Taxing rumor mill…

CongressSeveral sites are quoting an unnamed Republican and announcing that the Federal Income Tax Credit for plug-in vehicles will be retained in the “reconciliation” bill.

For those unfamiliar with how our legislative process works, here’s a quick intro:

  • Lobbyist proposes a change to current law or a new law
  • Trench-coat-garbed smoking men meet in darkened public parking garage to exchange money and verbatim text of proposed law.
  • Congressperson enters new law as a bill.

(just kidding…I hope…)

  • The Senate and House both propose bills, in this case a tax reform bill.
  • Both the House and Senate committees debate and pass (or fail to pass) the bill from committee.
  • The bill is heard by the respective chamber and the entire chamber votes on the bill.
  • If the bills pass both the House and the Senate, someone has to iron out any differences, so that a singular, unified bill goes to the President’s desk for signature. This is done by a “reconciliation committee,” that makes compromises needed to assure passage through both chambers.
  • Both chambers vote on the reconciled bill.
  • If the reconciled bill passes both chambers, the bill is sent to the President for signature, making the bill the law of the land, or veto.

The big news for the last several weeks, in the EV world, is the House of Representatives had a clause, in their version of the tax reform bill, that eliminated the income tax credit, effective this December 31st. The Senate version kept the tax credit in place.

The first rumor I saw was that the reconciled bill contained the House’s wording, eliminating the tax credit.

Now, the latest rumor is exactly the opposite. Many sites are proclaiming the tax credit is saved.

My advice is unchanged: If you were considering the purchase or lease of a plug-in vehicle and the income tax credit was a major factor in the decision, do the following:

  • Do NOT trust. Verify. If there is no public announcement before January 1st, consider pulling the trigger on your acquisition instead of taking the risk of not getting the tax credit.
  • KEEP up the calls, emails, letters, tweets, Facebook posts, petitions, etc to your elected official up. Do NOT release the pressure, until we know the tax credit has been preserved!
  • Of course, if it is announced the tax credit is ending, I recommend taking advantage of it before year’s end. I wish I could do the same, but my current Volt lease doesn’t end until March 2019.
  • Of course, if both houses prematurely end the tax credit, vote against every single incumbent, regardless of party, in the next couple elections. Only then, will they remember who their bosses are and that they are in a subservient role.

November 2017 Sales Numbers

Beginning with this month, my charts will no longer include the Hyundai Ioniq Electric, as its sales have remained very low and there are other, more promising plug-in vehicles to track. In the charts, the Ioniq Electric has been replaced by Tesla’s Model 3. Admittedly, the Model 3 hasn’t fared much better… yet. However, the reservations placed make it a more important vehicle to track. As Tesla Motors continues to try to emerge from “production hell,” the story of their success or failure will be important, in the history of EVs. Ford Motor Company has announced the end of the C-Max Energi. Consequently, I will look for a suitable replacement. I’m leaning toward the Honda Clarity plug-in vehicle. However, since the Clarity has three different drivetrains (HFC, BEV, PHEV) I’m not sure if I’ll go with it. The sales figures aren’t broken up by drivetrain and I don’t want to muddy the plug-in waters with HFC sales numbers.

What vehicle would you suggest?

November 2017 plug-in vehicle sales were mostly up, over the previous month, with one exception: The BMW i3. I expect all plug-in sales to surge, at the end of each year, due to the nearness of the end of the year (and access to the income tax credit). The chart, shown below, shows my Volt and Bolt EV sales by month, over the last four years (December 2017 reflects three I have already sold this month but, of course, there will be many more to go, making the December orange bar much taller. Even without full December 2017 data, you can easily see the trend. There is an anomaly with March and April 2016 (yellow bars). That spike in sales was due to the introduction of the 2017 Volt. The 2016 Volt was not sold in Texas. The July/August 2017 spikes (orange bars) were fueled by the arrival of the Bolt EV in Texas and the factory orders, that had been placed by customers, in advance of those months. However, an obvious bias in plug-in sales, toward the end of the year, can clearly be seen. In November of 2016, I sold two Volts. Last month, I sold 10 plug-in vehicles (1 Volt, 9 Bolt EVs). In December of 2016, I sold 8 Volts. In the first two days of this month, I have already sold three plug-ins (1 Volt, 2 Bolt EVs). The only thing that can keep this month from blowing away all my previous plug-in sales results would be the very real possibility of running out of inventory! As it is, December in car sales is akin to trying to drink from a fire hose. This December, I’m going to have to get better at setting up appointments to maximize my availability to my customers.Plug-in Sales by WeekThis year, there will be additional buying urgency, caused by what happened two nights ago. The Senate passed their version of the Republican tax reform bill. As I posted earlier, the House version of this bill includes the termination of the Federal Income Tax Credit for plug-in vehicles, effective December 31st. The Senate version, the last time I checked, kept the tax credit in effect. Now, the two versions will be reconciled, behind closed doors, in conference committee. There is still a little time to a) get a plug-in vehicle, before the tax credit possibly goes away and b) contact your elected representatives to voice your opinion on this issue, or 3) sign a petition.EV Sales Numbers

