>> From WXXI News.

This is connections.

I'm Evan Dawson.

Our connection this hour will be made next Tuesday, September 30th.

That's the day that a significant EV tax credit expires.

And that means that anyone who wanted to take advantage of a $7,500 federal EV credit has just five more days to get it.

What happens next, though, is not entirely clear.

Here's how Fox News Business reports it.

Quote, the tax credit, which was passed in 2022 as part of the Biden administration's legislative push to support EVs and green energy, is going away as part of President Donald Trump's broad spending and tax bill that passed in July.

The move came after U.S.

EV sales in 2024 rose 7% to 1.6 million, according to the Bureau of Transportation Statistics.

History can be a guide to what auto dealers might do with EV pricing in 2019, when a previous version of the EV tax credit was phased out for both Tesla and General Motors because both hit prescribed sales targets.

Those two automakers responded by cutting prices, end quote.

But then six years ago, the auto industry wasn't dealing with things like tariffs.

And on Monday, economist Eric Morris told us that the biggest surprise for him regarding tariffs is that a number of retailers have attempted to eat the tariffs themselves rather than raise prices broadly.

But Morris said that eating tariffs is not a sustainable model.

He does expect prices to rise in a number of sectors over the next year as a result, not necessarily cars.

We'll talk about that this hour.

Fox business indicates a similar possibility, though could be there in 2026 for the car market.

While dealers and automakers may offer modest discounts on 2025 models, as the 2026 inventory arrives, industry experts are cautioning that the effects of tariffs could offset some of the savings.

Fox news spoke with Bryan Moody, Autotrader's executive editor, and Moody predicted that consumers will likely see only small discounts or favorable interest rates for those with excellent credit, and he expects new car prices to keep climbing.

That's all speculation for the moment, and this hour we wanted to look locally to start with, yes, the EV market to understand what's going on with this credit and then broaden the lens to car buying in general in our region.

And our guests are right in the middle of that.

Brad Mcareavey, president of the Rochester Auto Dealers Association.

Welcome back here.

Nice to see you, sir.

>> Thank you Evan.

Always a pleasure.

>> And John Love, president of the Bob Johnson Auto Group.

Welcome back to the program.

Thanks for being here.

>> Thanks, Evan.

Glad to be here.

>> You're really selling more EVs lately, huh?

>> You wouldn't think, right?

Yes, very much so.

>> People know this.

Credits go, and there's no catch to this, right, John?

I mean, this $7,500 credit is available through the end of this month only.

Is that correct?

>> That's correct.

This is one of those things some customers have thought, well, it'll get extended.

I've got a little bit of time.

This is a hard end.

This is for everything that we see is not getting extended.

>> What are.

>> You going to tell somebody next Thursday when they go to Bob Johnson?

They're like, I want that EV credit.

>> We'll make them the best possible payment terms that they can get.

>> How's that?

>> Okay.

Fair enough.

Brad, what are you seeing generally across the region with with this deadline coming?

>> Yeah, there's no question there's been a spike in EV sales.

Actually, I just did an EV show, an EV event here a couple of weeks ago.

And that level of interest and and the awareness, you know, people are aware that this is going on.

And and so we we're seeing it and we're going to see it through the end of this month, and then we'll figure out what happens after that.

But right now there's definitely a spike in, in sales activity.

>> Yeah.

And John, over the years, some of the things that you and I have talked about that drive a consumer's mindset on this or that have maybe held back consumers with EVs.

Obviously, price is one thing.

The upfront price is one thing, but also it's, you know, is it powerful enough?

what's the range those things have they improved much over the years?

>> The range has improved greatly.

It's the baseline now is around 300 miles of range.

You get into the 400 and even 500 miles of range as the exceptional range on EVs, the charging infrastructure is still growing.

It's out there, but it's growing.

And so what we're seeing is most consumers, most adopters of EVs, have the ability to charge at home overnight charging sort of thing.

So that helps to offset any range anxiety for the most part.

>> What about power of these vehicles?

I want something powerful.

>> They're fast.

It's instant power.

They're very, very fast.

Even the smallest ones with an electric drive motor, you have all the torque right from stepping on the pedal.

There's no rev, if you will.

>> This is not the old.

What was the first?

The 40 mile range with the volt.

The volt, the leaf which.

>> Was well the leaf.

The leaf had a 25 mile range and the volt with a V that had a 40 mile range.

But it was a never charge.

It was one that you simply kept.

You didn't have to charge it if you didn't want to.

>> Okay, so we've come a long way since those days.

>> Light years ahead.

Absolutely.

>> Okay, so I'll ask John first.

Then I want Brad to kind of broaden that lens.

But what happens after next week then.

Because certainly even though the products have improved, that's $7,500 credit is pretty attractive to your customers.

What happens to your market after next Wednesday?

>> So the manufacturers, they're already working to reduce production, and we feel that production will or sales demand might drop as much as 60%.

60% because the majority of consumers that are leaning in TVs for the first time are doing it because of the deal.

The affordability of it.

Yes, there are people that want to drive an EV because it's green, it's clean, it's the right thing.

