPR EV incentives.

[4] Low to Moderate Income Household

[5] How E-Bike Incentive Programs are Used to Expand the Market, 2019

Whenever we have looked at CHEAPR, it has appeared to be a worthwhile program. (Our complaint is with how the parameters were changed in October 2019.)

Creating a Comparison of Registered Vehicles with CHEAPR Rebates

For this analysis, which is seen in the chart at the top of the post, I began with all of the vehicles that were new to the file (comparing the January 2020 and July 2020 files). I then filtered that to the definition we have been using for new (as opposed to pre-owned) vehicles, which is the model year of 2019 or later. From that sub-set, I further winnowed it down to vehicles eligible for a rebate by make. Finally, I lined up the CHEAPR rebate data for the corresponding time period (first half of 2020), also by make.

There is some estimating here and not only for identifying new vehicles. Mostly, I used make as my proxy. For example, all new Chevrolets deemed new are considered eligible. This would only apply to one model, the Bolt, and it is possible to get a fully loaded Bolt that would exceed the MSRP cap and thus be ineligible. The same is true for the Mitsibushi Outlander. In the case of Tesla, I excluded all of the Model S, X, and Y vehicles, and took 25% of the Model 3. It is pretty easy to get above $42,000 with Model 3 options (e.g. long-range, all-wheel drive), so I made the assumption that relatively few are eligible.

If one takes these leaps of faith with me, then it works out that 53% of eligible vehicles are associated with a CHEAPR rebate. Of course, the CHEAPR restriction of only one rebate means that only first-time EV buyers can qualify. So it seems like the indicia are still pretty strong with respect to CHEAPR “driving” EV sales. If the rebate and MSRP cap were higher, CHEAPR could drive more EV sales.

If the chart at the top of the post is too dense to easily read, below is a chart with only the eligible and CHEAPR data points, and only the eligible makes.

Data from the Center for Sustainable Energy Helps Us Identify EV-friendly Dealers

We regularly field inquiries from club members and others asking for dealer recommendations. Usually, it follows a negative interaction with a dealership, when they walked in mistakenly thinking their inquiry about purchasing an EV would be well received. Not so fast!

It has been well documented, in the NY Times, in 2 Sierra Club shopper studies, and other reporting, that many dealers are indifferent or even hostile to EVs. But there are some dealerships that make an effort to sell EVs. To help guide consumers interested in non-Tesla EVs, we obtained from the Center for Sustainable Energy (CSE), the consultant that manages the CHEAPR incentive program for the Department of Energy and Environmental Protection (DEEP), the number of rebates by dealership from the program’s inception in 2015 through August 11, 2020.

I am using rebates as a rough proxy for sales/EV-friendliness. It’s the best we can do. You won’t find retailers of expensive vehicles, for example, a Jag or an Audi, on this list because the cost of the vehicles exceeds the MSRP eligibility cap. Consumers are eligible for one rebate lifetime, so repeat customers are not included. Some dealers may end up on our list in spite of themselves. But we can still use this directionally. Tesla is not included since it doesn’t have dealers.

We are covering a 5+ year period and understand that EV models come and go. Some manufacturers got out of the gate quickly (Tesla, GM, Nissan), while others came later to the party. The Chevy Volt, once the most widely registered EV in the state, has been discontinued. A couple of years ago, Honda introduced a PHEV Clarity that generated a fair number of sales. Since then, it has greatly slowed, reportedly due to distribution having been curtailed. There have also been 5 changes made during this period made by DEEP to rebate size and the MSRP price cap that determines eligibility. Finally, some dealers have multiple stores that were not separated in this dataset.

One-Third of Dealerships have not Awarded a Single Rebate

There are 270 franchised auto dealerships, according to their trade association (Connecticut Automotive Retailers Association) in CT. 185 of them have made a sale or lease associated with one or more rebates. Less than half, specifically 104, have disbursed 10 or more rebates and only 28, or about 10%, have awarded 50 or more rebates. (The denominator is somewhat inflated due to some dealers that don’t retail eligible plug-ins.)

The Top EV Dealers

These are the 5 dealers that have awarded more than 100 rebates.

