While fighting clean car rules, Minnesota dealers gear up for an all-electric future
Tom Leonard, incoming chair of the Minnesota Automobile Dealers Association, charges a plug-in hybrid Jeep Grand Cherokee at Fury Motors in South St. Paul. Photo by Ken Paulman/Energy News Network.
Despite continuing a lawsuit over the state’s clean car standards, the Minnesota Automobile Dealers Association recently hired an electric vehicle program director.
The organization believes it is the first dealer association in the country to add a staff member assigned explicitly to electric vehicle issues. Its vice president of public affairs, Amber Backhaus, said the position developed over the past two years as demands by dealers for expertise and information on electric vehicles grew.
Backhaus said the dealer association does not agree with “supply side mandates,” but does not see that as contradictory to preparing for the market shift that is already well underway.
“Electric vehicles are the wave of the future and our dealers are excited to sell them, but there are a lot of things they need to do to prepare to be able to sell them,” she said. “We get a lot of questions from dealers and we thought it would make sense to bring somebody in-house who could put together those resources and answer their frequently asked questions.”
The association selected Steve Nesbit, a former executive who oversaw electric vehicles and renewable energy programs at an electric cooperative and worked at an auto dealership. Nesbit said he sees his role as helping dealers “support the sale of electric vehicles and keep their business model operating.”
Nesbit worked for Wright-Hennepin Cooperative Electric Association for 12 years, focusing on renewable energy and community solar for part of his time there. Before taking the association job, he worked for an energy technology company and an auto dealer.
The association has been a long-term member of Drive Electric Minnesota, an initiative of the Great Plains Institute. M. Moaz Uddin, a policy specialist at the institute, said the addition of Nesbit will help “bridge the gaps between dealerships and utilities” and make for a smoother transition to vehicle electrification.
While electric vehicles will play a crucial role in decarbonizing transportation, they will not be the only solution. Minnesota needs to continue efforts to create low-carbon fuels and communities where residents can walk or use transit, bicycles and other transportation modes instead of cars, Uddin said.
Fighting California rules
Nesbit starts his role as the association continues fighting the state’s clean cars standards in a case heard in November at the Minnesota Court of Appeals. Last year, Minnesota adopted the clean cars standards developed by the California Air Resources Board, a move requiring dealers to make more electric vehicles available starting in 2024. The Minnesota Pollution Control Agency oversees the new rule.
Auto dealers and Republicans have criticized the Walz administration’s embrace of the California model. The federal government only permits California to have its own auto emission regulations. However, it allows other states to follow the Golden State’s rules or those of the U.S. Environmental Protection Agency.
More than a dozen states have embraced the tougher rules, but California’s decision to ban the sale of internal combustion engine vehicles in 2035 has left several states, including Minnesota, debating whether to return to the federal standard. Backhaus expects the appeals court to release a decision early next year, which comes after the association lost an earlier challenge in federal court last year.
Fresh Energy, which publishes the Energy News Network, is one of six organizations that have signed on to a brief of amici curiae in support of the tougher standards. Fresh Energy policy staff do not have access to the Energy News Network’s editorial process.
Both Backhaus and Nesbit say the lawsuit does not diminish the association’s embrace of electric vehicles nor its desire to help members overcome challenges. Dealers may not like the speed of the transition, Nesbit said, but they understand the need to educate sales and service staff on the new technology.
They must learn how to speak to consumers about the strengths and weaknesses of electric vehicles in weather conditions in Minnesota, such as brutally cold winters that can diminish battery charges quickly, he said.
Backhaus said automobile manufacturers have begun requiring dealers to have chargers onsite and new equipment in repair shops. Dealers will need new lifts — because electric vehicles weigh more than internal combustion vehicles — and a retraining program for their mechanics. Ford recently announced new requirements could cost individual dealerships $1.2 million in upgrades, she said.
Minnesota dealers work with 65 different investor-owned, cooperative and municipal-owned utilities, Backhaus said. Some utilities, especially those owned by municipalities, have little experience with electric vehicles or chargers. Auto sellers will need onsite chargers, as will their clients.
“Hopefully, we can also educate utilities serving our dealers, so this is a smooth transition,” Backhaus said.
‘A massive misperception’
Tom Leonard, the incoming chair of the association and president of Fury Motors in the Twin Cities, has become a big fan of electric vehicles and of the association adding a staff expert devoted to training, education and advocacy. The lawsuit, he conceded, may have led Minnesotans to believe dealers don’t want to sell electric vehicles.
“That’s a massive misperception that has been maybe played more in the media than in the car dealership world,” he said. “Car dealers are very pro-electric vehicles, zero-emission vehicles. We don’t want to be behind what’s coming at us.”
Leonard said he will have to upgrade his dealership, which sells Chrysler, Jeep and Dodge vehicles. The association has been working with manufacturers about how infrastructure charging investments work in Minnesota, for example by pointing out that state funding requires the public to have access to the equipment. Many dealerships must start installing chargers and new equipment early next year to meet 2023 car company deadlines, he said.
Backhaus said auto manufacturers have not yet created programs to help dealers pay for upgrades. The association plans to look for funding for members through federal and state sources. The Inflation Reduction Act offers a 30% tax credit from charger installations, but some of the other initiatives come with “a lot of red tape,” she said.
The association plans to continue advocating for legislation in Minnesota to offer incentives for electric vehicle purchases and develop a program to help dealers pay for upgrades. Rep. Zack Stephenson, a Minneapolis Democrat, has sponsored legislation that offers rebates for buyers and assists in helping dealers pay for programs certifying employees to sell electric vehicles.
In the next few years, Backhaus would like to see dealers have the educational background, infrastructure and services in place to sell EVs.
“We want them to be able to talk to their consumers about how [electric vehicles] work and that they’re not a scary, unknown thing,” she said.
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