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A Critical Partnership in the Push for Electric Cars

Auto dealers aren't doing much to sell them. One state is trying to get them to step up their efforts.

A Tesla store
A Tesla store
(Flickr/Open Grid Scheduler/Grid Engine)
When was the last time you saw a TV commercial for an electric vehicle? Or received a sales pitch for an EV from an auto dealer? More than likely the answer is never. This comes as no surprise since, for a variety of reasons, auto dealers aren't marketing them aggressively.

That's one reason sales of zero-emission plug-in electric cars haven't taken off. While sales are growing, less than 200,000 of the 17 million new cars sold in the United States last year were models powered solely by electricity. That's a big problem for states that see zero-emission EVs as an important component of their efforts to improve air quality. But for the most part, states are doing little to move the needle away from their residents' overwhelming reliance on the fossil-fuel-powered internal-combustion engine.

The lackluster sales of electric cars are not for want of capable vehicles. While Tesla gets most of the attention, just about every major automaker is now in the game. Driving range between charges is increasing, surpassing 200 miles for some models. EVs are more affordable. Battery technology is improving, providing greater range and faster charging. And the charging infrastructure is growing, aided by funding provided by some states to build roadside charging stations.

Moreover, electric cars have inherent qualities that would appeal to motorists looking for a different driving experience. Beyond the savings on fuel, they require much less maintenance since there are fewer moving parts (and much less interior noise), you don't have to leave home to "refuel," and they accelerate more quickly. And while EVs' sticker prices are still higher than those of comparable gas-powered vehicles, that's offset significantly by government incentives that include a federal tax credit of up to $7,500 for new EV purchases (which surprisingly survived the recently passed federal tax law) as well as state inducements ranging from rebates to sales-tax exemptions to free parking and reduced tolls.

So why aren't current incentives enough to move the needle in the market for EVs? Simply put, auto dealerships aren't promoting them because the dealers rely on service revenue and parts sales to generate most of their profits. Since EVs are more reliable and require less routine maintenance, they're not seen by dealers as a continuing source of substantial revenue. That's likely to be one of the reasons dealerships aren't willing to invest in training their salespeople on the unique features of EVs, making it difficult for them to make effective sales pitches.

So what can states that want to see more electric cars on their roads do? One answer might be to look to a Connecticut program that offers incentives not only to car buyers but also to auto dealers. Since 2015, the state's dealerships have been eligible for cash rebates of $300 for each EV they sell under the Connecticut Hydrogen and Electric Automotive Purchase Rebate (CHEAPR) program. (Consumers can also apply for a state rebate of up to $5,000 through the dealership.)

The state's dealer incentives go beyond the monetary to include a chance at bragging rights. Since 2014, the Connecticut Department of Energy and Environmental Protection, in partnership with the Connecticut Automotive Retailers Association (CARA), has presented an annual "Revolutionary Dealer Award" to the dealership that sells or leases the most electric cars, hybrids and fuel-cell vehicles. The awards are presented in late November each year to coincide with CARA's annual automotive show. These high-visibility presentations generate publicity and give the dealerships a chance to show off their wares.

In 2016, the Center for Sustainable Energy did a study to evaluate whether the CHEAPR dealer incentive program was working. It found that there are problems in how the rebate is distributed within the participating dealerships, as close to 70 percent of the sales employees did not receive any part of the rebate. Overall, however, the study showed that the program had heightened the interest of the dealerships in selling EVs.

Connecticut's dealer-incentive program is unique, and it's too early to tell if it will significantly accelerate electric-car sales in the state. But it seems a worthy experiment. After all, as CARA President Jim Fleming put it in a press release launching the Revolutionary Dealer Award program, "Auto dealers are critical partners in putting Connecticut on the road to clean vehicles because they are the first point of contact with prospective new car purchasers." It's not unreasonable to think that nurturing that relationship might pay real dividends in moving toward an electric automotive future.

A policy analyst with the New Jersey state government
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