But unless you're coming out of an EV, for most people, it's the deal.

And right now, when you take the 7500 and the fact that most manufacturers have pretty aggressive lease programs and incentives out there what what we're seeing is just offers that are tough to say no to, even for people that maybe weren't interested in EVs just a few months ago.

The payments are that good.

>> You've had people on the lot who come in not really thinking they're getting an EV, and they look at the numbers and they go, how do I not?

>> It's probably happened ten times today in our dealerships across Rochester.

Certainly.

No exaggeration.

>> So.

>> Brad, that analysis, does that really expand throughout the region in terms of what happens after next Wednesday?

>> Yeah, I think that's a fair statement.

And look, it's not like EVs are the only thing where the deal made made the difference.

I mean, the auto industry for a number of years now, through the use of incentive money and various other things, the deal has become more of a of a element of selling a car than it probably was 15, 20 years ago.

so I think John's absolutely right.

you know, when that money goes away, the manufacturers are going to have to figure out how do we sell these cars in a straight consumer demand model?

my feeling is, is that there's going to be a pause in how that all comes together.

The manufacturers are gonna have to decide how heavily they want to get into it.

they're going to have to decide how financially they put a deal together that makes it competitive, where a consumer would choose, you know, an EV over an Ice vehicle.

and basically have to compete just in an open market type situation.

>> So we'll see fewer EVs on the lot next year.

>> Very likely for a period of time.

>> Yeah.

>> Evan, I'd just add to that that with the incentive going away, the manufacturers certainly will have incentive dollars to spend on the vehicle to absorb some of it.

But this is really going to give us a real clean look of what the consumers truly want.

We're not buying their business.

They will speak with their wallets whether they want an Ice internal combustion engine and EV, or a hybrid of the two.

And I think for many consumers, the hybrid is the attractive option.

It lets them learn about driving an EV ish vehicle, but still having the range to drive as far as they want to drive, provided that there's fuel stations around.

>> It's going to be interesting.

no, that that's a really interesting way to look at it.

Be more of a I don't want to say less artificial of a market, but that's sort of the implication from you on this.

>> The market has been artificial, and the argument has been, well, the government has to provide the money to entice people to adopt new technology.

But this technology is 15 plus years old.

Sooner or later we have to just look at the raw demand and say consumers without incentive do want it or do not want it, no matter whether it's an EV or an Ice vehicle.

And that will be the interesting tell here is with an average incentive spend or comparable to an Ice vehicle, do the consumers still want it or is it just I want the deal and that's where the deal is.

We're going to find out over the next coming months, I'm sure.

>> What do you think there, Brad?

What are consumers going to do?

>> Yeah.

Again, I think that's a fair a fair statement.

consumers are going to are going to determine the future.

We've been saying this for years.

I mean, even when we were under the pressure of the mandate to adopt the mandates that California Air Resources Board had put in place, that New York had adopted, we said for years, consumers will ultimately make this decision on how successful this is going to be.

At the same time, New York, as a state very strong advocates, you know, for clean, renewable energy, et cetera., et cetera.

needed to invest in the infrastructure that unfortunately didn't get to the level where it needed to be.

It's not the right kind of charging, and it's not as abundant as it needs to be.

I think we're going to find out very quickly how invested New York is going to be in this.

When the mandate isn't there to force the issue.

But if you want to convince a consumer that an EV is a viable option for them, you have to have an infrastructure in place where that fear is no longer there.

And and you have to do it in a, in an environment where there's not $7,500 being given to the customer to try to persuade them, hey, take a chance and go with this.

Okay.

so I I'll be very interested in seeing New York.

Actually, the governor just yesterday announced a number of investments in in clean energy.

One of them was a $50 million investment in EV infrastructure.

That's great.

I'm glad that New York is going to continue to do that.

Drill down into that a little bit.

I'm curious and hopeful that they invest in the right kind of charging infrastructure.

They need to be level three direct charger type units, level two chargers in a public setting will not get the job done.

They need to be level three fast chargers.

That's what works in the public.

>> Have you.

>> Heard what they do?

Plan?

>> I do not know.

>> You don't.

>> Know at this point.

I mean, I can actually go on their website.

>> There's nobody telling them level two is good enough anymore.

Is there.

Like who's telling them that?

>> I don't know, I mean, nobody in our industry, I can I can.

>> Assure you, I would.

>> Assume.

Right.

So so anything that's not level three is kind of a waste of an investment.

>> Yeah.

Look, and there's a big cost difference there.

Big cost difference.

A level two charger that someone could put in their home.

1500, $2,000.

All in, installed, hooked up, ready to go.

A level three charger.

Jon 50 grand.

>> We spent over $300,000 on four of them between two dealerships.

Yeah.

>> So you're talking about a big number here.

And so.

But the state of New York, if it's going to invest money in it, needs to invest in the right kind of chargers.

And those have to be level threes.

>> Right.

>> That's going to be a story for us to follow for sure.

And by the way, last hour we talked about the importance of if you have principles they're your principles no matter what political team is in power, whether you think it benefits you or not.

