Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Electric Vehicles Acc2 topic
No spam. Unsubscribe anytime.
Dealers, leases and ACC2: committee hears industry concerns about EV mandates and compliance pathways
Summary
Witnesses and committee members discussed Vermont’s Advanced Clean Car II implementation, high EV leasing rates, manufacturer compliance options, potential compliance fees and risks to local dealers and used‑car markets.
Industry witness Matt Coda told the Vermont House Transportation Committee on March 13 that the ongoing shift to electric vehicles (EVs) is being driven in part by attractive manufacturer lease offers and that Vermont faces difficult compliance choices under the Vermont Advanced Clean Cars 2 (ACC2) regulation.
Coda told the committee that, in January and February data he reviewed, 71% of EV transactions were leases compared with a lower lease share for non‑EVs. He warned that leases concentrate the risk of future used‑vehicle flows: “When those cars come in on trade, they are not resold at the local dealers. They are sold at auction,” he said, describing how a surge of returned leased EVs could depress used‑EV prices if many leases expire in the same period.
Coda described four compliance pathways manufacturers face under ACC2: deliver the required percentage of battery electric vehicles to Vermont; lower the denominator by selling fewer internal combustion vehicles into the market; purchase credits from over‑compliant manufacturers (a market for credits); or pay fees for noncompliance. He told the committee that the current statutory or regulatory language allows fees “up to $20,000 per vehicle” as a backstop, a figure he described as impractical for market stability. Coda suggested that a predictable, substantially lower flat fee agreed among CARB (California Air Resources Board) states would create market certainty and could even produce revenue to support state EV incentives.
Committee members pressed on scale and timing. Coda said Vermont typically registers about 40,000 new vehicles per year and that to meet a 35% delivery target in a single year the state would need roughly 14,000 new EV registrations — a multiple of current EV sales levels. Members and witnesses discussed practical barriers to adoption, including the large share of people without garage access, range and winter‑weather impacts, charging infrastructure shortfalls, and higher upfront costs for heavy‑duty trucks.
Several representatives raised concerns about local dealers’ exposure: dealers finance vehicles on lot, pay interest on floor plans, and could be stuck with inventory they cannot sell if manufacturers ship a high share of EVs that local customers do not buy. Members asked whether a manufacturer‑level fee or coordinated fee among CARB states could be set to a known amount (for example, $500 per vehicle was discussed hypothetically) to provide certainty and fund incentives; Coda said such approaches could be helpful but emphasized he did not represent manufacturers and could not bind them.
Committee members also discussed legal pathways at the federal level: repealing the statutory Clean Air Act waiver that allows California standards, a Congressional Review Act (CRA) challenge at EPA, or federal legislation—each with serious legal and political obstacles. Witnesses and members said those federal paths are uncertain and could take extended legal review.
No formal votes occurred. Committee members asked staff to continue tracking registration trends, the composition of leases (term lengths), potential flows of returned vehicles, and to follow up on whether neighboring CARB states could agree on a predictable compliance fee as a mitigation tool.
