What the EPA’s Stricter Emissions Proposal Means

The Environmental Protection Agency announced two major rules in April that impact the adoption of Zero Emission Vehicles (ZEVs).

About River Bridge Regional Center

River Bridge Regional Center is a nationally accredited nonprofit child advocacy center, utilizing a childcentered, multidisciplinary approach to the prevention, assessment, treatment, and investigation of child abuse. River Bridge has served 2,831 children and 2,169 caregivers since opening in 2008.

ABOUT SUBARU OF AMERICA (SOA)

Headquartered in a zero-landfill office in Camden, N.J., the company markets and distributes Subaru vehicles, parts, and accessories through a network of more than 630 retailers across the United States. SOA is guided by the Subaru Love Promise, which is the company’s vision to show love and respect to everyone, and to support its communities and customers nationwide. As a company, Subaru believes it is important to do its part in making a positive impact in the world because it is the right thing to do.

About Phil Long Glenwood Springs Subaru

Phil Long Glenwood Springs Subaru is a community-driven, award-winning, and successful new and pre-owned vehicle and full-service dealership located in Glenwood Springs. In June, 2021, Phil Long Glenwood Spring Subaru became the 18th dealership of Phil Long Dealerships and its second location in Western Colorado.

Phil Long Glenwood Springs Subaru is located at 175 Storm King Road in West Glenwood Springs, CO, a convenient drive from Rifle, Carbondale, Eagle and Aspen. Showroom hours are Monday through Friday, 8am – 6pm, and Saturdays, 8am – 5pm. For more information, call 970.945.7447, follow us on Facebook or visit phillongsubaru.com to view our online inventory.

Phase III of the greenhouse gas regulation mandates stringent emissions guidelines for trucks and buses in the 2027-2032 model years.

New emissions standards for light and medium duty vehicles, requiring that 67% of new sales must be zero emissions by 2022. This will have a significant impact on dealers.

Perhaps this seems like a non-story because the state of Colorado will adopt the second iteration of California’s Clear Car Rule (ZEV II) this summer, which theoretically will place us on a trajectory to hit 80% ZEV market penetration by 2032. What’s our concern about increasing the federal standard when Colorado’s is more stringent? Four potential issues come to mind:

The Colorado regulation likely faces some legitimate legal concerns and federal pre-emption challenges that could result in the state regulation being overturned in court and forcing Colorado to adopt the federal standards.

The federal government and California have battled over which one takes precedence on mobile source emissions for almost two decades. It’s revealing that when a National Highway Traffic and Safety Administration (NHSTA) bureaucrat left for the California Air Resources Board, he commented to the media that he considered the two bodies to be co-equals. The federal government wants to establish its pre-eminence by closing the gap between the two entities’ regulations.

Equally important is how much federal regulation moves the market. A handful of OEMs have had a handshake agreement with California to move to electric earlier than required. The federal rule validates that agreement and disadvantages those manufacturers who did not participate, many of whom were holding out to lead the charge on non-electric zero emission technologies. Finally, these requirements are on vehicles “offered for sale,” but not necessarily sold. So, if manufacturers aren’t able to produce enough ZEVs because of critical mineral shortages and supply chain issues, for example, the easiest way to meet the 67% threshold is to cut back on the overall supply of vehicles for sale. That could lead to long-term inventory challenges for both dealers and manufacturers.

Vehicle pricing would become a very unfortunate victim of these poorly considered jolts to supply and demand. As interest rates are rising and the average new car price approaches $50,000, it only exacerbates overall strain on the consumer market. NADA will emphasize this point when it submits comments to the EPA ahead of the rulemaking.

CADA also participates in the rulemaking through its membership in the American Highway Users Association, which intends to submit comments as well, based on feedback from its membership.

We will keep you updated on the progress of this rule. We are well represented, which is important because the rule’s immediate impact will be felt for years to come.

