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September 4, 2023

Going Green: Car dealerships say they are ready for ‘electrification’ of auto industry

HBJ PHOTO | BILL MORGAN Jeff Aiosa, owner and general manager of Mercedes-Benz of New London, stands in front of an electric vehicle on display in his dealership’s showroom.
Auto manufacturers commit to an electrified future
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Connecticut is on track to join eight states in adopting new standards to slash vehicle emissions, an effort that includes requiring manufacturers to deliver 100% electric vehicles to the state by 2035.

The topic has been a hot-button issue in recent weeks, with supporters emphasizing the need to confront climate change, while detractors say electric vehicles are currently too expensive for the average car buyer.

But some local car dealerships don’t seem concerned about the new standards. Car manufacturers are increasingly adding new electric vehicle models, with some, like General Motors, already committing to a fully electric fleet of car, truck and SUV models by 2035.

As a result, automobile dealers said they think the industry will be prepared for an all-electric future, even as they continue to spar with Tesla, the nation’s largest seller of EVs that has lobbied to reform Connecticut’s franchise laws, so it can sell directly to consumers.

Dealerships said they oppose direct sales by auto manufacturers, but embrace the future of electric vehicles.

“We’re on an irreversible path to electrification, but it will be gradual,” said Jeff Aiosa, an executive board officer at the Connecticut Automotive Retail Association (CARA), and owner and general manager of Mercedes-Benz of New London. “It’s a dial that is turning, it’s not like flipping a switch.”

The changes

Gov. Ned Lamont and the state Department of Energy and Environmental Protection (DEEP) announced in July that Connecticut plans to adopt regulations that aim to make light-duty cars and trucks up to 90% cleaner. The regulations also require manufacturers to deliver more zero-emission vehicles to the market gradually year-over-year, resulting in 100% light-duty electric vehicles by 2035.

The standards implement legislation adopted in 2003, which requires the state to adopt and remain consistent with California’s standards for light-duty vehicles.

Meantime, the 2022 Connecticut Clean Air Act requires increasing percentages of medium- and heavy-duty electric vehicle sales until 2032. It also will reduce emissions from internal combustion engine medium- and heavy-duty vehicles by up to 90%.

The standards are for new cars and will be adopted by numerous other states, including Rhode Island, Massachusetts, Maryland, New Jersey, New Mexico, New York and Vermont.

Kathy Harris

Electric vehicle sales in Connecticut made up about 7% of all sales in 2022, said Kathy Harris, a senior clean vehicles and fuels advocate with the international environmental nonprofit Natural Resources Defense Council (NRDC).

That percentage was up to about 9.63% through the first half of 2023. Automakers will be more likely to send their new electric vehicles to Connecticut because the state has adopted strict sales and emissions standards, Harris said.

Industry perspective

Aiosa said the number of electric vehicle models made by manufacturers has grown tremendously in recent years. Mercedes-Benz has invested $45 billion toward electric vehicle programs, and that’s evident on Aiosa’s dealership lot.

Last year, his New London showroom had one Mercedes-Benz electric vehicle model on display; this year it has five. Several more will be in the pipeline next year, Aiosa said.

“I think that increase is representative of the industry,” he said. “The path to electrification has accelerated significantly, and will continue.”

The auto industry as a whole has committed $210 billion in the United States to build out electric vehicle programs, Harris said, so the manufacturer commitment is evident.

I. Bradley Hoffman

I. Bradley Hoffman, co-chairman of the Hoffman Auto Group, said his company has invested “well into seven figures” in charging stations at its dealerships in East Hartford, Waterbury, New London and West Simsbury. Most of the nine vehicle manufacturers Hoffman Auto Group represents have already announced they’ll go fully electric over the next decade-plus.

“Dealers like myself want to take the extra step because we only see it going in one direction — this is not a ‘let’s see what happens, and we’ll go back to gas in five years.’ That’s not happening,” Hoffman said.

And demand for electric vehicles is on the rise both nationally and globally, according to the International Energy Agency. The organization — which provides analysis, data and policy recommendations to countries with a focus on sustainable energy — said it expects global electric vehicle sales to increase by 35% in 2023, up to 14 million vehicles sold, compared to about 10 million sold in 2022.

EV shares of the overall market globally have risen from around 4% in 2020, to 14% in 2022, the organization said, and is expected to increase to 18% in 2023. Harris emphasized the auto industry is undergoing a “global transition,” not something exclusive to the U.S.

As of July 1, electric vehicle registrations in Connecticut were up 20% since Jan. 1, and 42% since July 1, 2022, according to data from the state Department of Motor Vehicles. Mercedes-Benz of New London has sold up to 60% more electric vehicles so far this year compared to 2022, Aiosa said, which he attributes to having more options for buyers.

Electric vehicle sales in the state could get another boost this fall when Tesla opens its first Connecticut sales and delivery center at the Mohegan Sun casino in Uncasville.

Tesla has been trying for several years to make inroads in Connecticut, but has faced stiff opposition from auto dealers. State law forbids motor vehicle manufacturers from selling their products directly to customers, which is the business model Tesla relies on.

By opening a sales center on tribal land, Tesla has found a way to side-step state law.

The sales and delivery center will allow people to purchase and pick up electric vehicles, and learn more about Tesla’s solar and storage offerings.

Tesla currently has a showroom in Milford, but it can’t sell cars from that location.

Quelling range anxiety

For consumers, adding to local electric vehicle infrastructure and quelling range anxiety are important factors in easing the path toward a non-combustion engine future, experts said.

“A robust charging infrastructure system is going to be a key to helping folks make that transition,” Harris said.

Affordability is still a major hurdle for many car buyers, even though electric vehicle prices have come down in recent years, Aiosa said.

The inside of an electric Mercedes-Benz car.

In August, Senate Republican Leader Kevin Kelly (R-Stratford) and House Minority Leader Vincent Candelora (R-North Branford) said stringent electric vehicle standards will make Connecticut less affordable for low- and middle-income residents.

But as prices continue to drop, infrastructure gets better, and battery life improves, more consumers could be drawn to the technology, Aiosa and Hoffman said.

“Over time, the reticence of the range and of the convenience of public charging infrastructure will be enhanced, and I think that will drive behavior of car buyers,” Aiosa said.

Aiosa, who has been driving a Mercedes-Benz electric vehicle for seven years, praised the technology going into EVs. In the past, he’s compared going from combustion to electric as upgrading from a flip phone to a smartphone.

Still, he said the path toward full electrification is dependent on consumers.

“Whether or not the aspirational termination of combustion by 2035 at the federal level happens, that’s more I think up to the market and less about what dealers, manufacturers or even regulators are doing,” Aiosa said.

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