Once again, I am going to point out the beginning of the adoption curves. The curve taking off the fastest is the Chevy Bolt EV. Its first twelve months of sales have have grown more rapidly than even the original Toyota Prius. If that curve can continue, transportation will fundamentally change much faster than I’ve been anticipating. The dark almost horizontal line, stretching from the first month to the fifth, is the Tesla Model 3. For an EV with 400K reservations and the majority of press coverage for two years, these two curves really show how Tesla is struggling with the Model 3 launch and the mass production strength of General Motors.Adoption curves

Here are the November 2017 sales figures, compared to the previous month:

  • Chevy Volt: UP 25% (1,702 vs.1,362)
  • Chevy Bolt EV: UP 7% (2,987 vs. 2,781)
  • Nissan Leaf: DOWN 18% (175 vs. 213) **new model announced
  • Plug-in Toyota Prius: UP 13% (1,834 vs. 1,626)
  • Tesla Model S: UP 19% (1,335 vs. 1,120) **estimated
  • Tesla Model X: UP 121% (1,875 vs. 850) **estimated
  • BMW i3: DOWN 59% (283 vs. 686)
  • Ford Fusion Energi: DOWN 1% (731 vs. 741)
  • Ford C-Max Energy: DOWN 8% (523 vs. 569) **end of model announced
  • Tesla Model 3: UP 138% (345 vs. 145)

In November, the average price of gasoline was $2.54 per gallon and started out around $2.53 per gallon, rising steadily until 8th. It peaked on the 18th at $2.57. After the 18th, prices steadily declined through the end of the month, bottoming out under $2.49.

My November sales have been pretty lackluster over the years I’be been selling cars. That is, until this year! This November my sales were over 3X my best November (2014) and 4X my average November. This is due to spiking Bolt EV sales. Without the ten Volt & Bolt EV sales last month, it would still have been my best November, but only by one unit sold.My Sales By WeekMy sixteen November sales were comprised of nine Bolt EVs, two Sparks (equalling my best total year of Spark sales!), one Silverado, one Colorado, one Tahoe, one Cruze and one Volt. Bolt EV is still the hot vehicle. Volt lost a little ground to pickups, and my total Bolt EV sales, over 5 months, is already 42% of my lifetime Volt sales. By vehicle type, my sales are 25% plug-ins, 21% SUVs, 19% pickups, 16% sports cars. The rest are sedans & vans (19%).Vehicle Sales By Model

Plug-in sales, compared to the same month a year ago, were mostly down, with two models showing an increase.

  • Chevy Volt: DOWN 33% (1,702 vs. 2,531) **the Bolt EV effect!
  • Chevy Bolt EV: (was not available in November 2016**new model announced
  • Nissan Leaf: DOWN 88% (175 vs. 1,457) **new model announced
  • Plug-in Toyota Prius: UP 135% (1,834 vs. 781)
  • Tesla Model S: DOWN 5% (1,335 vs. 1,400)
  • Tesla Model X: UP 108% (1,875 VS. 900)
  • BMW i3: DOWN 55% (283 vs. 629)
  • Ford Fusion Energi: DOWN 60% (731 vs. 1,817)
  • Ford C-Max Energi: DOWN 28% (523 vs. 721)
  • Tesla Model 3: (was not available in November 2016)

October 2017 Sales Numbers and a 38 Year Journey Ends

October 2017 plug-in vehicle sales were mostly down, over the previous month, with two exceptions: The Chevy Bolt EV and the BMW i3.

