Vermont dealers warn Advanced Clean Car/Truck rules risk shrinking local inventory, shifting sales out of state

Matt Coda, a Meadow Hill consultant representing the Vermont Vehicle and Automotive Distributors Association, told a legislative transportation committee Thursday that Vermont dealers support electric vehicles but are concerned the Advanced Clean Car and Advanced Clean Truck rules will squeeze local dealerships.

"We are all in on EVs. We have invested millions of dollars on EV infrastructure," Coda said. "They are not coming to our dealerships in the speed of which the regulation requires, and they are not being demanded by the consumers in the speed of which the regulation requires."

Coda told committee members the complaint has multiple parts: a high share of leases for new EVs, consumer demand concentrated in certain models, and manufacturer compliance options that could reduce the supply of gasoline vehicles in smaller markets. He said about 40,000–43,000 new vehicles are registered in Vermont annually and that a large share of sales are trucks and sport-utility vehicles rather than small cars. He added that roughly 63% of vehicles sold and later registered in Vermont have been used vehicles.

The regulation gives manufacturers three broad compliance paths, Coda explained: supply more electric vehicles, reduce the number of gasoline models shipped to Vermont (lowering the denominator), or purchase credits/pay fees. "The manufacturers see it as three ways: send us EVs, send us fewer gas cars, or write a check," he said. He told the committee that manufacturers — not dealers — negotiate which models are shipped to each dealer and that dealers take ownership of vehicles when delivered, exposing them to financing costs if cars do not move quickly.

Dealers testified that short-term lease promotions in 2024 helped EV sales but could create a later surge of used EVs or price shocks when those leases end. Coda said manufacturers and leasing arms offered aggressive short leases — 18 to 36 months — that lowered monthly payments but that many of those leases will roll off in the next two years. "What happens to them at that time? I couldn't tell you," he said.

Committee members and witnesses flagged enforcement and compliance questions. Coda said the Agency of Natural Resources publishes manufacturer performance data under the rule, and that model-year 2026 is the first compliance year. He noted the franchise laws that protect dealers do not shield manufacturers from following Vermont law, and said "lawyers are going to sort this out." He and other witnesses said manufacturers could decide to allocate fewer gasoline trucks to Vermont dealers, or to meet standards by buying credits, with unclear downstream effects on local inventories and consumer choice.

Speakers raised infrastructure and heavy-duty vehicle concerns. Andrea Cohen of Vermont Electric Co-op (testimony summarized by Coda) presented survey data showing lower consumer interest in EVs in some territory populations, which Coda said could complicate meeting state greenhouse-gas goals. Denise Alosa of New England Kenworth and other truck sellers said the commercial-truck market lacks practical electric alternatives today for many work vehicles and that charging and equipment needs differ from passenger-car charging.

Coda urged coordination among states that adopt California standards and recommended legislative conversations about how credits, fees and enforcement will operate. "We would like to know... how many credits they buy from Mr. Musk versus how many fees or fines they pay," he said, describing the uncertainty dealers face as they approach model-year 2026.

The discussion included examples of dealers who have invested heavily in EV readiness: Coda said one local dealer invested about $1.5 million in charging infrastructure. Witnesses also described the risk that consumers could purchase desirable gasoline vehicles across state lines and register them in Vermont, preserving their own choices while shifting sales tax and registration revenue out of state.

The meeting did not record a formal vote or committee decision on the rule; testimony was presented for informational purposes and to inform possible future legislative action.

Ending

Committee members asked staff and witnesses to provide additional materials, including data on model-year shipments, the share of leases returned to manufacturers, and comparisons with other states; witnesses said they planned to supply follow-up information to the committee.