As Virginia EV sales slowly climb, auto dealers still haven’t given up on rebates

The fight over incentives isn’t over

By: - August 17, 2021 12:01 am

An electric vehicle charges at a public station in Henrico County, July 2020. (Sarah Vogelsong/Virginia Mercury)

Don Hall has put his money on electric: specifically, the Volkswagen ID.4, which he bought this summer. 

The president and CEO of the Virginia Automobile Dealers Association sparked surprise this winter when he threw his influential organization’s support behind a law that aims to move Virginia drivers away from the internal combustion engine toward cars powered by electricity. 

Initially wary of the proposal to embrace California emissions standards, Hall became one of its most enthusiastic cheerleaders at the 2021 General Assembly. “We shall go forward and sell EVs in the future,” he declared to lawmakers during one hearing. 

The Democrat-led legislature this winter pushed through a package of laws intended to do that. A “clean cars” bill pledged to adopt California vehicle emissions standards and electric car sales targets. Another measure established a rebate program to cut down on the high sticker price of the vehicles, although lawmakers left it unfunded amid questions about the tool’s effectiveness. 

In Virginia, EV sales are growing. According to numbers from the Virginia Department of Motor Vehicles, electric vehicle registrations grew by 44 percent between June 30, 2020, and June 30 of this year. Hybrid registrations over the same period went up by 12 percent. 

Still, they remain a fraction of the state’s more than 6.8 million passenger vehicle and light-duty truck registrations. And Virginia’s increases are far below the more than 200 percent rise in electric vehicle sales that auto services firm Cox Automotive, owner of Kelley Blue Book, found occurred nationwide between the second quarters of 2020 and 2021. 

“The U.S. auto market has seen growth this year in nearly every segment, but no segment is growing more quickly and more relentlessly than electrified vehicles,” Cox reported last month.

Nationwide, “the uptick is certainly there, but we have not really experienced it in Virginia,” said Hall.

Charging infrastructure

For state policymakers aiming to spur greater adoption of electric vehicles, many of the same challenges that existed a decade ago remain today.

“Since EVs began to hit the market, surveys have repeatedly identified barriers to consumer purchase of these vehicles,” the Virginia Transportation Electric Vehicle Readiness Study completed this January for the Office of Transportation Research and Innovation found. “Over time, the perceived barriers remain consistent despite progress to address them.” 

Charging infrastructure is one example. “Despite the number of available EV charging stations more than tripling” in the U.S. between 2012 and 2019, “EV infrastructure-related concerns remain as three of the top four barriers to EV adoption,” the study noted. 

In Virginia, availability of charging stations continues to cause problems. Fifty-nine percent of current EV owners called the difficulty of finding a charging station a very important concern. (The number rose to 81 percent among those considering an EV.) 

“That’s why it’s so important for us to have publicly accessible charging stations throughout the commonwealth,” said Chris Bast, deputy director of the Virginia Department of Environmental Quality. “Because when people see a charging station in their community, even if they’re not an EV driver, if they see it, they’re more likely to consider choosing an EV.” 

In Virginia, much of the state’s infrastructure push has been funded by the state’s “Dieselgate” allocation of $93 million that resulted from a settlement between the federal government and Volkswagen over allegations that the company deliberately evaded Clean Air Act emissions limits between 2009 and 2016. 

Of that settlement, $14 million has gone to a state partnership with EVGo that will install roughly 200 fast chargers around Virginia. Expected to ensure that 95 percent of Virginians live within 30 miles of a fast charger, the project is about 60 percent complete. 

“Our initial focus has been on building out the state’s public charging backbone that the private sector and utilities and other folks can add to and fill in the gaps,” said Bast. 

President Joseph Biden’s administration has been vocal in its support for EVs, setting a national goal that half of all passenger vehicles sold in the U.S. by 2030 be electric. A massive infrastructure deal passed by the U.S. Senate earlier this month would put $7.5 billion toward a national charging network, with “a particular focus on rural, disadvantaged and hard-to-reach communities,” as well as billions more toward bus electrification. 