The total sales for the year, of the vehicles I track, have several bunched around one another. The Volt, Prius Prime*, Model X and Bolt EV are all within a variation of only 6%. If the Bolt EV is removed from that group, the variation drops to only 4%. These vehicles (not including Bolt EV) sell at an average rate of 1,614 units to 1,674 units, per month. The Bolt EV, although not available in all states until July of this year, averaged 1,708 units per month. The big showdown, between the Tesla Model 3 and Bolt EV, has failed to materialize, due to Tesla’s production challenges. In its first four months of availability, only 367 Model 3s have been sold. In the same four months, Chevy cranked out 9,491 Bolt EV sales. I have had three Bolt EV customers tell me they had considered a Tesla (including a Model X) before selecting the Bolt EV, due to its bang for the buck. If the rumored end of the Federal Income Tax Credit for plug-in vehicles comes to fruition, Tesla may see a stampede away from the Model 3, in order for buyers to get an electric vehicle before the $7,500 tax credit ends.

*(includes the previous model, the Plug-in Prius)
EV Sales Numbers

 

Here are the October 2017 sales figures, compared to the previous month:

  • Chevy Volt: Down 6% (1,362 vs. 1,453)
  • Chevy Bolt EV: UP 6% (2,781 vs. 2,632)
  • Nissan Leaf: DOWN 80% (213 vs. 1,055) **new model announced
  • Plug-in Toyota Prius: DOWN 14% (1,626 vs. 1,899)
  • Tesla Model S: DOWN 77% (1,120 VS. 4,860) **estimated
  • Tesla Model X: DOWN 73% (850 VS. 3,120) **estimated
  • BMW i3: UP 28% (686 VS. 538)
  • Ford Fusion Energi: DOWN 3% (741 VS. 763)
  • Ford C-Max Energy: DOWN 17% (569 VS. 683)
  • Hyundai Ioniq Electric: DOWN 22% (28 VS. 36) what’s going on here???

In October, the average price of gasoline was $2.47 per gallon and started out around $2.54 per gallon, dropping precipitously until bottoming out on the 22nd. After the 22nd, prices staggered higher, ending around $2.48.

With the exception of 2016, October has been a pretty good month for my sales. This October my sales were about the same as they were in October 2014 & 2015.My Sales By WeekMy ten October sales were comprised of four Bolt EVs, two Silverados, one Equinox, one Cruze, one Traverse, and one Volt. Bolt EV is still the hot vehicle. Volt lost a little ground to pickups, and the Bolt EV is gaining quickly on Volt. I am definitely seeing much more customer interest in the Bolt EV than I am in the Volt. In fact, Bolt EV is my #1 selling vehicle for 2017, even though we didn’t have any to sell, until the very last day of June! My top two vehicles in 2017 are Bolt EV (21 units) and Volt (17 units).

Vehicle Sales By Model

During lunch the other day, I got a call from a reporter from Wards Automotive and we discussed that dynamic. This October tied for my best October, so I should not complain, but I missed a GM target by only one vehicle. It is so frustrating for me when that happens! I had two appointments on Halloween that should have resulted in goal attainment, but one was a no-show and the other decided to keep the vehicle I sold them two years ago.

Plug-in sales, compared to the same month a year ago, were mixed, with two models suffering from new vehicles/models from the same manufacturer.

  • Chevy Volt: DOWN 38% (1,362 vs. 2,191) **the Bolt EV effect?
  • Chevy Bolt EV: (was not available in October 2016**new model announced
  • Nissan Leaf: DOWN 85% (213 vs. 1,412)
  • Plug-in Toyota Prius: DOES NOT COMPUTE! (1,626 vs. 0) **previous generation Prius plug-in, dying out last October
  • Tesla Model S: UP 21% (1,120 VS. 925)
  • Tesla Model X: UP 17% (850 VS. 725)
  • BMW i3: UP 55% (686 vs. 442)
  • Ford Fusion Energi: DOWN 46% (741 vs. 1,372)
  • Ford C-Max Energi: UNCHANGED (569 vs. 571)
  • Hyundai Ioniq Electric: (was not available in October 2016)

