Drive Electric!

Gov. Ned Lamont has signed onto the Transportation Climate Initiative, a regional cap and invest plan which promises to cut emissions from motor vehicles by 26% by 2032. An important part of emission reduction is wider adoption of electric vehicles (EVs) and the state is falling behind the goals set forth in the Multi-State Zero Emission Vehicle Action Plan Memorandum of Understanding (ZEV Plan).

Barry Kresch

The time has come to permit direct sales of EVs in Connecticut and the EV Club of CT is behind a newly introduced bill (SB 127) that would do that.

The Department of Motor Vehicles on January 22  released its updated number of registered EVs in Connecticut (as of January 1, a number that is updated semi-annually.) There are 13,800 registered EVs. According to the ZEV plan, the state has committed to achieving 500,000 registered EVs by 2030. That is a big climb and requires a compound annual growth rate (CAGR) of just over 49% to achieve it. And since we have been tracking this, beginning four years ago, the lowest the needed CAGR has been is 43%, which was at the start of our trend in January 2017. In other words, we have been losing ground.

Consumers deserve to come first and should be able to freely choose EVs that fit their lifestyles, needs, and budgets to accelerate the adoption of electric vehicles and more rapidly transition to a zero-carbon economy.

Outdated dealer franchise laws have been used as protectionism to prevent Tesla and other new EV manufacturers from opening stores in Connecticut. Whether a company has a dealership or not, it is still obligated to obey consumer protection laws and service its vehicles.

Earlier versions of this kind of bill were narrowly crafted to apply only to Tesla. At the time, Tesla was the only EV company seeking direct sales. That is changing. Two new EV manufacturers that are currently taking reservations, Rivian and Lucid, have announced they are using this model, and we expect others will as well.

These companies, which manufacture exclusively EVs and have no franchised dealer network, say that the dealer model doesn’t work for them. Elon Musk of Tesla has written about the dealers, “It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional [gasoline car] business.”

EV Club CT supports all EVs, but looking at the numbers, they have a point. The legacy automobile companies and their dealers are just not selling many EVs. I looked at the July 2020 DMV data (vehicle detail for January 2021 is not yet available). There was a net increase of 1,827 EVs in the file in July 2020 relative to July 2019; 1,361 of these, 74%, were Tesla.

I filed an information request to look at CHEAPR rebates by dealership and received a file of rebates from the program’s inception in May of 2015 until August of 2020. Fewer than 40% of CT dealers had awarded even 10 rebates in five-plus years and only 10% had awarded at least 50.

There has been plenty of other reporting in recent years on this issue, for example, in the New York Times and 2 EV Shopper Studies by the Sierra Club. In the second of the Sierra Club studies in 2019, they found that 74% of dealers visited nationally did not have an EV on the lot. Our EV Club did some of the fieldwork for the Sierra Club in 2019 and the problem is more insidious than that. Our shoppers found that even when a dealer had EVs in stock, the salesperson would often attempt to switch-pitch a gasoline car.

The dealer franchise laws were created in the 1930s to protect dealers from their own affiliated manufacturers. They did not want to risk investing in a business locally only to have the manufacturer open across the street. The laws are outdated and are being used to stifle competition. The Federal Trade Commission has blogged about this issue in its “Competition Matters” blog and said, “Dealers contend that it is important for regulators to prevent abuses of local dealers. This rationale appears unsupported…” “Such change can sometimes be difficult for established competitors that are used to operating in a particular way, but consumers can benefit from change that also challenges longstanding competitors.”

Today, a Tesla purchaser has to pick up their vehicle in Mt. Kisco, New York. Even customers in the eastern part of the state must travel to Mt. Kisco, as they are not permitted to use the Tesla facilities in Rhode Island or Massachusetts due to laws in those states. If there is anything that is consumer-friendly about this, it escapes me.

The transportation sector accounts for 38% of emissions statewide. Every county in Connecticut has a failing grade for ozone levels. We have almost no chance of meeting the goals set forth in the ZEV plan in a business-as-usual scenario. There are companies that want to sell EVs here. Let’s let them. Let’s encourage them. Let’s buy them!

Barry Kresch is President of the Electric Vehicle Club of CT.

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