John Locke is someone who probably doesn't mind a $7,500 credit that puts a lot of people on your lot, but it sounds to me like you think that that it's not a bad thing to take the training wheels off for, for.

>> The market.

Well, I certainly don't want to lose the 7500.

John Love does not want to lose that.

Let's be clear, however, what is going to happen because it's going away.

We have to accept what it is and that is that it's going away.

And as such, it does give us a true look at what the demand really is.

And I just want to add on the charging infrastructure a little bit, and that is up till now, EVs with dedicated charging, even level two in your garage at home, the keywords are garage at home.

Many people live in multi-family homes.

They live in rental homes urban.

You can't run an extension cord to your car across Park Avenue.

And so we really didn't build out in the areas that need it the most.

For those that would benefit the most with buying or driving an EV, the low cost of ownership, if you will.

And hopefully as we go through this $50 million and into the future, there's some focus more intense focus, putting put on serving those that need it the most, not just suburbia.

Two car garage, two EVs in the driveway.

>> All right, listeners, as we talk, we're going to broaden out from just EVs.

But I'm curious to know, are you sort of in the market right now?

Are you thinking about buying a car?

What are the factors that are moving your mindset on this?

Have you looked at an EV?

Did you just find out ten minutes ago that the EV credit next week is gone?

And are you literally on your way over to John's place?

So I wonder where people are on this.

It's 844295 talk.

If you want to call us ( 844)295-8255 or you can email us at wxxi.org.

Connections, which is what Greg did.

He says good government skews or no, not good government.

Sorry.

Government skews SUV and light truck sales by tax deductions and fleet economy exemptions, EV rebates pale in comparison.

That's Greg's perspective.

no, John.

>> You don't.

>> Think so?

Not for the typical consumer.

That is absolutely not the case when you're looking at large corporate fleet accounts or even government accounts.

Certainly there are advantages for those purchasers, if you will.

But that's a fair statement.

But it doesn't affect the person at the corner that's buying an Ice vehicle or an EV.

And that one off.

You, me, John Q public there's definitely not parity on the incentive spend there.

>> You want to add there, Brad?

>> Yeah, no, I look the commercial fleet business is a different business.

And whatever whatever's going on in that segment is not really I think what we're here to talk we're talking about consumers.

We're talking about retail buyers.

And you know, that that world is is definitely at a crossroads with respect to EVs.

I, you know, the the one thing that I, you know, when I look back on this you know, we the industry and the government, not necessarily New York, but California more specifically tried to push us too far, too fast on this particular issue.

And it got out ahead of the the curve in terms of adoption.

And and unfortunately, it pushed it so far that it had to be pulled back.

Had it been.

This is a long term play.

This is not something that we were going to see a huge, huge adoption of EVs in five years.

But the mandates were pushing it that hard, that fast.

And unfortunately now everything's going to step back.

We're going to have to revisit this on a different level.

hybrid vehicles, I think, are going to remain very in fact, they're growing.

Hybrid vehicles are growing because there is an interest in trying to adopt a cleaner vehicle and a cleaner energy and so forth.

But something that's a more a more achievable level of, of adoption today.

And so we're going to see that.

But that's, that's where I think we are with it.

>> So in the marketplace right now, what is the breakdown?

I don't know if you guys have this of John keeps saying ice internal combustion engine.

>> Yes.

>> Versus a hybrid versus fully electric.

What's the what's the breakdown of percentages?

Do you know Brant?

>> I don't know what the hybrid percentage is.

I can tell you it's growing.

Okay.

the EV adoption rate at its highest level, which is probably where it is today, is running at about 10%.

Okay.

Historically, prior to the announcement, this was going away.

It was probably run in the 7 to 8% range.

So that's 25% increase, but it gets us from 8 to 10, let's say.

So the Ice vehicle market is the vast majority of the remaining part of that market.

And there's some segment in there that's hybrid.

It probably isn't much more than 10% or 15% on its own.

but it's the growing number.

It is absolutely the growing number.

When we get past this EV credit situation, hybrid sales are going to continue to grow.

EV sales may drop off, but hybrid sales are going to grow.

And we're going to see it continue to grow.

>> John.

>> I would agree with that.

In the northeast, because of the weather more than anything else, our penetration is around 6 to 7% currently with EV and even that there's a concentration in cities like Boston and Philadelphia, et cetera.

California and the Sunshine states tend to perform better with EV just because of the the temperature differences.

But the goal, I think, for most manufacturers is to give the consumer the choice.

Do you want internal combustion, hybrid or EV all at a similar cost of entry, and let the consumer truly decide what their wallet, but not have it be punitive in any one of those?

>> So a little more on cost.

Alex e-mailed to ask, what is the average cost of an EV now?

I mean, it's a wide range.

It's not just one EV out there.

But Brad, do you want to start?

>> Look, I probably I could look this number up.

I can say that the average Ice vehicle right now is running at about 47 or $48,000.

And the average EV, I'm going to say is running at the 53, $54,000 mark.

EVs are still purely from a price standpoint, are still more expensive.

The the rebate is what got it down to the competitive number and even in some cases brought it below the the Ice vehicle pricing.

But there's still a delta there of maybe 4 or $5000.