This week (November 1st through 7th) is a statistically odd week for my sales. In four years of selling cars, I have never sold a vehicle, during that week. Next month, I’ll let you know if I bucked that trend…

Finally, a story 38 years in the making: The Houston Astros finally won the World Series and are the champions. Baseball is the only sport I watch regularly and I grew up in Houston. I was in college, in 1979, when my father-in-law, Dwight Maney, Sr. started taking his sons and me to baseball games, in the Astrodome. That year, they came within 1-1/2 games of winning the NL West. I suffered through the extra-inning Game 5 defeat to the Phillies, in the NLCS, the following season, but was hooked for life.

I was in the Astrodome, when Nolan Ryan got his 4,000th strikeout and was in Rangers Stadium, when he got his 5,000th. I moved away from Houston, in 1986, when oil prices and real estate values collapsed, sending my hometown (and my career) into a downward spiral for a few years. I watched the 1986 NLCS on TV, in Arlington, Texas and was on my knees, screaming, when Kevin Bass struck out, in the 16th inning of Game 6, losing to the Mets.

Due to proximity, I became a Texas Rangers fan and slowly started loving the Rangers, but always had a soft spot for the Astros. In 1987, Nolan Ryan became a Ranger and it just seemed appropos. The only time I would root against the ‘Stros, were when they faced the Rangers. It was an adjustment, watching baseball outdoors. Having watched every game, previous to my move to Arlington, in the Astrodome, made me think of baseball as an indoor sport.

AstrosIn 2005, I took my youngest daughter, Zoe (6 years old at the time) to her first NLCS in Houston’s new stadium and they won. We were screaming after the game and with Zoe perched on my shoulders, a Houston TV station, which was shooting footage of the celebrating fans, captured the moment. The two of us drove the 4-1/2 hours back to DFW that night and heard the next morning that the footage of us celebrating had made the morning news. Zoe has been to many Rangers games since.

Zoe & Me 2005 NLCS

Zoe & me at 2005 NLCS. (that’s the jersey I wore this week, watching the World Series on TV)

Having won the NLCS, the Astros were on their way to the World Series, facing the Chicago White Sox. My youngest brother, Curt had gotten tickets for us, two for him and his wife to Game 4, and two for Bonnie and me to Game 5.

The Astros were swept in four straight games. My ticket was never used and I have it to this day.

Perhaps now, you can understand why I am writing about this on My Electric Vehicle Journey… GO ASTROS!!!!

Champs at last

I waited a long, long time to see this.

Dark clouds on the horizon.

IRS logoAccording to an article posted by Green Car Reports today, the Federal Income Tax Credit for plug-in vehicles may be in danger of being eliminated prematurely. Based on the picks that have been made to head up departments like the EPA, Department of Energy, etc, this could be a very real threat.

There are two courses of action:

  • If you’ve been considering a plug-in vehicle, you may want to purchase or lease one before the end 2017.
  • If you’re opposed to this action, contact your elected representative and make your voice heard!

Bolt EV’s effect on Volt sales

Bolt EV vs. VoltThis is not good news for fans of the Chevy Volt. My Volt sales have dropped 60%, since the introduction of the Bolt EV. Here’s how it looks:
 
3-1/2 months before Bolt EV arrived:
  • Volt sales: 10 units
3-1/2 months after Bolt EV arrived:
  • Volt sales: 4 units
  • Bolt EV sales: 20 units
Some of this was pent up demand for the Bolt EV, which didn’t arrive in Texas until seven months, after it’s debut in California and Oregon. However, two of the Volts I sold were due to customers, who wanted the Bolt EV, switching to Volt because they found the seats uncomfortable in the Bolt EV. If not for that, the score would have been 22 to 2!
 
My last 5 Volt orders (for inventory) were scheduled to be built the week of 11/6/2017. The build dates just changed on these to 1/15/2018.
 
Ultimately, consumers will decide the fate of the Volt. It’s starting to look like people are MUCH more interested in going fully electric and waiting for infrastructure to get built instead of going with the Volt, which doesn’t need infrastructure build-out.

