Pub. 16 2017-2018 Issue 3

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 27 new jersey auto retailer W W W . N J C A R . O R G build ZEV readiness, we can expect certain factors to come into play, including con- sumer awareness, charging infrastructure, and the availability of customer incentives. In many ways, the pooling provisions rep- resent a real opportunity for New Jersey dealerships. The manufacturers are not, technically, required to sell significantly higher volumes in New Jersey (though, as mentioned, they’d need to make up any New Jersey credit deficit with surplus credits earned elsewhere in the region). But they should be eager to partner with dealerships to tap into the many potential new markets in New Jersey that have yet to experience the rapid growth in EV sales that we’re seeing now in states like Connecticut andMassachusetts. What’s more, things are increasingly lining up to support ZEV sales within New Jersey. There are now over 500 public charging outlets already installed around the State, increasing buzz among consumers around exciting new plug-inmodels, and, of course, the State Sales Tax exemption for BEVs, a reliable incentive that pencils out to over $2,500 in savings for a typical EV buyer. In addition, New Jersey’s Department of Environmental Protection (NJDEP) has launched several programs aimed at expanding access to charging infra- structure throughout the State. Through its workplace charging grant program It Pay$ to Plug In, NJDEP has awarded nearly $850,000 in grants to help businesses install chargers for use by their employees. While the initial round of funding has been ex- hausted, NJDEP has received preliminary approval for $3.6 million in additional transportation funding for strategic de- ployment of an expanded electric vehicle charging infrastructure. Once authorized, this funding will allow NJDEP to reopen It Pay$ to Plug In, and to expand the pro- gram to additional strategic settings to help build out the public charging network Statewide, covering not just workplaces but also downtown areas, leisure destinations, public colleges and universities, and major transportation corridors. So, given all of that, how many EVs can we expect OEMs to deliver for sale in New Jersey? While we still can’t make a precise estimate, we can look at some relevant benchmarks for context. For example, we know that if total industry sales remain at current levels across the entire ZEV state “pool” (roughly 3M annual sales in 2016 in the nine pool states,) manufacturers collectively will need to submit about three million credits through 2025. CARB projects that across all the pool states, manufacturers will have a collective surplus of 840,000 credits by the end of 2017, reducing the combined industry-wide obligation over the next eight years to 2.2 million credits. Assuming New Jersey maintains its 21 percent share of total LDV sales in the nine pool states, its proportional share of the total requirement from all man- ufacturers from 2018 to 2025 would be 460,000 credits. So how many cars does that translate to? Well, that’s going to be different for each manufacturer, because each BEV and PHEV gets its own specific credit score. But we can calculate a theoretical upper and lower bound for these nominal requirements (remember we still haven’t ac- counted for pooling). If, for example, the full credit requirement was met entirely with cars like the Bolt, which earns 4 credits apiece, then manufacturers would need to deliver just under 120,000 for sale in the State over the next eight years. In the other extreme, if manufacturers were to comply entirely with vehicles that earn the lowest amount of credits (which seems unlikely given the current industry trend toward vehicles with greater range), they’d need to deliver around 380,000 PHEVs and around 320,000 BEVs in the same time frame. Of course, because of credit pooling, those numbers are just benchmarks. It will be up to the manufacturers to choose where within the pool they want to earn the ZEV credits they need. For dealerships that are interested in stepping out as technology leaders, the pooling provision of the ZEV rule presents an opportunity to partner withmanufacturers in tapping this new and rapidly growing market segment. For those dealerships that are still uncertain, the reg- ulatory flexibilities described above should provide some clarity – and hopefully relieve some anxiety – about the manufacturers’ near-termobligations. And the coming year will present a terrific opportunity to learn more about electric-drive technology, and see why it is appealing to an ever-increasing share of the driving public. Here at NESCAUM, we’re working with various states to support ZEV deployments across the northeast and beyond through innovative policy work, technical analysis, and concerted stakeholder engagement. We’re working with the OEMs to devel- op an outreach campaign to help spark consumer interest in driving electric. As facilitators of the ZEV Task Force Deal- erships Workgroup, we are talking with dealer associations on a regular basis, to make sure we hear about any concerns and to build on opportunities to work together to grow the ZEV market. Matt Solomon is TransportationProgramManager atNESCAUM. Hecanbereachedat517.259.2029 or, via email, at msolomon@nescaum.org. 1 Ten states in total are implementing the ZEV Program requirements: California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont. 2 The pool states consist of all ZEV Program states except California. Credits traded between Oregon and any other pool state are discounted by 30%. 3 California Air Resources Board, Advanced Clean Cars Midterm Review Report, Appendix A, Table 3. https://www.arb.ca.gov/msprog/acc/mtr/ appendix_a.pdf Credits