“The sausage is still being made,” acknowledged Alleyn Harned, executive director of Virginia Clean Cities, the state chapter of a nationwide coalition sponsored by the U.S. Department of Energy to promote alternative fuel use. But, he added, “it would be incumbent on us to have competitive projects that are not just asking for federal money but are pushing forward collaborative partnerships.” 

Several Democratic state legislators say federal support is necessary to cut down transportation emissions given the scale of climate change. 

“We can do everything we can in the commonwealth of Virginia, but these issues don’t just stay within our borders,” said Del. Mark Keam, D-Fairfax, during a virtual event hosted by the Virginia League of Conservation Voters last week to call for national investments in EV infrastructure. “We need our federal government to step up.” 

In the meantime, said Bast, the state isn’t planning for federal funds “because you never know what’s going to happen. So we’ve been focused on executing the projects we have now and working on the clean cars regulation.”

Ongoing conflict over incentives 

For Virginia’s auto dealers and some environmental groups that see EVs as an effective immediate lever to reduce transportation emissions, infrastructure isn’t enough. Both point their finger at two state policies that they say are hampering adoption: a lack of funding for a state rebate program and an $88 highway user fee on vehicles that use “alternative” fuels.  

“Electric vehicles are likely to be more expensive than their traditional counterparts until at least 2027 for new vehicles,” said Harned. “So we’re currently in a phase where if we’d like EVs in Virginia, we should incentivize them.” 

Hall too has long argued that without incentives, demand is likely to lag, pointing to findings that electric car sales in New York surged 74 percent when the state established an electric car rebate and dropped 90 percent in Georgia when that state got rid of its incentive.

Hall was frustrated that the General Assembly did not commit money to the rebate program out of the $4.3 billion the state will receive under the American Rescue Plan Act. That budget, which was passed by the legislature in a special session in Richmond this August, largely adhered to a proposal laid out by Gov. Ralph Northam. 

“To say I was let down was an understatement. … I think they had a golden opportunity and they absolutely didn’t act on it,” Hall said. 

But Del. David Reid, D-Loudoun, the sponsor of the bill establishing the rebate program during the winter legislative session, said the omission was due to U.S. Treasury guidelines governing how the relief funds could be spent. 

“It was not for lack of trying,” he said. “It was just a recognition that it didn’t meet the acceptable use for what was coming from the federal government.” 

Alena Yarmosky, a spokesperson for Northam, said that the governor and Democratic leadership had been “intentional about prioritizing” federal funds “for areas directly impacted by the COVID-19 pandemic” and that “the governor will consider this and other important issues for inclusion in his upcoming budget this December.” 

Reid also said he had been involved in discussions with Northam and House Appropriations Chair Luke Torian, D-Prince William, about including rebate funding in the next budget, although “nothing definitive” had been decided. 

Other state commitments could be on the way. Marshall Herman, a spokesperson for the Virginia Department of Transportation, said the agency “is working to determine where electric vehicles can be incorporated into our own fleet” and where it could install charging infrastructure on state property. 

“Electrifying the state’s fleet is an important thing for us to do,” said Bast. “The administration is currently considering the best path forward.”

CORRECTION: This story has been corrected to reflect that the state partnership with EVGo will install roughly 200 fast chargers. To date, about 120 have been installed.

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Sarah Vogelsong
Sarah Vogelsong

Sarah is the Mercury's environment and energy reporter, covering everything from utility regulation to sea level rise. Originally from McLean, she has spent over a decade in journalism and academic publishing. She previously worked as a staff reporter for Chesapeake Bay Journal, the Progress-Index and the Caroline Progress, and her work has been twice honored by the Virginia Press Association as "Best in Show" for online writing. She was chosen for the 2020 cohort of the Columbia Energy Journalism Institute and is a graduate of the College of William and Mary. Contact her at [email protected]

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