September 2017 Sales Numbers, an anniversary and a goodbye

September 2017 plug-in vehicle sales were mostly up, over the previous month.

For the last two years, September has been a pretty average month for me. This September was not as good as the two previous Septembers, but didn’t miss the previous one by much.

EV Sales NumbersOne other graphic, which I’ve shown before, is a zoomed in look at adoption rates (see below). The Bolt EV and plug-in Prius are the only vehicles I track that have seen a greater adoption rate than the original Prius. The plug-in Prius outpaced its ancestor for its first 15 months of availability, but did not keep up that pace and faded away over time. Now that the next generation Prius Prime has debuted, adoption rates have once again picked up. The Bolt EV, on the other hand has stayed above the original Prius adoption rate for 9 months, with only its debut in December 2016, when it was only available in California and Oregon, scoring lower than the Prius. The Bolt EV now enjoys a lead of 4,606 units after 10 months of availability. No other vehicle has ever had that much of an advantage, over the original Prius’ adoption rate. Second place falls to the plug-in Prius, which at its maximum had a lead of 2,471 units. The Model S had risen to a better adoption rate than the original Prius in its 40th month of availability, only to fall behind and stay there. The Model X, has stayed within striking distance of the Prius adoption rate, exceeding it in months 16, 17, 19 and 25 (last month). If the Model X’s first 3 months hadn’t been so low-volume, it may have produced a curve similar to the Bolt EV’s trajectory.

As the Plug-in Prius shows, the Bolt EV adoption may fizzle out, or it may be the next major turning point in automotive history, living up to the original Prius’ prominent spot.

Only time will tell.Starting Gate

Here are the September 2017 sales figures, compared to the previous month:

  • Chevy Volt: UP 1% (1,453 vs. 1,445)
  • Chevy Bolt EV: UP 25% (2,632 vs. 2,107)
  • Nissan Leaf: DOWN 9% (1,055 vs. 1,154)
  • Plug-in Toyota Prius: UP 4% (1,899 vs. 1,820)
  • Tesla Model S: UP 126% (4,860 vs. 2,150) **estimated
  • Tesla Model X: UP 98% (3,120 vs. 1,575) **estimated
  • BMW i3: UP 7% (538 vs. 504)
  • Ford Fusion Energi: UNCHANGED (763 vs. 762)
  • Ford C-Max Energy: DOWN 3% (683 vs. 705)
  • Hyundai Ioniq Electric: DOWN 45% (36 vs. 66)

In September, the average price of gasoline started out around $2.61 per gallon, rising steadily until the 7th. After the 7th, prices continued to fall, with a minor bump up around the 28th, ending the month at it’s lowest point, below $2.55.

My Sales By MonthMy Bolt EV sales have hit the following milestones:

  • After only three months, Bolt EV sales have now equalled or exceeded my four-year sales totals for nine other Chevy vehicles.
  • As a percentage of all vehicles I have sold, in my four years at Classic Chevrolet, plug-in vehicles (Volt & Bolt EV, at 24%) have exceeded the percentage of my sales that was SUVs (23%), Trucks (20%) and Corvettes (10%).
  • The last three months of Bolt EV sales are about one-fourth of my four year Volt sales.
  • For 2017, three months of my Bolt EV sales have exceeded my Volt sales for all nine months of 2017 so far.

Vehicle Sales By ModelMy September sales were comprised of three Bolt EVs, one Silverado, one Cruze, one Colorado, one Spark and one Volt. Bolt is still the vehicle of the moment. Volt pulled away from pickups, once again, but the Bolt EV is gaining quickly. I am definitely seeing much more customer interest in the Bolt EV than I am in the Volt.

Plug-in sales, compared to the same month a year ago, were mixed.