>> Okay.

>> Sure.

And there's if you're to get an EV now really the best move is to lease it.

The manufacturers are putting very strong residual values on these vehicles.

And part of that is because they want them back at the end.

They want to understand how they performed, and they can keep closer track of them when they're coming back.

And a controlled environment.

So to buy an EV, sure.

Mid 40s to as much as $50,000, but on a lease you can lease them in the low 200 per month to mid two hundreds for a very nice, very, very well equipped EV.

Because of those incentives that are piled on top of the 7500.

But it's also important to note that the manufacturers, by and large, they lose money on every EV that they build because of the investment of many billions of dollars in the plants, the technology, the R&D, et cetera.

>> My father told me when I was 17 years old, leases are what's going to get you in trouble.

Don't lease now.

My father, small c conservative, pencil pushing, doing the math.

I was 17 a few years ago, so, John, you're saying at least in the EV market, leases are a good way to go for a consumer?

>> Sure.

If you drive a lot of miles or you're going to keep the vehicle ten years, then you would buy.

>> That was the issue because I think there was like a 12,000 mile.

It was like a thousand miles a month limit.

>> That's typically the average.

>> And then I'm paying for sure I drive 35,000 miles.

>> A year.

But why would you buy a depreciating asset, invest your money in something that appreciates automobiles?

Depreciate.

Believe it or not.

So leasing it allows the lease company to to deal with the depreciation.

>> Okay.

>> Yeah, yeah.

Obviously we get that argument all the time.

I mean and I would say the exact same thing to John.

Are you a lease type buyer.

Do you drive less than a thousand miles a month or somewhere in that range?

No.

And how long do you keep your car?

And if you're the type of person that keeps your car for ten years, then you're probably not a lease buyer.

What I've always liked about leasing is it gave you options as a customer.

Number one, it starts generally off with a less less of a monthly payment because of the way leases are constructed.

Okay.

So that's an option.

When I get to the end of my lease, I have the option to buy it.

If there's equity in the vehicle and it's a good, good move for me.

To which that just happened back during COVID when when the new car production levels dropped way down and the used car prices went way up, all those leases that had been written in 2018, 2019, 2020, those cars had incredible equity in them as a lease.

I got to the end.

Many consumers did five, six, seven, $8,000 worth of equity in a lease vehicle.

You were smart to buy your lease vehicle and maybe drive it a little bit longer and then trade it in, or even keep it longer than that.

So basically, the leasing company is taking the risk of the future value of the car.

And, you know, one of the other benefits is you're covered under the manufacturer's warranty the whole time.

I mean, there's literally other than an oil change and tire rotation or whatever, no major mechanical concerns because you're covered under the warranty on a lease.

So it all boils down to personal preference.

But leasing in on top of that, in New York, leasing has always been a very attractive financing option in this market, more so than any other part of the country.

Leasing in New York is extremely popular, more so than other areas.

>> I'm calling my dad.

>> The biggest argument.

The biggest argument has always been, well, you don't own the vehicle and you're first off, you're not paying to own it because the payment's less.

But I also say if you take a loan out, stop paying and see who really owns your loan.

It's the bank is going to own the vehicle.

So either way, you owe somebody something.

>> Yeah.

let me close the loop on a couple of things with EVs.

So I mentioned off the top that Fox News business looked back at 2019 and there according to their reporting, a previous version of an EV tax credit phased out for Tesla and GM.

And those two automakers, Fox says, responded by cutting prices, which is an optimistic idea for consumers.

They might say, well, okay, we're going to lose the $7,500 credit, but maybe John and maybe others will find a way to to to make up that gap.

7500 is too big a gap to make up.

John.

>> That's a bridge too far.

There's no doubt that the manufacturers will incentivize and do what they have to do to keep the metal moving, so to speak, but I think we just have to be realistic about it.

$7,500 is just a bridge too far.

It's it's going to impact the payments.

There's no doubt.

Agree prices.

>> Yeah, definitely agree.

I really think the manufacturers again they're going to have to figure out a way to make the vehicle attractive and competitive in a market without that level of incentive.

And they have incentive money.

I mean, there's the car industry has been riding on incentive money for a long time now.

So they have it and they're willing to use it.

But that's a big number.

You don't see incentives like that very often.

I mean, I maybe in my whole year I've seen maybe a couple of times when there was something really on that level of incentives.

So they've got to figure out a way to, to make the vehicle price and the payment be competitive in a market.

>> what is the number one selling EV on your lot?

John Love.

>> Should Equinox or Toyota RAV4 okay.

Yeah, those are.

>> The two.

Yeah, both.

Both mainstream type vehicles.

And again they're affordable.

I think you know, when I was at this EV event here a couple of weeks ago.

That's we saw a lot of those.

We saw a lot of equinox's lined up.

We saw a lot of rav4's.

And why?

Because it fits into a lot of people's financial budget and their ability to to buy it.

So I also saw a and I've never seen this before, a maserati convertible, EV, I've never seen that before bought, you know, from Maserati of Rochester.

I was completely blown away, mostly because the guy driving it is a Tesla owner.

>> So Maserati EV.

