by Kristen E. Humphrey, MLA, Local Assistance and Training Planner
Even before the political unrest and war broke out in Ukraine, which some blame for an historic spike in global gasoline prices, more Americans have been making the shift from gas-powered internal combustion engines (or ICEs) to electric vehicles (EVs) than ever before.
According to the EV news and commentary website Electrek, which draws its data from the U.S. Department of Energy’s (DOE’s) Alternative Fuels Data Center (AFDC), there were 1,019,260 current EV registrations in the United States by December 31, 2021. While that number makes up less than two percent of the total number of vehicles in the U.S., According to a recent article in Car and Driver, EV sales shot up 60 percent in the first quarter of 2022 alone.
Concerned not just about prices at the pump but also in reducing the carbon footprint of motor vehicles and their attendant effects on climate change, the Montgomery County Department of Environmental Protection (MCDEP) and Department of Transportation (MCDOT) launched a new program designed to assist consumers in making the ICE to EV transition earlier this year. The Montgomery County EV Purchasing Co-op Pilot Program (EVPC) is the first of its kind in Maryland.
To learn more about the how the program works, who can participate, and the anticipated benefits, we spoke with MCDEP’s Senior Planning Specialist for Zero Emissions Vehicles, Brian Booher, who heads up the EVPC initiative.
What is Montgomery County’s EV Purchasing Co-op program all about?
The EVPC was formed to bring together residents who are ready to make their next vehicle an electric vehicle and, using the combined purchasing power of the group, to encourage local dealerships to offer discounts and incentives to members of the Co-op. We provide a variety of information on EVs and EV charging on our website.
The EVPC also serves as a platform for community engagement and education, helping to answer potential buyers’ questions and supporting events where they can experience and test-drive electric vehicles.
Montgomery County launched the pilot program in January 2022 as a combined initiative of the departments of Environmental Protection and Transportation. Our first step was to challenge county residents to pledge to make their next vehicle an EV. So far, more than 1,000 individuals have signed the pledge.
The program is open to anyone that is interested in signing the pledge – including those who live outside of the county. For now, however, we are only working with auto dealerships located within Montgomery County.
What were/are the perceived needs in the community and what are the goals and projected outcomes of this program? Have they changed/evolved since conception?
In 2021, Montgomery County developed a Climate Action Plan to meet its ambitious goals of reducing greenhouse gas emissions by 80 percent by 2027 and 100 percent by 2035. On-road transportation makes up about 36 percent of the County’s emissions, thus encouraging private residents and businesses to quickly adopt electric vehicles was one of several key actions identified in the plan.
One of the main challenges to increasing EV adoption by consumers is that EVs are currently more expensive than similar ICE models of cars and trucks. Some consumers can benefit from federal tax credits; however, that benefit is limited for buyers who may have lower incomes and, as a result, tax liabilities that are lower than the available credits. To help address that concern, one of the goals of the EVPC is to reduce the up-front cost of both new and used EVs and make them more affordable by working with local dealerships.
In the pilot-phase of the program, we engaged over 20 local dealerships and learned about their perspective and needs related to EVs. One important thing we learned is that the supply chain for all vehicles, and EVs in particular, is constrained and the demand for vehicles is outpacing the available supply. Because of this supply constraint, dealerships were not immediately able to offer discounts. However, our dealership partners remain eager to work with us and are open to the idea of offering discounts as supply issues diminish.
Are or have there been other similar programs in the U.S.? What are/were the outcomes?
The EVPC was inspired by similar “bulk” purchasing programs successfully implemented in other states and regions. A variety of program models have been implemented across the country, including traditional requests for proposals (RFPs), direct dealership negotiation, and promotions of periodic dealer incentives.
The common elements of EV purchasing co-op (sometimes called “group buy”) programs are: 1) discounted prices on EVs; 2) limited time offers; and 3) community-based outreach and marketing. Some programs also include dealership engagement and education to encourage dealerships to be more knowledgeable and enthusiastic about selling EVs, increasing the dealerships commitment to the product and by extension the overall sales of the product. For communities interested in starting their own purchasing co-ops, some examples of similar programs include:
- Drive Electric Northern Colorado EV Group Buy
- Northern Virginia LEAF Group Buy Program
- Drive Green Massachusetts and Rhode Island
- Smart Columbus Electrified Dealers
- Orlando OUC Electrified Dealers Program
- Climate Mayors EV Purchasing Collaborative
How has the market changed since EV co-ops began? How does Montgomery County’s program differ because of these changes?
