Dealer payment is unique among statewide electric vehicle rebate programs
The first two years of electric vehicle (EV) rebates in Connecticut have helped boost EV sales in the state by nearly double since 2015. The rebates, combined with a unique incentive for dealerships, also are playing an important role in motivating dealerships to sell EVs, according to a dealer survey reported by the Center for Sustainable Energy (CSE).
The Connecticut Hydrogen and Electric Automobile Purchase Rebate (CHEAPR) program, overseen by the Connecticut Department of Energy & Environmental Protection and administered by CSE, has awarded more than 1,900 incentives for a total exceeding $5,153,000. Connecticut and New York are the only states to offer EV programs that allow car shoppers to receive their "cash" rebate as a direct discount at the point of sale, and CHEAPR is the only one that provides a dealer incentive for each rebated vehicle.
According the CSE’s Brett Williams, principal advisor for clean transportation and co-author of the dealer survey report, the dealer incentive has been “moderately to very important” in convincing dealers they can make a reasonable profit on EVs, motivate their staff to sell electric cars and spend the time required to submit rebate applications. The survey showed the dealer incentive encourages sales staff to spend more time with EV car shoppers. However, sharing the dealer incentive with sales employees was found to be uncommon.
“More typically, the incentive was viewed as dealership compensation for program participation, for example the time required to submit rebate applications,” Williams notes. Some dealerships indicated the rebate is written into the vehicle profit, with a proportion going to the sales staff as commission. Others reported using it to cover other EV-related costs at the dealership or even to seal a sales deal by helping customers to pay for vehicle charging equipment.
The CHEAPR program has significantly changed dealer perceptions of selling EVs, with 74 percent of respondents saying that the rebate has made them and their sales staff more open to EVs as a real alternative to conventional vehicles. Additionally, 84 percent of respondents believed that some, just a few or none of their EV customers would have chosen an EV without the consumer rebate.
To further motivate automobile sales staff to make an extra effort to sell EVs, the CSE report explores the idea of splitting a dealer incentive between the dealership and the salesperson responsible for the sale, with $250 for each.
Williams will present further findings from the CHEAPR dealership survey at the Behavior, Energy & Climate Change (BECC) Conference at the Hyatt Regency Sacramento on Tuesday, Oct. 17. The full report, Evaluating the Connecticut Dealer Incentive for Electric Vehicle Sales, is available online. Visit the CHEAPR program website for detailed information on customer rebates and dealer incentives.