• A-1 Toyota (New Haven)
• Honda of Westport (Westport)
• Richard Chevrolet (Cheshire)
• Karl Chevrolet (New Canaan)
• Lynch Toyota (Manchester)

Below are other top dealers for different makes that had between 50 and 100 rebates. Some makes haven’t had any dealer exceed 50 rebates.

GM – Ingersoll Auto (Danbury), O’Neill’s Chevrolet/Buick (Avon), H&L Chevrolet (Darien), Maritime Chevrolet (Fairfield), Grossman Chevrolet/Nissan (Old Saybrook), Chevrolet of Milford (Milford), Partyka Chevrolet (Hamden).

Toyota – Hoffman Toyota (West Simsbury), New Country Toyota of Westport (Westport), Middletown Toyota (Middletown), Hartford Toyota Superstore (Hartford), Westbrook Toyota (Westbrook)

Ford – Steven’s Ford (Milford), Stamford Ford/Lincoln (Stamford), Crowley Ford/Lincoln (Plainville)

Nissan – Grossman Chevrolet Nissan (Old Saybrook), Harte Nissan (West Haven), Crowley Nissan (Bristol)

BMW – BMW of Ridgefield (Ridgefield), BMW of Bridgeport (Bridgeport)

Finally, 2 stores that handle numerous brands:

Valenti Auto Sales (multiple locations) – Audi, VW, Porsche, Maserati, Fiat, Volvo, Alpha Romeo, Jaguar. (We presume most of the rebates come from VW.)

MJ Sullivan Automotive Corner (New London) – Chevrolet, Buick, Cadillac, Hyundai, Genesis

It should be acknowledged that this is a changing landscape. We are relying on the past as prologue to predict EV-friendliness and we hope it proves useful. As the EV landscape evolves and new models are introduced, we will update the data to the extent that it is available. We anticipate it will be. Going forward, the CSE has advised they will be making more granular data available with their normal releases of CHEAPR data.

The used car market, in general, is more than double that for new vehicles. That does not appear to be the case for EVs to this point.

CHEAPR Likely to Implement Used EV Incentive in 2021

CHEAPR, the CT state EV purchase incentive program, is considering offering incentives for purchases of used EVs. This incentive would be limited to lower and middle-income individuals/families. There are a number of changes being considered by CHEAPR, but with respect to used EVs, the legislature specifically authorized this incentive, the proposal was well received by the board, and the public comments were favorable. It seems a lock to happen, though there are below the line development tasks that will cause it to not be available until next year.

What is the State of the Used EV Market

We don’t have access to the data that would enable us to definitively answer this. But we have some information that may be useful for drawing inferences.

During the CHEAPR board meeting of July 17th, there was a presentation by the auto-dealership representatives on the board. They stated that there are few used EVs in the marketplace and the prices were low, creating an unvirtuous circle. They support the incentive and think that that it promises to sufficiently stimulate consumer demand so that dealers will be willing to bid more aggressively at auctions to augment the supply in the state.

The used EV incentive will differ from the new car incentive in that it will also apply to independent used car dealers. Used car dealers do not have to be affiliated with a manufacturer. A Google search for “used EVs for sale in CT” brought up a results page consisting of only independent dealers, mainly large ones like Carvana, Iseecars, and CarGurus. Those companies had both paid and organic listings on this first page of the search results. A search for “used Teslas for sale” brought up a largely similar set of sites, except that Tesla itself appeared, as it is in the business of retailing its own used vehicles. There is another company specializing in used Teslas called OnlyUsedTesla.com.

I suspect that the board members who represent the dealerships are not factoring Tesla into their thinking. For them, EVs are still a niche product and many of the non-Tesla EVs in the used marketplace are the first generation (read: low range) models. (We may be at a point where this is beginning to change as later model EVs are now coming off-lease.) And the dealers, based on the search results and their own words, aren’t making a serious effort to source and sell them. The fact that the independents are spending money on sponsored links indicates that there is at least a minimally viable business. Search is highly targeted and can yield a positive return on a small campaign.