IRS Fumbles EV Tax Credit Guidance

CADA has released dealer memos in the last several months detailing the evolution of the EV Tax Credit established in the 2022 Inflation Reduction Act (IRA). It seemed that once the ‘new credit’ began on January 1, 2023, that we’d found steady footing, but new IRS guidance effective April 18, 2023 is creating chaos, instead.

The tax credit applying to the purchase of new electric vehicles – the IRA’s Section 30(D) – is the issue, since leases and used credits are defined separately. As originally understood, the 30(D) credit would amount to $7,500 for every qualifying vehicle. That is no longer correct.

Full Credit ($7500)

The new rule for qualifying for the federal tax credit is based on the battery and critical mineral requirements, which will depend on where the component minerals are sourced. These changes are based merely on the IRS’s interpretation of the IRA rather than any subsequent legislation. Nevertheless, the impact is the same.

The credit essentially has two parts: Vehicle owners will receive $3,750 if the minerals in the vehicle are sourced from approved countries, and received an additional $3,750 if the materials in the battery are as well.

The regulation cuts down qualifying EV models from 41 to 22, and only 14 remain eligible for the full $7,500 tax credit. The remaining eight models are eligible for just half - $3,750. NADA points out that many of these newly disqualified models will still qualify for a tax credit under Section 45(w) if they are leased instead of purchased.

Here is a list of the vehicles qualifying for the full or partial tax credit (all are 2023 models unless noted).

Real-Time Insights for Sales Success: Effectv’s Partnership with AUTOFLYTE EDGE Keeps You Ahead of Emerging Trends

Chrysler Pacifica Plug-In Hybrid Jeep Wrangler Plug-In Hybrid Audi Q5 TFSI e Quattro Plug-In Hybrid

Ford F-150 Lightning Grand Cherokee Plug-In Hybrid BMW 330e Plug-In Hybrid

Lincoln Aviator Grand Touring Ford E-Transit BMW X5 xDrive45e Plug-In Hybrid

Chevy Bolt and Bolt EUV Ford Mustang Mach-E Genesis GV70

Cadillac Lyriq Ford Escape Plug-In Hybrid Nissan Leaf

2024 Chevy Silverado Lincoln Corsair Grand Touring Rivian R1S

2024 Chevy Blazer Tesla Model 3 (Standard Range, Rear Wheel) Rivian R1T

2024 Chevy Equinox VW ID4

Tesla Model 3 Volvo S60

Tesla Model Y

You know your sales numbers as of right now, but do you know your competitors? Do you know where they are gaining share? Or which models/segments are trending in your target geography today? Do you know where other OEMs are selling or where it’s best to conquest specific models?

Effectv ’s partnership with AUTOFLYTE EDGE allows dealers to respond to emerging trends in real time. Capitalize on opportunity with insights that allow you to pinpoint exactly where your sales opportunities are by model, geography, and competitor while there is still time to affect this month’s sales outcome.

Effectv uses these valuable insights to better understand the current market trends. Third-party partnerships, combined with first-party aggregated Comcast viewership data, allow Effectv to develop strategies to deploy smart video campaigns that are designed to reach the right target audience in the right geography, helping you achieve your sales goals.

Effectv wants to ensure advertisers get the most impactful results, so our investment in their success doesn’t stop once the campaign begins. We continually evaluate the products and schedules being used, as well as look at reporting tools to determine what optimization should be employed to generate the greatest return on investment. Effectv can help drive more website and foot traffic for Colorado dealerships.

Need creative? We’ve got you covered! Effectv’s awardwinning creative agency, Mnemonic, can help brands deliver impactful messaging that resonates with car and truck buyers. Watch samples of some of their work. Visit our website to learn more or contact Kristen Lucero, Effectv’s Automotive Sales Manager in Colorado, to set up a meeting to review your sales, gain competitive insights, and develop a high impact video strategy for your dealership:kristen_lucero@comcast.com, 303-603-0751.