>> Convertible.

>> Okay, that's a unicorn.

>> the price on it was pretty significant.

>> It's an mC20.

It's very significant.

It's a.

>> Significant number.

It's not for the average person.

Certainly not the Rav owner.

but I was I was pretty impressed with the fact that a former Tesla owner was driving it.

So.

>> Dallas wants to know if work is 25 miles each way.

Can a lease work >> so what's that?

>> 50 miles a day, 200.

>> 250 miles a week?

>> Yeah, at least.

>> Yeah.

>> Yeah, it's it could on a 12,000 mile per year lease it, you know, or or go to 15.

You can go as low as 10,000.

And there's really no limit on the top side.

But you can go to 15 even.

Yeah.

>> Okay.

>> Yeah.

Your payments are just going to go up a little bit.

That's all.

I mean you're prepaying you're prepaying for the mileage.

So if you need a little bit more room and you know that that's your level of, of mileage, then, you know, do a lease that encompasses that mileage.

>> another listener is asking what is the mileage overage fee?

Is it different everywhere?

I mean, it used to be.

>> It is, but it's typically about $0.25 a mile.

>> Yeah.

Back in back in my days, you know, says the, you know, the aging man hosting the show.

I think it was a dime a mile back in my teenage years.

>> And I will say, I think this is still true.

Buying it upfront is less expensive than buying it on the back end.

>> That's correct.

>> Okay.

Clayton Clayton wants to know if as we learned in the Seinfeld episode where George told Jerry to simply walk away anytime a deal was was brought up on an auto lot.

Does that work in real life?

Well, John, where your guest freak out if I threaten to walk away?

>> Definitely not.

We'd love to earn your business, but definitely not.

And people do.

>> Do you remember that episode?

Do you guys know the episode?

>> I did get up and walk away.

>> Yeah, I remember that episode.

George says, Jerry, you got to tell me I'm out of here.

I'm walking out of here.

That's right.

>> As only George could do.

>> As only George.

>> Could throw up his hands.

>> So Clayton wants to know, does that work here?

>> No.

No more than it does when the dealer says, if you don't buy it today, the deal's off type of thing.

I mean, it's it's a different selling.

>> Market dealer tactic.

>> It used to be.

It's a different selling market and a different buying market.

Consumers are much more educated and the dealers have to work harder to earn your business than they do that through reputation.

More so than price.

>> All right, Clayton, I mean, listen, George Costanza's never been wrong, I'm sure.

But I think that was fiction.

Andrew says, Evan, there's no such thing as a purely free market.

All markets are shaped by government policy in some way.

So it's not really true to say that removing the credit for EVs will allow us to see true market demand.

We're just moving from one market shaped by one set of values to a previous status quo market, shaped by a different set of values, one where costs are artificially lowered by fossil fuel subsidies, not to mention environmental costs that have always been externalized.

That's Andrew's economic lesson.

Email John Love.

What do you make of that?

>> Sure.

And we can cut this a hundred different ways for the average consumer driving onto our lot.

It's what is what's it going to cost me today.

And that comes from the contribution from the manufacturer by way of incentive and pricing and interest rates.

And there's a lot of things that affect the cost to build a car.

Andrew's right.

But the reality is for most people we don't get that granular.

What's the cost going to be.

And the $7,500 going away is going to impact the cost.

Without a doubt.

>> And it will impact decision making.

As you heard our guest say earlier, could impact EV sales locally by 50, 60%.

That's a big number.

>> Yeah, absolutely.

>> Big number.

Anything you want to add there.

>> Brad?

just again, John is John is absolutely right.

Does government involvement in any industry skew things?

Of course it does.

Yeah, of course it does.

But you know that's a variable, this variable that we're talking about today when it leaves the market next week that's going to play into that decision by the by consumers, because it won't be there and it will affect price payment.

And those are the things that drive people's decisions.

>> Joel writes to say, I wish there was a 2025 Chevy Bolt.

I will likely buy a 2027 bolt when GM brings it back.

>> Yeah, that's a cult car that people love.

I've seen the new bolt.

It's amazing.

It's not a plug for Chevrolet, but it is an amazing vehicle priced under $30,000 without it, without an incentive on it.

>> Under 37, under 30, 30, 30.

What's its range?

>> the new one will have 160 mile range is what they're talking about as a base level.

>> Okay, so popular will be popular.

Why is it not being sold now?

I don't this is not something I'm.

>> They stop production on that because the plant that built that went over to Blazer and Equinox EV production, the bolt was due for a refresh.

And now it's coming out with more than just a minor refresh.

It's almost a completely new vehicle.

>> So Joel says the next bolt is 2027, is that right?

>> That's correct.

It'll be out in 26.

Is a 27 model.

>> Year okay.

>> We're ordering them now.

We're pre-ordering if we will.

not for consumers, but for dealer inventory.

>> Okay.

after we take our only break of the hour, I'll welcome more of your feedback, listeners.

And we're going to talk in general about where we think the car market is going.

I think you've got a pretty good sense of where EVs are going.

with the $7,500 federal rebate going away after next Tuesday, you got five days left.

