Here’s how the strict new EPA rule could impact US EV sales
The Environmental Protection Agency (EPA) announced a strict new auto pollution rule in April that will all but ensure that EVs make up as much as 60% of new cars sold in the US in just seven years – here’s how that could impact EV sales.
Electrek spoke with Ronen Slonim, lead data analyst at Fullpath, an auto industry customer data and experience platform, about how the new EPA rule could impact car dealerships, original equipment manufacturers (OEMs), and EVs sold by direct sales.
How will the EPA’s new rules impact direct-sales models vs. dealerships?
Let’s look at Tesla, which uses a direct-sales model. Tesla has cut their prices several times over the last year or so in an attempt to compete with pricing offered by dealerships and engage a wider audience. While Tesla’s cuts initially resulted in a boost in sales numbers and a short-term decline in EV sales at dealerships, this method of price slashing to beat dealers is not sustainable in the long term, especially when you consider the steady increase of EV purchases at dealerships in the second half of 2022.
Volkswagen dealership EV sales jumped by 126% during the second half of 2022 compared to the same period in the previous year, and brands such as Kia and Volkswagen, which are producing quality EVs at lower price points, can be credited with pushing Tesla to drop their prices in the first place.
While EV adoption in the US has been slow compared to much of Europe and Asia, competitive pricing has proven to increase interest and purchasing. The EPA’s proposed rules will open up the market in the US, providing dealerships with an opportunity to educate the public and increase EV sales.
How have OEMs that introduced EV sales fared so far?
Though the general environment is challenging, we’re seeing a widening gulf between those OEMs that offer EVs and those that don’t. Those who do have EV offerings are faring much better than their have-not counterparts.
Almost all car brands have seen a decrease in the number of cars sold, both new and used, in 2022 as compared to 2021. However, Kia not only saw a massive 33.5% increase in sales following the pandemic but also saw a 3.5% increase in 2022 sales compared to 2021. Kia has also seen one of the lowest percentage changes of returning customers in three years (-0.9%), compared to the average reduction in returning customer sales (-22.6%). Kia’s EV-centric mindset might explain why it’s seeing continued success while major car brands such as Toyota are struggling to maintain market relevance due to a lack of EV strategy.
Electric car sales increased despite recent industry and economic hurdles, yet Toyota doesn’t even make the top 20 regarding EV production. Toyota slipped to No. 2 in auto sales in the US, with General Motors taking the top spot.
What will the implications of the EPA’s new rules be when it comes to brand perception and loyalty?
Car brands that have put faith in their EVs have seen greater success and brand loyalty than those that haven’t. The EPA’s proposed rules might appear drastic, but the auto industry has been driving the change with the rapid adoption of EV initiatives from major OEMs and significant increases in EV sales. OEMs that prioritize adoption have seen greater success in the past year.
OEMs were once able to bank on brand loyalty, with statistics from just five years ago showing 81% of used and 76% of new car owners repeatedly buying the same type of car. While brand loyalty is rapidly decreasing in automotive, data suggests that consumers are more loyal to the offerings, prices, and initiatives taken by OEMs, with major growth in EV sales at dealerships seen in the second half of 2022.
Despite still seeing fewer returning customers, Volkswagen has managed to slow their year-over-year reduction from -31% customer return sales from 2020-21 to -16% in 2021-22. The significant reduction indicates that Volkswagen’s new auto strategy, which focuses on digital adoption and EV initiatives, is making a significant impact. Comparing Volkswagen’s EV sales stats with returning customer sales data suggests that consumers may no longer be loyal to a specific brand, but a brand’s commitment to meet consumer demand and interests has become a defining factor in car sales.
This trend can be seen across all car brands and price points. For instance, Porsche is the only OEM to have seen brand loyalty increase a significant 32% since 2019. By prioritizing its electric sports car, Porsche has positioned itself as the must-have luxury car brand.
Read more: A dramatic new EPA rule will force up to 60% of new US car sales to be EVs in just 7 years
Photo: VW
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A new, all electric Peterbilt 579EV is in-service at Honda’s Lincoln, Alabama assembly plant, where it’s busy transporting newly-built Honda cars from the plant to a nearby railhead for shipment to dealers across the country.
Part of a pilot program between Honda, Alabama Power, and Virginia Transportation Corp., the new electric semi truck will help stakeholders gather data about the practicality and performance of the battery-powered Pete and use it to generate case studies for broader electrification initiatives. Other supporters of the pilot project include the Alabama Clean Fuels Coalition and, of course, Peterbilt.
“We remain committed to delivering for our customers and the environment,” offered Leo Doire, owner and CEO of Virginia Transportation Corp. “Our new Peterbilt 579EV model will be tested to determine how well it performs against the high productivity demands of our operations. The partners we have at the table will help us maximize this opportunity and prepare to scale up if we get the results we are hoping for.”
