Pub. 1 2019-2020 Issue 2

15 Infrastructure Must Expand to Spur Greater ZEV Adoption. The state has announced goals to install 250,000 electric vehicle char- gers and 200 hydrogen refueling sta- tions by 2025. vi California’s new car dealers strongly support the state’s infrastructure investment programs to ensure that people who make a big investment in a ZEV or PHEV are able to charge their vehicles while at work or on the go. Increased numbers of charging stations and hydrogen fueling stations will undoubtedly help to assuage customer concerns about charging and fueling capabilities while driving longer distances, which will push consumer demand up and help move more of these vehicles off of dealer lots and onto our roads. Dealer Training Is Welcome, But Will Not Change Market Realities. Improving dealer knowledge about ZEVs and PHEVs is often referenced by individuals and organizations trying to make the argument that dealer salespeople are the reason ZEV sales have not taken off. While we maintain that California’s new car dealers are the best in the country at selling ZEVs and PHEVs, we have been consistently clear that our members welcome additional training opportunities on these advanced vehicle technologies. Although dealer training on ZEVs and PHEVs usually comes via the vehicle manufacturer – which makes sense due to the differences in vehicle range and attributes not only across vehicle makes, but also across each manufacturer’s available models – for our part, CNCDA has actively en- couraged our dealers to designate at least one vehicle salesperson to be the ZEV and PHEV on-lot expert, and we have partnered with Plug In America on their PlugStar dealer training program. Dealers are the experts on the vehicles they sell, and this knowledge will only increase as sales of ZEVs and PHEVs increase. Another point to consider is that when sales numbers for ZEVs and PHEVs remain somewhat low at just 7.7 percent of market share, the percentage of time dealers spend on becoming advanced technology experts is spent accordingly. The California Air Resources Board (CARB) 2017 Midterm Review states that not only do all manufacturers with a current ZEV obligation use the dealer franchise model to retail their vehicles, vii but less than 10 percent of ZEV and PHEV consumers in California or Massachusetts report that a sales representative tried to discourage a ZEV or PHEV pur- chase. While 10 percent is relatively low, which is to be expected, we argue that this percentage is highly inflated because the aspects noted in CARB’s survey results should not be characterized as dealer discouragement. In the Midterm Review, the most commonly reported reasons dealers “discouraged” customers from buying a ZEV or PHEV were “the incremen- tal price of the vehicle (sometimes in relation to fuel savings), the vehicle range relative to driving needs, and a lack of inventory or long wait time for product delivery.” All three of these reasons, especially the first two, are simply a result of dealers doing their best to try and find the best car for their customer. If dealership sales- people fail to point out the realities of owning a ZEV or PHEV in terms of vehicle price and vehicle range, they would be doing that customer a dis- service. Dealers certainly do not want ZEVs and PHEVs to sit on their lots unsold, but they have an obligation to their customers to relay all relevant information about vehicle ownership to prospective buyers. In-Dealership ZEV Initiatives Must Be Financially Supported by Vehicle Manufacturers. Pre-purchase rentals or extended test drives of ZEVs have also been referenced as valuable services not currently offered by dealers. x In fact, some manufacturers do offer extend- ed test drives for consumers via their dealer network. However, both pre- purchase rentals and extended test drives would be very difficult for deal- ers to undertake without manufactur- er direction – after utilization in such programs the vehicles would become used as a matter of law, which would cause the dealership’s monthly numbers to take a substantial hit. While dealers want to be partners in the process of getting more custom- ers into ZEVs and PHEVs, they also operate on a business model that has very tight margins. That being said, the majority of our member dealers are ready and willing to work with the manufacturers to implement these kinds of programs at their stores. Lack of ZEVs and PHEVs on dealer- ship lots is another factor often refer- enced as a possible reason for low sales rates. xi Vehicle availability (or lack of vehicle availability) on dealer lots is the result of complicated ve- hicle allocation processes from each dealer’s associated manufacturer. Much of the vehicle allocation break- down is due to where manufacturers, as a result of past sales data, dealer- ship market share, regional statistics, and a variety of other factors, think certain vehicles will sell best. In ad- dition, often dealers can maintain vehicle allocation preference data- bases that detail which vehicles deal- ers want (or do not want), based on their own past and projected future sales numbers for particular models. Many automakers try to closely match production with demand, because it is not profitable for either manufac- turers or dealers when vehicles sit unsold for long stretches of time on dealership lots.