The EVPC was successful in getting over 1,000 people to sign the pledge within just five months of its launch. Dealerships have recognized this interest and have continued to engage closely with the program. As the market begins to recover from COVID-induced supply constraints, some dealerships have indicated they are open to offering discounts. We are continuing to work with them to understand the state of their business and encourage them to offer co-op participants discounts in the future.
The recently enacted federal Inflation Reduction Act will introduce more changes to the market. Certain EV models that have been eligible for the $7,500 federal tax credit are no longer eligible as of August 16 because they are not manufactured in the US. On the other hand, manufacturers that had previously met EV sales caps that meant consumers were no longer able to receive the tax credit, will have the caps removed beginning January 1, 2023. This means that more makes and models will be eligible for the tax credit than have been, in some cases, for several years.
In addition, a $4,000 tax credit for used EVs will be available to buyers, also beginning January 1, 2023. Nobody knows yet what the long-term impact these changes will have, but it will certainly affect the EV market in the near term.
Who are the key partners involved in the program and what are their roles?
We are working with many highly engaged community partners that have been instrumental in getting the word out about the launch of the program. These groups are also participating in and promoting events organized by the county and invite county representatives to events they host.
Our community and non-profit partners include, the EV Ownership Association of Greater Washington (EVADC), Poolesville Green, One Montgomery Green, Washington Area New Auto Dealers Association (WANADA), Metropolitan Washington Council of Governments (MWCOG), Greater Washington Clean Cities Coalition (GWCCC), Bethesda Green, Montgomery County Green Bank, the Chesapeake Climate Network, the Town of Poolesville, MD, and the City of Rockville, MD.
We have 25 dealership locations in our Electrified Dealers program from seven (7) different ownership groups: Criswell, Darcars, Fitzgerald, Jim Coleman, Koons, Ourisman, and Sport.
What outreach efforts have you employed to get the needed participation and buy-in from partners/stakeholders?
We have relied on press coverage, email newsletters, and social media to get the word out. Communication originates from county channels as well as our partners. In-person events, like the recent Poolesville Drive Electric Day Event, are especially effective because people can see the vehicles in person and even sit and ride in them.
One key aspect of our outreach to dealership partners has been to provide training and educational materials to their sales staff. Sales people usually receive training directly from the auto manufacturers on the models they sell, but do not always receive training on electric vehicle technology, EV charging, and available incentives. As a local government partner, we can help their staff answer questions that county residents commonly have.
How long were plans for your program in the works, from initial concept until the present?
The county finalized its Climate Action Plan in April 2021, which included the development of an EV Group Buy program as a near term action item.
MCDEP and MCDOT worked with MWCOG to develop a request for proposal for this project beginning in the summer of 2021. A contractor – Electrification Coalition – was selected to complete the work in December 2021. The pilot program ran from January – May 2022. Since May, we have continued engaging with dealerships and the public to provide education and encourage more people to sign the pledge.
What is/has been the largest hurdle to overcome in this process?
The state of the vehicle market with high dealer mark-ups and limited supply is presently the biggest hurdle. Dealerships must feel that it is in their businesses’ best interest to offer a discount before they are willing to participate.
As county agencies, we also need to make sure that we avoid any potential ethical issues that could arise related to government promotion of private businesses and/or negotiating discounts for expensive consumer items. We are taking the time necessary to work with the Montgomery County Ethics Commission to develop processes and requirements for the administration of this program that avoid running afoul of the County Ethics Law.
What are the next steps? What type of related developments do you foresee the program might spur in the future? What roles will the primary stakeholders play?
We hope that before the end of the year we will be able to announce that at least one local dealership partner has a discount to offer participants in the EV Purchasing Co-op. At that time, we will get back to promoting the Co-op widely and working closely with our community and non-profit partners to get the word out.
We are also planning to continue to work with all our partners, including dealerships, to plan events where people can experience EVs first-hand.
What lessons learned would you share with other communities and stakeholders seeking to embark on a similar initiative?
Partners are everything! In particular, take time to understand the dealerships’ businesses and design your program with those needs in mind.
For more information about the Montgomery County Electric Vehicle Purchasing Co-op or electric vehicles or vehicle charging in general, please visit the EVPC website, or contact Brian Booher, Senior Planning Specialist for Zero Emissions Vehicles, at AskDEP@MontgomeryCountyMD.gov.
 MCDEP’s Climate Home Page posts the Climate Action Plan, annual reports, fact sheets, interactive infographics, a virtual information room, on a variety of climate and environmental topics, including interactive educational slides for children and educators.
 A paper entitled “Electric Vehicle Group Buy Programs: Handbook and Case Studies” from the Southwest Energy Efficiency Project (SWEEP) and the Colorado Energy Office discusses different co-op models in detail.