If you want to buy an EV with that $7,500 bonus, so to speak, and then it's gone.

So but let's talk in general about where we think prices may go.

We're not going to overly speculate.

There's a lot that our guests can't control.

As much as they would love to.

They don't control the world, but they do respond to the forces that are out there.

And we'll talk about that with John Love from the Bob Johnson Auto Group and from the Rochester Area Auto Dealers Association.

Brad Mcareavey, we'll come right back on connections.

I'm Evan Dawson Friday on the next connections, my colleague Racquel Stephen hosts the program in the first hour, the medical system needs more professionals.

What does that mean for the future of people who might want to become a physician's assistant, a nurse, and what are local colleges doing to help prepare the workforce for that?

In our second hour, talking about maternal morbidity, talk with you Friday on Connections.

>> Support for your public radio station comes from our members and from bond, Schoeneck and King, a multi practice law firm in Rochester with offices across New York State serving business, health care and educational institutions.

Online at ebsco.com.

>> This is connections.

I'm Evan Dawson a couple other points on EVs.

I did want to grab Eric's phone call calling from Canada on the road.

Is that right?

Eric?

>> Hey, that is very, very much be safe.

>> Be safe.

If you're driving.

>> Yeah, yeah, we're we're we're paying attention.

We're hands free.

we happen to have two vehicles from the Bob Johnson Group.

one of them is an EV.

John.

>> Needs the, like, free advertising.

Eric, my goodness gracious.

>> Thank you.

Eric.

>> You're the one that put him on the show.

>> I know.

>> I figured it was fair game.

>> Go ahead.

So go ahead.

You know.

>> The the the range issue is real.

I mean, I'm going to just at one point but one question.

the range issue is real.

We're driving the gas car right now because when we get to our destination, we're not sure about charging and all that kind of good stuff, and we decided to take the Canadian route to the Detroit area rather than going through the U.S., which would have been a little bit more known.

the EV car, though, saves us a ton of money on our gas costs.

on just our regular driving.

We charge up at home.

And when we go to Virginia, when we go to DC and we go to Baltimore, we don't have any problem finding chargers and keeping the car fueled up.

So I'm so I'm saying I agree, we probably are going to go hybrid when we replace the gas car, but we're going to keep an EV in the family.

My question is why is the why are the EV cars other than the batteries?

So more such more expensive than the gas cars?

The gas have the gasoline engines have many more moving parts, a lot more complexity.

And to me, would overall cost more.

But I don't build them.

So why is it that EVs are starting off as more expensive?

>> Thank you Eric.

Appreciate it.

>> Drive safe.

go ahead guys.

>> So I'll start with that.

Yeah.

We really are on the the new frontier of EVs.

As far as the newer technology.

And it's the investment, the upfront investment.

GM, for example, built a battery plant for $4 billion that gets paid back through the sale of the vehicles.

It's the the cost of new architecture for most manufacturers.

They're not existing models that are retrofitted.

They're all new architecture.

So all of those upfront costs, they do have to be recaptured.

And that's where it is.

And the batteries themselves are exponentially more expensive.

It we would have a battery pack come in for a vehicle.

It could be $30,000 for the battery pack for a vehicle.

The engine is not 30,000 or even half or a quarter of that in most cases.

>> Okay.

>> Pretty good analysis.

>> There Brad.

>> Yeah, it is.

And you know, the battery aspect of it, you know, again, the manufacturing of it, where do you get the rare earth minerals?

Where do you get all those things to acquire all of those types of products that are necessary to build it, are are expensive, much more expensive than getting regular supply of parts and accessories to build a regular Ice vehicle.

So John's right.

We're in the very early stages, even though we've been talking about EVs for quite a long time.

For the manufacturers and the amount of money that they've invested in this just in the last 3 to 5 years, there's a significant amount of cost that has to be recovered for a for a long period of time.

>> Is it possible that in the next generation that the gap will shrink a little bit there?

>> Yeah, I think it will.

I use the analogy because I'm older, that when the cell phone came out it was a bag phone.

Then there was the flip phone.

Now there's a supercomputer in my pocket.

We're at the flip phone era of EVs, if you will.

The supercomputer era is not far away with solid state batteries, for example.

But we're in that middle part of evolution.

And as we evolve more, the cost to manufacture will come down.

The technology will improve, it will make it more affordable.

>> Great point and great questions there Eric.

Thank you for the phone call.

again, drive safe.

My friend and Brad Mcareavey had a point that I think needs to be made, just in case you are really thinking about the next five days, because obviously a lot of buyers in this country are going to be thinking about if they want to try to get this $75 credit in the next five days, what do you want to make sure people understand?

>> Just just one quick caveat to to this credit if if a consumer goes out into the market and is looking for an EV and it's not available, it's not available in the make model that they want, they do have the option to order the vehicle, sign a purchase agreement with the dealer, put down a deposit on the car.

There's no amount that's specified, and they can order the vehicle and they can take delivery of the car at some future date and still get the credit.

So the ending of the credit for September 30th applies to all vehicles that are in inventory today.

All vehicles in inventory today.

But if you order a vehicle, there is an extended period of time where you can still get it.

