With the onslaught of Covid-19 last year, concern over climate change and air pollution was set aside. The Trump administration had already pulled the US out of the Paris climate accord, and there was no support for clean vehicle incentives and renewable energy.
What’s the latest on incentives and public education drives? Two vehicle manufacturers have been bumped from federal tax incentives after crossing the cap placed per automaker, but all the other automakers have access to it (and one more is approaching the cap.) This year, clean vehicles and energy are coming back. While it seems like cryptocurrency has become the hot topic, there’s been a lot of movement on environmental, social and governance (ESG) issues, demand for renewable energy, and serious moves by automakers to get back on track. Perhaps losing 15 months has inspired many stakeholders to revive their commitment to hitting targets set in recent years.
But the federal legislature is considering more incentives that could go even higher than the $7,500 tax incentive. There’s also a move being made for medium- and heavy-duty EVs that being considered in Washington.
Don’t forget that EV sales get a lot of support at several states across the country. It does require a bit of study and analysis to tap into.
As for public education campaigns, Plug In America has made a big difference here, including starting to break through the wall between dealers and consumers. A new study by an EV advocacy group brings even more hope for the retail and fleet markets.
Edmunds looks at federal tax credits
Federal tax incentives are still in place, but they will run out in their current state. The current federal tax incentives are applied to each manufacturer and continue until the automaker sells 200,000 qualified vehicles, with most going up to $7,500 tax credits for plug-in electric vehicles. Tesla hit the milestone first in July 2018. As a result, there are no federal tax credits for Tesla now.
In the last quarter of 2018, GM became the second carmaker to sell 200,000 qualified plug-in vehicles, Edmunds reported. Nissan is next in line for a credit phaseout, but Edmunds analysts think it could go into 2022 before the sales benchmark is hit. All other makers are trailing far behind in plug-in vehicles.
The incentive is based on the electric vehicle’s battery size. For example, the Toyota Prius Prime only qualifies for a $4,502 tax credit.
New incentives being considered in Washington
The federal tax incentives for EVs might be replaced with new legislation in Washington. A new bill called “Clean Energy for America” that passed the U.S. Senate Finance Committee this week would raise that to $12,500.
The legislation would keep the $7,500 level in place but would then add $2500 if the EV was assembled in the U.S., and another $2500 if it was made at plants represented by a labor union. The bill also sets a maximum MSRP for qualifying EVs at $80,000. The current EV tax credit has no price limits.
The bill now moves to the full U.S. Senate for consideration and approval.
Fleets operating medium- and heavy-duty vehicles are asking for more incentive from the federal government. CALSTART’s zero-emission transportation coalition is tapping into the Biden Administration’s FY22 Budget Request proposal for an upfront cash payment option in a zero-emission tax credit.
A broad coalition of 60 organizations called for congressional action on the option in a letter. Partners who co-signed include leaders in truck manufacturing, technology partners, and charging and fueling infrastructure companies. Tailoring a tax incentive amount to offset a large portion of the incremental cost with the option to monetize the credit, as the FY22 Budget proposal does, will help aggressively knock down this barrier to deployment, CALSTART said.
What Fisker thinks about it
Henrik Fisker, CEO, Fisker Inc., has asked the federal government to consider his plan, called “75 and more for 55 and less.” It would be a point-of-sale rebate of $7,500 plus $10 per mile of certified driving range for battery electric vehicles (BEVs) priced at $55,000 and less.
With a $7,500 rebate plus the range incentive, access to battery electric vehicles become more widespread by becoming a reduced transaction price, especially when received at the time of sale, and not as a delayed tax credit, he said.
“That driver of demand is magnified when applied to vehicles with a sticker price of less than $55,000. According to Cox Automotive, the average selling price of a new vehicle in the United States is $41,000, and over 80% are transacting under $55,000,” Fisker wrote.
The base price of the 2022 Fisker Ocean will be $37,499. Many buyers will qualify for the $7,500 federal EV tax credit, bringing the price down to less than $30,000.
State incentives available around the country
Forty-five states and the District of Columbia provide an incentive for certain EVs and/or PHEVs, either through a specific utility operating in the state or through state legislation.
Several states have a dozen or more programs; some of them are designed for fleet and transport operators using medium- and heavy- duty vehicles. Many of the incentives are geared only to businesses and not individual personal vehicle owners. Some credits come in the form of exemptions from fees and inspections. Others are non-monetary incentives such as carpool lane access and free parking.