  • Chevy Volt: DOWN 28% (1,453 vs. 2,031)
  • Chevy Bolt EV: (was not available in September 2016)
  • Nissan Leaf: DOWN 20% (1,055 vs. 1,316)
  • Plug-in Toyota Prius: UP 47,375% (1,899 vs. 4) **previous generation Prius plug-in, dying out last September
  • Tesla Model S: UP 12% (4,860 vs. 4,350)
  • Tesla Model X: DOWN 2% (3,120 vs. 3,200)
  • BMW i3: UP 38% (538 vs. 391)
  • Ford Fusion Energi: DOWN 54% (763 vs. 1,652)
  • Ford C-Max Energi: DOWN 1% (683 vs. 689)
  • Hyundai Ioniq Electric: (was not available in September 2016)

My Business CardThe anniversary: Today marks the fourth anniversary of my becoming an EVangelist at Classic Chevrolet. It’s been a fun ride so far, with many changes made (and more to come, I’m sure).

Thanks to all who have helped me in this part of my journey.

Easy Tradin' DaleFinally, the retirement of a legendary salesperson: “Easy Trading” Dale Bryant. Dale’s desk was in a prime spot, in the main showroom, right next to the front doors. He had been in car sales for decades and was well known in that field. He taught me a lot about the business, when I first came on board, but what amazed me the most was his memory for his clients’ faces. A person would walk in and although Dale had not seen them for months (maybe even years) he would always say, “Hi, Mr. ______! How have you been?” He never seemed to draw a blank on a name! He had been at Chevy long enough that he knew all sorts of trivia on each well-established model. He was a wealth of knowledge and advice. I’ll miss him.

Have a wonderful retirement, Dale!

Tax planning

IRS logoAs we’re about to enter the final quarter of the year, thoughts turn to the holidays and then…tax season. This year and next planning is especially important. The three top producers of plug-in vehicles, that qualify for the full $7,500 Federal Income Tax Credit for all-electric and plug-in hybrid vehicles will probably hit their 200,000th unit sale in 2018. Depending on the modeling you employ, this could start happening as early as mid-year or closer to the end of 2018.

For the uninitiated, there is an income tax credit for those who buy (not lease) all-electric and plug-in hybrid vehicles. But not all vehicles get the same tax credit. The amount of the tax credit is determined by the size of the battery pack. Also, it is important to understand the difference between a tax deduction (like the deduction for having a child, property taxes paid or mortgage interest paid) and a tax credit.

A tax deduction is a deduction off your income, so if you have a deduction, with a value of $2,000, it reduces your taxes by the deduction multiplied by your tax rate. It’s a little more complicated than that, due to how tax brackets affect the calculations, but this example is close enough for horseshoes or hand grenades. If your tax bracket is 25%, the tax deduction of $2,000 only reduces the taxes you owe by $500 ($2,000 X 25%).

A tax credit actually reduces your income tax by the stated amount of the credit. So, in the example above we used a value of $2,000. A tax credit would of that amount would reduce your taxes by $2,000. Easy, peasy. There are some other considerations, so consult your tax preparer.

The plug-in vehicle income tax credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which the 200,000th of their plug-in vehicles has been sold. Qualifying vehicles from that manufacturer are eligible for 50 percent of the credit ($3,750) if purchased in the first two quarters of the phase-out period and 25 percent ($1,875) of the credit, if purchased in the third or fourth quarter of the phase-out period.  After that point, the credit goes away completely.

Who are the three manufacturers that will be affected first? They are Nissan ( maker of the Leaf), Tesla Motors (maker of the Roadster, Model S, Model X and Model 3) and General Motors, (maker of the Cadillac ELR & CT6, Chevy Volt, Bolt EV and Spark EV).

So, in planning your taxes, if you want to make a purchase in 2017 and collect the tax credit when you file in 2018, you need to be working on that purchase now. If you want to order exactly what you want, it’s too late for a Tesla, since their waiting list is so long. For the current GM models, you should place your order no later than October 15th, as it usually takes eight weeks from order to delivery (depending on dealer allocation). Unfortunately, I do not know what the order cycle is for the newly redesigned Nissan Leaf.

If you want to make a purchase in 2018 and collect the tax credit when you file in 2019, you need to keep an eye on how the manufacturers are each progressing toward the 200,000 vehicle limit. As of last month, it shaped up like this:

  • Tesla Motors – 138,469
  • Nissan – 113,263
  • General Motors (Cadillac and Chevrolet) – 149,649

The Tesla numbers were based on estimates. I will endeavor, over the next year, to keep an eye on this and post my findings here.