A report on EV group buying programs was recently developed by Matt Frommer, the Southwest Energy Efficiency Project’s Transportation Program Senior Associate, in partnership with the Colorado Energy Office and Refuel Colorado. He also had assistance from Will Toor and Mike Salisbury.
The report provides history, background, and other details for EV group buy programs in the US. For example, it says there have been over 40 programs in 20 states in the last several years. It also states that dealership sales have been boosted up to 10 times the monthly average by some EV group buy programs. Mr. Frommer answered some questions about group buying for CleanTechnica.
1. How many EVs have been sold in group buy programs so far?
At the end of 2017, the number was around 3,350 EVs. Sales numbers are broken out by program in the table referenced below. The Xcel Energy/Nissan Fleetail program from Summer of 2017 sold 849 Nissan LEAFs in 6 months, which was by the far the highest total of any program surveyed. Reference spreadsheet on page 59-60 – “Appendix B: List of all EV Discount programs from September, 2015 to May, 2018.”
2. How many group buy programs have been implemented so far?
Forty-two programs surveyed, many of which are recurring and on their 2nd or 3rd cycle.
3. How did the concept spread to different areas?
The first EV group buy programs were organized in Boulder County and Fort Collins, but the concept quickly spread to other parts of Colorado, Utah, and Oregon. The initial EV group buy programs in 2015 and 2016 demonstrated the proof of concept: that significant EV discounts combined with community-based marketing can result in substantial increases in EV sales. Following the early success of these programs, Nissan’s corporate office took an interest in EV group buy programs and began exploring ways to scale them up to the regional level. Reference: “Sections IV: How have Group Buy programs evolved over the last 3 years?” (page 7).
4. What have been the most popular EVs sold in this type of program so far?
The Nissan LEAF. In the context of EV group buy programs, Nissan is a clear standout. They were one of the first OEMs to manufacture and promote EVs with the all-electric Nissan LEAF in 2010. They’ve also invested in dealership EV sales training and are the only automaker in Colorado so far to take advantage of the assignability of the state EV tax credit, a provision that shifts the $5,000 purchasing incentive to the point of sale. Also unlike other automakers, Nissan North America was willing to contribute corporate dollars to vehicle discounts through the Nissan Fleetail program, which offered a $10,000 discounts off the Nissan LEAF at 15 different Colorado dealerships in 2017. To be clear, while it may have seemed to many customers that Xcel Energy contributed to the vehicle discount, 100% of the discount was funded by Nissan North America. Xcel was responsible for marketing and outreach only.
Collectively, EV discount programs reported participation from 12 different OEMs. However, Nissan has been the most active by far with participation in almost 100 percent of the programs. BMW, Chevy, and Ford dealerships have also been active with a 20 to 35 percent rate of participation. Reference: “Vendor Selection & Model Availability” (page 22).
5. What is about the average discount per vehicle in group buys?
There’s a wide range of vehicle discounts from $600 off the Chevy Bolt through CLEER’s 2017 program in western Colorado to a $12,000 discount off the BMW i3 through UC-San Diego’s 2017 program. I don’t have a total average, but the average Nissan LEAF discount across all group buy programs is around $6,800. When combined with the various state EV tax credits and federal credits, the average total discount was 55% of a new Nissan LEAF. Reference: How much are EV discounts? (page 24).
6. Has Tesla participated in a group buy, and if so, where?
No, Tesla has not participated and personally, I don’t expect them to for a few reasons: first, EV group buy programs are designed to spark EV demand and at the moment, Tesla doesn’t seem to have a problem with that. In fact, their main challenge with the Model 3 has been production capacity.
Tesla has replaced the traditional dealership model with the direct-to-consumer business model, so if they did participate, the discount would have to come from the corporate office instead of the dealership.
One of the major benefits of group buy programs is the EV education and awareness for car dealers, many of whom do not have the training or incentives in place to sell an EV. The Tesla car salesmen know how to sell EVs because that’s all they do.
7. How much more popular could group EV buys become?
Great question. Since writing that report, I’ve received inquiries from several communities around the country who are interested in launching a group buy program in some shape or form. Some are interested in the traditional RFP model and others want to set up a larger “rolling” group buy program like the Drive Green program in Massachusetts and Rhode Island. But the vast majority of new programs are using the OEM-Utility model. I anticipate that utilities will assume a greater role in the EV outreach and education efforts as they expand their EV programs and continue to invest in charging infrastructure. This might include additional partnerships with automakers and dealerships inside their service territories.
8. Have they been publicized enough?
No. I think the marketing and outreach campaigns could be much stronger. The main reason that the Boulder County, Fort Collins, and early Utah programs were so successful is because the program outreach was community-driven. In my opinion, utilities do not have the dealership connections, networks, and local community partners to educate potential buyers on the benefits of EVs. However, they are getting better with this. Reference: bottom of page 34-37 – “The most successful programs establish a broad coalition of trusted community partners to collaborate on marketing and outreach efforts.”
9. Are they associated with particular organizations like EV enthusiast groups or associations?
The early programs were organized by local governments and/or nonprofits. A quick breakdown of lead agencies:
10. When people buy in groups do they have group events that precede the buys, like user/buyer education?
Yes, and this is a common element of the most successful group buy programs.
11. In what areas have the buyer programs been implemented the most?
Most of the community-driven group buy programs have been in CO, UT, and OR, but the OEM-utility programs have spread across the country.
Image by Zach Shahan, CleanTechnica
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