Pub. 1 2019-2020 Issue 2

14 Zero-Emission Vehicles: A CNCDA Perspective Alisa Reinhardt, Director of Regulatory Affairs, CNCDA C alifornia’s new car dealers are on the front lines of our state’s investment in zero- emission vehicles and are committed to growing these sales numbers year over year to support the state’s goals of five million ZEVs on the road by 2030. i While we sup- port ambitious goals and the consum- er incentives it will take to get there, we have been clear in our advocacy that strict mandates and regressive penalties go too far – consumers should not be punished if they simply cannot afford, or have no way to charge, a new zero-emission vehicle. The good news is that consumer preferences are changing, albeit slowly, likely in large part due to ad- vances in zero-emission vehicle tech- nology and the increasing number of new (and used) models to choose from. Registration numbers from CNCDA’s most recent Green Vehicle Report show that there are now over 157,000 electric, fuel cell, and plug-in hybrid vehicles on California roads. ii Despite this progress, we are still a long way to 5 million ZEVs by 2030. Barriers to Consumer Demand for ZEVs Hinder Sales. Discussions regarding the market realities of zero-emission vehicles (ZEVs) and plug-in hybrid electric vehicles (PHEVs) up to this point cannot be ignored. As we have continually stressed, California’s new car dealers will sell any car to any consumer qualified to purchase his or her preferred vehicle. At this point, the consumer demand for ZEVs and PHEVs has been low in relation to demand for vehicles with conven- tional technology. Consumers have many reasons behind their choice in vehicle – vehicle purchase price, gas prices, family size, length of commute, choice of leisure activity, vehicle appearance and styling, resi- dential and workplace charging avail- ability, etc. This list of priorities will be different for every consumer based on their individual circumstances. Price Premium for ZEVs Must Decrease. To make strides towards the state’s goals, because of the comparatively high cost of ZEVs and PHEVs, we must push for increased purchase incentives. For example, the 2019 Volvo XC90 internal combustion engine (ICE) model is currently listed on the Volvo Cars website at a starting price of $47,700. Compare that with the starting price listed for a 2019 XC90 PHEV – $67,000. iii The same discrepancy in vehicle price can be seen with non-luxury ve- hicles as well – General Motors’ 2019 Chevrolet Volt PHEV starts at $33,520, while a comparable ICE sedan in terms of specs, the 2019 Chevrolet Cruze, starts at $17,995. iv According to a report by Bloomberg New Energy Finance, ICE vehicles and ZEVs will not reach price parity until 2025 at the earliest. v While the incentives made available to consumers on both a state and federal level have certainly helped accelerate market growth up to this point, the phasing out of these incen- tives, coupled with a general lack of certainty regarding available fund- ing for the incentives and confusing eligibility requirements, are likely having a negative impact on this still- nascent market. HOV lane access is another highly valued incentive for consumers to encourage the purchase of ZEVs and PHEVs. During the past few years, when the maximum number of al- lotted green HOV stickers reached capacity and were no longer avail- able, ZEVs and PHEVs on our dealer lots (in the Bay Area and in Southern California in particular) sat unmov- ing for months on end. Now, with the state’s recent phaseout of green HOV stickers altogether, drivers who made early investments in hybrid vehicles (and customers buying used hybrid vehicles) can no longer ben- efit from the HOV lane access they were promised.