>> I think I've occasionally been saying rebate.

It's a tax credit.

It is not the same thing.

>> Yeah, and it's not a tax deduction either.

It's a full dollar for dollar credit on your tax return against whatever tax is.

Now understand you have to owe the taxes in order to get the credit too.

>> So no on a lease it comes off the payment monthly on a purchase.

It's a tax credit full a full credit if you will.

>> Leases are actually sold to a leasing company.

And they they claim it as a business credit.

>> Speaking of leases, this is RJ in Rochester on the phone next.

Hey RJ go ahead.

>> Hi.

one of the issues that hasn't been addressed is the fact that when you go to buy a car or lease one, sure, they're going to give you the tax credit, but what they do is they jack up the amount of money due up front.

I was looking at a car recently, and there's no deals on hybrid cars.

They they want an extra 2000, 3000, $4,000 on top of the $305,450 a month payment.

So nobody talks about that at all.

>> Guys here.

>> That's the down payment to get to the payment that's advertised.

You could buy a vehicle with no money down.

But of course, if you put nothing down, then the price or the payment goes up, not the price.

The payment goes up.

So it's that's advertising.

That's advertising.

>> Okay.

>> Brad, anything to add?

>> only that there aren't very many hybrid vehicles that actually are eligible for the credit.

So you don't get the benefit of it in in some cases, there are some they have to be plug in hybrids.

They have to have a certain range, et cetera.

But to John's point you know, every vehicle has a price.

Every customer has a financial willingness to put money down on a car, and they all have an idea in mind what they want their payment to be.

And the math has to work.

in all of those scenarios.

>> All right.

I'm sorry.

>> No.

>> Go ahead real quick.

Yeah.

Typically, whether it's us or other dealers, when we advertise a price, we know what the market point is of comfort for a mid-size SUV, for example.

So a dealer may advertise to get to a payment.

That's a typical payment on that vehicle.

And then impute the required down payment to get there.

So if a consumer for a mid-size vehicle is going to respond to a 3.99 payment, how much money does it cost to get there as effectively what they're doing?

>> RJ thank you.

a lot of questions.

Comments.

on a range of things here, June wants to know says my husband has been told by a local dealer that he can only take advantage of the $7,500 credit if he leases.

The dealership is not offering them for purchases.

This is for a Toyota RAV4 hybrid Plug-In.

Is that a common experience locally?

Is that correct?

>> Well, the dealer doesn't set the terms or the rules for that.

I didn't think so.

And the dealer doesn't get the money.

Either way, it goes to the consumer, whether it be in a lease or through their taxes.

>> So I feel like.

>> There's each vehicle in each vehicle has an eligibility.

There are some vehicles based on gross vehicle weight rating and also powertrain or propulsion system that it may only qualify one way or the other.

>> Yeah.

And as I remember and I say this, my recollection is some of the requirements under the retail purchase in terms of price of the vehicle, source of materials, where the vehicles manufactured.

Some of those are waived under a lease scenario because of the fact that the leasing company is actually buying the vehicle under not to get technical, the 45 W credit has different parameters than the retail purchase credit.

So maybe what they're saying is there's some aspect of that transaction that makes the lease option be eligible.

If the customer doesn't meet some of the requirements of the retail purchase.

That's my my my guess.

>> Okay.

>> Dallas says Dallas says I know some EVs are dangerously quiet.

Are there choices in the car?

Noises to alert pedestrians?

Like, I don't know, geese noises or just simulated engine noises?

>> There is a NHTSA rule that EV traveling under 14 miles an hour, I believe it is, has to let off an acoustic sound or signal.

And they do.

You'll hear all kinds of strange noises coming from them when you're creeping through a parking lot.

>> Okay.

Correct.

Like the halo noise, you.

>> Know, like it's a bunch of different.

It's not rock music or classical.

It's just random or geese.

>> Geese.

but that's actually.

>> It is a thing.

>> It's for real.

Yeah.

That came up a number of years ago with the the blind community needed something to help them.

They're crossing streets.

they can't hear the car coming, and and they need to do something.

And the the national Highway Transportation Safety Administration put in that requirement.

And so they're they're.

>> They're there.

All right.

>> David in Pittsford says, I've been driving an EV for eight years.

I've never had a problem with access to L3 chargers.

However, no way would I consider owning an EV if I couldn't charge when I park in one place for more than eight hours.

The L2 charger is in my garage.

I would never want to give up the convenience of my EV, which rarely requires service and never requires standing at a gas pump in a blizzard.

If the state wants to promote EVs, then subsidize for L2 charging at workplaces and apartment complexes in time, apartments without access to L2 charging will have to rent at reduced rates.

What do you think there, Brad?

>> My personal feeling, you know, the fact that he has a level two charger in his home is absolutely the right thing to do.

My personal feeling on public charging, and I consider to be multi-unit apartment complexes, public charging.

I believe they need to be level three chargers.

I just don't believe that if you have a apartment complex with hundreds of people living there and you've got five charging units out there that require anywhere from maybe 6 to 8 hours of charging time, it's wholly insufficient.

You need level two, level three charges in any public setting.