Quantify Used EVs from the DMV File

To get some kind of quantification of used EVs relative to new, I went back to the file we recently got from the DMV of all registered EVs in the state as of July 1, just to get an idea of what was entering the market. My proxy for used EVs was vehicles added to the file between January and July with a model year earlier than 2019. This is a rough measure and is reflected in the chart at the top of the post. Each bar represents vehicles added to the file in the first half of the year sorted by make, with the orange portion being those that are categorized as used by our proxy measure. 22% of the EVs added to the file could be characterized as used based on this definition. 47% of the vehicles added are Tesla, but only 10% of those fit this definition of used.

• This, coupled with the information from the dealers, indicates a small used EV market at this point.
• Even though it is small, there is a used EV business.
• The fact that there is no franchise requirement begs the question of whether Tesla could sell used EVs in Milford (or elsewhere in the state) using the same rationale that led to their being able to lease. In the case of new vehicle leasing, customers still have to go out of state to pick up the vehicle. Would that be a requirement if they could sell used?
• The EV Club is supportive of a used CHEAPR EV incentive, but based on this information, along with the LMI restriction, we don’t expect that it will be disbursing large sums in 2021.
• It is important, as used and possibly other incentives, are incorporated into CHEAPR, that the stats page be updated to track them separately.

The CSE, DEEP’s consultant for CHEAPR, has been sent back to model new scenarios and we will see what they forecast.

37 CHEAPR rebates in June

This tepid number was only slightly higher than the 27 in May, closing the quarter with a soft 81 rebates total and 275 for the first half of the year. This 275 compares to 818 during the first half of 2019.

Partly, this was due to the recession, but a lot of it has to do with the changes made to the program in October 2019, when the price cap for vehicle eligibility was lowered from $50K to $42K. You can see in the graph that the numbers immediately tanked in November and have stayed low.

CSE Proposal for CHEAPR Program Revisions

The CHEAPR board met on July 17th to entertain proposed program changes submitted by their consultant, the Center for Sustainable Energy (CSE). These proposed changes were a decidedly mixed bag. DEEP is accepting public comments until August 12th. Email comments to the at deep.mobilesources@ct.gov

These are our positions:

Dealership Data Request

The club regularly gets requests for dealer recommendations. Usually, this follows a poor dealership experience. We have an informal list of some dealers that have been recommended by members, but it is not complete and doesn’t cover the whole state.

So we would like to let the data do the talking to the extent it can. Our objective is to publish a list of top dealers for each brand and we hope to have representation across the state.

We made the request to CHEAPR, which is run by the Center for Sustainable Energy (CSE), on June 23. On July 7, they advised that they were working on it. We are still waiting as of this writing on July 26th. Hopefully, we will receive it soon.

We will be using rebates is a proxy for sales and it is imperfect. When we publish the data, we will describe in detail what it represents and its limitations. We have asked for granular data. We will cut and sort the data to make it as clean as possible, perhaps by brand by county.

There was a recommendation in the DEEP EV Roadmap to create a dealer recognition program. We support this as long as it isn’t vaporware. If it proves to be truly robust and stays up to date, then we may back off of the data.

We hope to be able to post the actual data soon. This doesn’t seem like a difficult request.

The CHEAPR board virtually convened for their first meeting since late January to consider what the program should look like going forward.

To briefly recap recent history, changes were made to the rebate parameters on Oct. 15, 2019, which lowered the MSRP cap and the rebate amounts. The number of rebates immediately dropped precipitously. As CHEAPR morphed into its new administrative structure as of January 2020, these rebate levels were held over on an interim basis, which continues to this day. The board received a proposal for a revised rebate structure from the Center for Sustainable Energy (CSE), as well as a proposal for a used EV rebate, along with requests for an e-bike rebate. These are described below, but no final decision was taken. DEEP is setting up a mechanism to receive public comments for a 3-week period. The board will meet again in 4 weeks for the next steps, which presumably could mean a vote.

New EV purchase rebate proposal:

As you can see, the proposal leaves the lower rebate for new vehicles in place and adds a supplemental LMI (lower-middle income) incentive. We do not endorse leaving the existing rebates and MSRP cap at these low levels that were established in October. There were a number of attendees from the public who also spoke in support of this position.

For the 4 months prior to the October change, there were 616 rebates awarded. The corresponding post-change period, November through February, saw 272 rebates. And this was before COVID. As a result of the changes, plus the recession, CHEAPR is 81% underspent through May (the latest available data at the time of this writing).