The truck itself has been spec’ed to be perfect for the kind of short haul and drayage applications Honda has in mind. This particular Peterbilt 579EV is fitted with PACCAR’s 400 kWh battery and a 670 hp electric motor good for an impressive 2,050 lb-ft of peak torque at 0 rpm.
The truck offers 150 miles of operating range and can be charged in about 3 hours on a 120 kW charger installed specifically for that purpose. A charger, it should be noted, that was partially paid for by Alabama Power.
“Alabama Power’s ‘Make Ready’ program provides businesses with valuable rebates to help reduce the upfront costs of installing EV infrastructure,” says Alabama Power Electric Transportation Manager Hasin Gandhakwala. “We are committed to partnering with customers who are exploring state and federal grant opportunities. Alabama Power is dedicated to advancing EV technologies to better serve the needs of our customers.”
The electric semi is a continuation of a decarbonization project Honda initiated in 2011, when the company recruited Virginia Transport Corp. to help find ways to reduce emissions at its Alabama facilities. VTC’s efforts have led to changes that displaced more than 475,000 gallons of diesel in 2023 alone.
Electrek’s Take
With the big Pete’s 82,000 lb. GVWR and 150 miles of range between charging sessions, it seems like these guys will be making a lot of back-and-forth runs between the Honda plant and the CSX terminal to me. Here’s hoping they see the benefits of electrifying the rest of their vehicle transport fleets somewhat sooner than later.
SOURCE | IMAGES: Alabama Power.
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On today’s episode of Quick Charge, we’ve got big solar breaking ground all over, despite the incoming administration’s supposed lack of love for home-grown clean energy. Our guests today walk us through home solar, energy storage, and more.
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Read more: Saldivar’s Trucking: first owner-operator to deploy Volvo VNR Electric semi.
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Tesla is now using ‘Tesla Electric’, its electric utility service in Texas, to help sell cars with a new incentive.
After gaining experience through its virtual power plants (VPPs), Tesla took things a step further with the launch of “Tesla Electric” back in 2022.
Instead of reacting to specific “events” and providing services to your local electric utilities, as Tesla Powerwall owners have done in VPPs in California, Australia, and a few other markets, Tesla Electric is actively and automatically buying and selling electricity for Tesla Powerwall owners – providing a buffer against peak prices.
The company is essentially becoming an energy retailer.
Tesla Electric is currently only available to Powerwall owners in Texas and the UK, but the company has plans to expand its products through this new division.
The company has been growing its Tesla Electric userbase in Texas and now it plans to use it to help sell cars.
Tesla has two different plans under the program:
| Feature | Tesla Electric Fixed Plan | Tesla Electric Dynamic Plan |
|---|---|---|
| Pricing Structure | Competitive fixed rate for electricity, with a discounted rate during low-cost hours. | Competitive variable rate, with higher rates during peak demand periods. |
| Contract Term | 12-month commitment. | Month-to-month flexibility. |
| Unlimited Vehicle Charging | Available for an additional $15/month per vehicle, allowing unlimited charging. | Available for an additional $25/month per vehicle, allowing unlimited charging. |
| Powerwall Credits | Earn $400 credit per year per Powerwall by participating in the Tesla Virtual Power Plant, with Tesla managing the Powerwall to share energy with the grid when needed. | Earn $120 credit per year per Powerwall by participating in the Tesla Virtual Power Plant, with the customer managing the Powerwall to optimize earnings. |
| Energy Sharing with Grid | Sell energy back to the grid at a fixed rate per kWh. | Sell energy back to the grid at 90% of the real-time market price per kWh. |
The first one enable you to charge your electric car for just $15 a month.
With this new incentive, Tesla is brining that down to $5 a month for a year for people who take delivery by the end of the year:
Get $5/mo Unlimited Overnight Charging With Tesla
To get unlimited overnight charging for $5 per month per vehicle for a full year, you must complete the following steps by December 31, 2024:
- Order and take delivery of a new Tesla vehicle
- Sign up for the Tesla Electric Fixed Plan
To be eligible, you need to live in an area of Texas that allows you to choose your electricity provider, be a new Tesla Electric member and take delivery of a new Tesla vehicle. Promotion is subject to change at any time.
This appear to be part of Tesla’s effort to deliver a record number of more than 515,000 vehicles in Q4 in order for its annual deliveries not to be down for the full year.
ver the last few weeks, we have been reporting on a series of sale incentives that Tesla has put in place to make sure it has the demand to achieve this record quarter.
In Europe, it includes a year of free Supercharging and heavy discounts.
In the US, there are also good inventory discounts, 3 months of free Supercharger and FSD, FSD transfer, and more.
And everywhere, Tesla is heavily subsidizing loans with lower interest rates.
But it’s the first time that Tesla is using such a targeted incentive, at the state level, and using its Tesla Electric program.
It’s interesting.
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