California offers plug-in hybrid (PHEVs) and zero emission light-duty vehicle (ZEV) rebates through its Clean Vehicle Rebate Project (CVRP). It offers rebates for the purchase or lease of qualified vehicles. Qualified vehicles are those light-duty ZEVs and PHEVs that the California Air Resources Board (CARB) has approved or certified. Under the program, CARB offers rebates of up to $4,500 for fuel cell electric vehicles (FCEVs), $2,000 for BEVs, $1,000 for PHEVs, and $750 for zero-emission motorcycles.
California’s Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (HVIP) and Low NOx Engine Incentives, CARB provides vouchers to eligible fleets to reduce the cost to purchase qualified electric and hybrid trucks and buses at the time of purchase. Vouchers are available on a first-come, first-served basis and range from $2,000 to $315,000 depending on vehicle weight and type. Only fleets that operate vehicles in California are eligible. Voucher amounts vary depending on whether the vehicles are located in a disadvantaged community.
PlugStar Program bridges the EV sales gap Plug In America’s PlugStar Program has really taken off and is bridging a wide gap between dealers and advocates of EVs, including automakers ramping up production of these vehicles and needing a proactive dealer network to sell them through. The non-profit EV advocacy group began its PlugStar EV dealer training and certification program in 2018. Since then, thousands of dealer sales staff and hundreds of dealerships across the country have been trained in the program.
Plug In America just conducted a study to evaluate the effectiveness of the program. Key findings include:
–PlugStar trained sales staff sell four times more EVs than their untrained counterparts.
–PlugStar certified dealers sell 20 percent more BEVs than non-PlugStar dealers.
–PlugStar dealers are two times more likely to get 5-star customer ratings than non-PlugStar dealers.
The study also explored the major batteries that exist in getting through to EV shoppers and given them the service level they need — bridging what’s called the “EV Sales Gap.” Barriers in getting through to consumers include: consumer awareness of the varying aspects and benefits of EV ownership, including EV fueling and incentives.
Barriers for making it work with franchised auto dealers include finding ongoing support in a rapidly changing EV ecosystem, confidence in selling a new technology, and alignment of automotive dealership incentives for selling EVs.
And in other news……….
ID.4 AWD details come out: The new Volkswagen ID.4 AWD electric SUV revealed on June 17 will offer Americans yet another reason to embrace sustainable driving. With two electric motors, max 295 horsepower and an estimated 0-60 mph time of 5.7 seconds for the AWD Pro model, the ID.4 AWD offers performance and all-weather traction at a starting MSRP that no other all-wheel-drive electric vehicle for sale in the U.S. can beat. It’s MSRP is $43,675 and has an estimated range of 298 miles on the European WLTP test cycle.
“We’re committed to making EVs the default choice for Americans,” said Scott Keogh, President and Chief Executive Officer of Volkswagen of America. “The all-wheel-drive ID.4 merges the utility and zero-emissions driving delivered by the rear-wheel-drive vehicle with the performance from our sporty vehicles.”
Ford brings in charging management partners: Ford announced June 17 it is acquiring Electriphi, a California-based provider of charging management and fleet monitoring software for electric vehicles. This puts Ford in a solid position to resolve a hurdle for fleets attempting to adopt electrification — managing charging for efficiency. Electriphi’s team and services will be integrated into Ford Pro – a new global business within Ford committed to commercial customer productivity and to developing the most advanced charging and energy management experiences. “As commercial customers add electric vehicles to their fleets, they want depot charging options to make sure they’re powered up and ready to go to work every day,” said Ford Pro CEO Ted Cannis. “With Electriphi’s existing advanced technology IP in the Ford Pro electric vehicles and services portfolio, we will enhance the experience for commercial customers and be a single-source solution for fleet-depot charging.”
Mercedes partnering for US charging expansion: Mercedes-Benz USA, together with its charging partners, is committed to raising the bar on EV charging with Mercedes me Charge – the official charging ecosystem of the EQS and other future electric mobility products. Mercedes me Charge offers important innovations and convenient charge management services for the groundbreaking new all-electric EQS Luxury Sedan including a partnership with ChargePoint that simplifies the process of finding, using and paying for charging sessions on all major networks in North America. Through the Electrify America program, Mercedes me Charge enables complimentary 30-minute charging per session for the first two years from account activation and allows customers to simply “Plug & Charge” at all Electrify America DC fast chargers.