This is the proposal for used EVs:

The supplemental LMI and used EV LMI proposed rebates are generous, and we accept the analysis that this is what is needed to make the program work. The definition of LMI is an AGI of $50,000 for a single person and $75,000 for a family. There is a proposed mechanism to verify this through federal income tax returns.

For either LMI incentive, the consumer, upon income verification, would be given a voucher that they would then bring to the dealer. This would apply to both franchised dealerships and independent pre-owned car dealers. (The rebate for FCEVs in this context is ludicrous, but more on that later.) The two dealer representatives (Jim Fleming of the CT Automotive Retailers Association – CARA, and Brad Hoffman of Hoffman Automotive Group – both organizations are represented on the CHEAPR Board) who were on the Zoom both said that there are few used EVs available and that it will be a couple of years until there is a critical mass of inventory. They said the rebate would induce dealers to bid on used EVs that become available via an auction, which would speed the accumulation of inventory in the state. They also cautioned that the incentive has to be structured in a way that prevents “flipping.”

The supplemental LMI and used EV rebates will not come online until the first quarter of 2021. The backend architecture still has to be developed.

The request for e-bike rebates met with a mixed response.

E-bikes were not part of the CSE proposal. Many on the Zoom felt that e-bikes have the potential to be a valuable component of an emission-free transportation mix, especially in the larger urban centers. A petition was submitted to DEEP to formally make this request. Here is a link to the letters. DEEP raised the question of whether it is statutorily permissible to incorporate e-bikes into CHEAPR (they will research that further). Some others felt that an e-bike rebate is a good idea, but that it shouldn’t be part of CHEAPR.

Dealer Incentive

The proposal modifies the dealer incentives to be either $125 or $75, depending on the level of rebate. When CHEAPR was first begun, they were as high as $300.

Fuel Cell Vehicles

Several participants voiced skepticism about the inclusion of a fuel cell rebate, especially considering that no vehicles of this type are currently sold in the state. DEEP briefly explained (there really wasn’t time to get into it) that it had to do with the multistate ZEV and CARB arrangements that CT participates in.

The CHEAPR board

While CHEAPR had a quorum to hold this meeting, over a year after the enabling legislation was passed, and 7 months into its first year, there are still unfilled positions. As far as we know, that number is 2. The board does not include any representation from an EV Advocacy organization (ahem, the EV Club), nor are there any persons of color. (The CHEAPR board itself doesn’t appoint members, though they may have influence.)

Where are the Funds?

CHEAPR is funded to a level of $3MM for 2020. Through May, the program paid $242,000 in rebates. We estimate that payments to dealers amounted to approximately $29,000 (adjusting for Teslas). The presentation from the CSE listed an amount of $1.9MM remaining. So how was the other $829,000 spent?

These are the club’s positions:

• Raise the incentives back to the pre-October, 2019 levels. Given that CHEAPR is so underspent and the supplemental LMI and used incentives will not happen this year, there is virtually no financial risk. The data can be re-evaluated later in the year, along with updated modeling for the LMI and used incentives, to determine the plan for 2021. And even in 2021, based on the dealer POV, there won’t be that many used EV rebates.
• We support the LMI and used EV incentives.
• We support e-bike incentives. There is enough money in 2020 to support a pilot. We are concerned that the wrangling will indefinitely delay action on this.
• Dispense with dealer incentives. They aren’t having a noticeable impact. In the DEEP EV Roadmap, it was reported that incentives were often not being passed along by the dealerships to the salespeople, which is who they were intended for. And the landscape has changed. This is the concluding sentence on the subject: “The auto dealer incentive may have been necessary during CHEAPR’s earliest years, but the availability of greater numbers, models, and types of EVs and the need to maximize available funding for EV deployment may necessitate the discontinuation of the auto dealer incentive.”
• We have nothing against fuel cell vehicles but see no point in keeping this incentive. At least, we would like to hear a more convincing rationale. We don’t see how credits earned from an out of state sale have anything to do with a local incentive.

This is what we think. Whatever your point of view, make it known to DEEP/CHEAPR. The information about how to do that will be provided when it becomes available.