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October 9, 2017 FOCUS: Construction & Transportation

As electric car sales accelerate, environmental advocates still worry

Photos | Steve Laschever Hoffman Ford Lincoln sales GM Bill Genereux under the hood of a Ford Fusion electric vehicle in East Hartford. Genereux says a state tax credit has been crucial in helping dealerships sell more EVs in recent years.
Photo | Steve Laschever
An EV charger port.
An EV charging station.

In recent years, Hoffman Ford Lincoln general sales manager Billy Genereux has sold and leased from his East Hartford show room an increasing number of plug-in hybrid vehicles, which can run on both electricity and gasoline.

“We've been ordering a lot more the last couple years,” said Genereux, noting that Ford C-Max and Fusion Energi have been the most popular brands with customers.

For every electric vehicle, or EV, Hoffman moves, the state pays the dealership $300. For buyers, the incentive is much higher — as much as $3,000 for a qualifying plug-in hybrid or battery electric vehicle, depending on the model, and $5,000 for a fuel-cell electric car. Combined with a federal rebate of as much as $7,500, buyers can reduce the cost of an EV significantly.

“It makes it really appealing,” Genereux said.

The Hoffman dealership isn't alone in moving more electric vehicles in recent years. The number of EVs sold annually in the state has skyrocketed of late, growing nearly 14 fold since 2011 to 1,512 sales in 2016, according to data provided by the Auto Alliance and R.L. Polk & Co. There are currently 5,565 electric vehicles registered in Connecticut.

In addition to the government incentives, the surge is being driven by falling car prices, better cars and the buildout of more than 300 public charging stations around the state, which have reduced “range anxiety” for more buyers worried about running out of juice.

But even with the recent sales uptick, some worry it won't be enough to help the state achieve its environmental goals.

Transportation is the largest source of greenhouse gas emissions in Connecticut. Reducing the sector's emissions is seen as vital to the state hitting a legal mandate of reducing overall emissions 80 percent below 2001 levels by 2050.

In a 2013 pledge with a group of other states, Connecticut committed to putting 150,000 electric vehicles on the road by 2025, a number it's not on pace to hit.

“I think we all understand that we need more electric vehicles,” said Emily Lewis, a policy analyst at the Acadia Center, a clean energy advocacy nonprofit. “It seems like we all know what we need to do, so let's just do it.”

Acadia wants Connecticut to expand its electric-vehicle incentives and implement other policies that would encourage more residents, companies and government entities to purchase EVs.

As of September, 1,670 residents had taken advantage of the state's CHEAPR rebates, which provide incentives for more than 30 hybrid or fuel cell electric vehicles.

Acadia is pushing the state to be more ambitious in its five-year energy plan that will be issued by year's end, calling for programs such as EV rebates for low-income households and a new pricing mechanism that would make it cheaper to charge electric vehicles overnight.

Dealerships would also like the rebates to stick around.

“I think CHEAPR is absolutely the best way to move the market,” said Jim Fleming, president of the Connecticut Automotive Retailers Association.

The Department of Energy and Environmental Protection (DEEP), which administers CHEAPR, understands the importance of rebates, but has no plans to increase the size of the incentives, said Paul Farrell, assistant director of planning and standards in DEEP's air management bureau.

“I don't look at this rebate program as a long-term solution really,” Farrell said. “Right now we're just trying to kickstart the market. If we can get another three to five years out of CHEAPR, we will be delighted.”

The agency has doled out approximately $4.7 million in CHEAPR rebates since 2015 — funding cobbled together from utility settlements and environmental enforcement actions. CHEAPR funding was set to run out by the end of September, but DEEP replenished the pot with another $2.6 million, ensuring there would be no interruption to the incentives, at least for now.

An evolving goal

Connecticut and seven other states — California (which has been the clear leader in EV deployment), Maryland, Massachusetts, New York, Oregon, Rhode Island and Vermont — in 2013 committed to putting a combined 3.3 million electric vehicles on the road by 2025.

The goal is lofty and perhaps aspirational. So far, none of the states, not even California, is on pace to hit their respective goals, which vary based on how many cars are registered.

However, 3.3 million EVs may not be a concrete target. The eight states that signed the memorandum of understanding four years ago could still declare success, even if a lower total is hit.

The Golden State's Air Resources Board, for example, recently determined that California's goal of 1.5 million vehicles, which would be equivalent to about 15 percent of all registered vehicles by 2025, could actually be reduced by nearly 50 percent.

The reason? The original goal had less to do with the number of electric cars on the road, than with the environmental benefits that greater EV usage could achieve.

Since 2013, electric vehicle technology has significantly advanced, resulting in higher efficiency and vehicle ranges, and more reductions in greenhouse gas emissions. As a result, fewer electric cars are needed to achieve those 2013 EV environmental goals.

“The number of electric vehicles required for compliance is lower than we thought it was going to be, mainly because electric vehicles sold today get better range and have better batteries than vehicles sold in 2012,” said Matthew Solomon, transportation program manager at the Northeast States for Coordinated Air Use Management, which coordinates a task force of the eight states that made the EV pledge.

Unlike California, DEEP has not recalculated its 2025 goal.

Solomon cautioned against assuming the goal would change in exactly the same way as California's did.

“Though California has calculated that its 2025 goal is now around 8 percent, down from 15 percent originally, each state will be different, depending on the exact mix of electric vehicles sold,” he said.

With another eight years to go until 2025, Acadia's Lewis said it's too soon to consider lowering the state's goals yet.

“With Connecticut's emissions well above the 2020 requirement, and transportation being the largest contributor to those emissions, why wouldn't the state continue to aim for the original goal?” she said.

Opportunities, uncertainty ahead

Given the existing sales trend, it's safe to say electric vehicles will become more common on Connecticut's roadways.

According to the Westport Electric Car Club, the most popular EVs in Connecticut are the Tesla Model S, which has a starting sticker price of approximately $68,000, followed by the Chevy Volt, which has a price of approximately $33,000.

But exactly how quickly EVs gain market share will be up to market forces and government policies.

Technology will continue to advance as manufacturers look to shrink batteries and improve EV efficiency.

CHEAPR rebates could be gone well before 2025 rolls around. And federal tax credits are set to begin expiring in 2018, which could put a damper on sales for certain manufacturers.

Some have even worried that the credits could be targeted by Congress as a way to help pay for President Donald Trump's recently unveiled tax cut proposal.

Another uncertainty is Tesla, which has tried unsuccessfully several times to get legislative approval to sell its cars directly to Connecticut consumers. The company has faced strong opposition from auto dealerships, but vowed to continue its lobbying push until it gets its way.

Tesla has said establishing a sales presence in Connecticut would enable it to sell more vehicles here.

Other somewhat arcane market rules could also have an impact, Solomon said.

Under the California emissions rules that Connecticut adopted in 2004, electric vehicle manufacturers will soon be required to start selling more cars in Northeast states, but they will be able to decide which ones get the most attention — perhaps those with the most favorable policies.

See Related Story: Fuel cells await their moment

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