That's just my personal opinion, John.

>> I would agree with that.

A level two charger you're effectively saying it's one car per day because while people are awake, they're plugging it in.

They're not going out at 2 a.m.

to take it off for their neighbor to charge.

And there's simply not enough of them out there.

Level three, they are out there.

It's good that he's been able to find them, but we do have charging deserts drive through the city of Rochester and see how many level three chargers there are.

They'd be hard pressed to find them in a lot of our communities.

>> David, thank you for that.

let me turn our attention to where we think prices may go in general here.

We talked a lot about EVs, but in general, for the market, one of the things that we talked about in part with Brad Mcareavey a number of months ago was, you know, the uncertainty of tariffs, the possibility of of higher costs or who would incur those costs.

Is there a general story on tariffs so far that has affected the industry or not?

Brad.

>> I would say the general feeling is, is that they haven't affected the industry nearly to the level that it was expected.

you know, every article that you read right now will say that the manufacturers have largely absorbed whatever tariff costs might be out there in the market.

>> They're eating the tariffs.

>> They are.

And again, because it's it's a very complicated situation.

Every manufacturer's impact is different.

And I think they're really and also I think there was some expectation they might not be long term.

There was an expectation that, you know, because a lot of these are trade deals, that there was a possibility that you could strike a trade deal and have the whole thing go away.

so there's just been a lot of up and down in the whole discussion on tariffs.

And I think until there was some certainty about the presence of tariffs and then being in the market, then the manufacturers at that point are going to say, okay, this looks like this is going to be long term.

We've got to figure out how we're going to do this, and we're going to have to make some of this into our pricing.

>> So if there is not any change, if there aren't deal struck and tariffs eliminated a year from now, two years from now, you would expect at least some movement on prices on it.

>> our good friends at Cox Automotive, which is the analytics company for the auto industry, does a phenomenal job digging into these types of things and their prediction, because that's what it is.

It's a prediction, an average across the board increase in the price of the vehicle somewhere between four and 8%.

That's an average number.

>>, not nothing.

>> Not nothing.

Right.

I mean if you're again you're talking $50,000 cars, 4 to 8% is not an insignificant number.

But again, that's a long term prediction.

If if nothing changed, if everything right now remained the same, that's a long term prediction.

but again, every manufacturer has the opportunity to soften that through their use of incentive money and other tools that they have available to them.

>> And one, I think important point that our guests were talking about before the program that I think will be useful for everyone to hear, is that even in that world where there's a 4 to 8% increase in the average automobile there's not going to be you're not going to go on to a lot and say, well, here's a tariff car.

So this has got this is five K more than the one next to it.

This is a non tariff car.

That is not how they will be sort of effectively that's not what we will see in the real world.

Right John.

>> Right.

Because the tariff car would just grow old with flat tires and sink into the ground.

So no that's not how it works.

They smooth the tariffs.

Brad's exactly right in what he said.

And they spread that over all of their vehicles because it really it would just take them out of the market of being able to sell a specific model or specific vehicle identification number, if you will, if that was identified as a tariff vehicle.

>> So a gentle, a gentle and general spreading of cost if if the prices are going up.

>> Right.

>> Yeah.

A spread of cost.

And then keep in mind manufacturers they have to retain market share for their shareholders.

And so they will do what they have to do incentive wise to keep those vehicles competitive in the market.

>> Okay.

Are you worried about where tariffs are taking prices in the future?

>> Well we always worry about price increases.

It doesn't keep me awake at night, but it's not a good thing to think about yet.

One more way that prices will go up for anything that we have in our in our home, or that we buy or consume.

>> You'd like to see some some deals struck and some tariffs eliminated.

>> We would like to not be the one that's subsidizing all the discounts, that's for sure.

It'd be better if the manufacturer did some of that for us.

>> That's great.

Is that a sentiment you hear often, Brad?

>> Sure.

And I think again, somebody made a comment about the retailer absorbing the price.

that's not really where the bulk of this is going to happen.

I mean, if a dealer, a dealer's got a little bit of margin, he can work with he or she.

and so there is an option to try to work with it on a, on a sale by sale basis.

But the vast majority of this has to happen at the manufacturing level.

And you know, we'll just every manufacturer's scenario is going to be different.

And I would go a step further.

We talk about generally smoothing this stuff.

You know, if a particular model of a vehicle is a tariff type vehicle and you're spreading the cost over that, but you also have to be mindful of where that fits into your ladder.

Of all your other models of vehicles.

So John sells Chevrolet.

They have like 18 different models of vehicles.

They're all in the pricing ladder.

Okay.

From top to bottom.

Well, if one of those vehicles, even if you spread it across it, it it moves that price up to where it's now at a level that makes it, unaffordable in relation to the next model of vehicle.

Then then you've also got to play with that number.

So again, that's why this whole discussion is so complicated.

>> Maybe we just don't manufacture it.

>> And we're seeing some of that.

Some of the manufacturers have actually announced eliminating production of EVs currently.

>> Yeah.

They've pulled.

back on a number of them.

>> back to the phones, Keith and Victor.

Hey, Keith, go ahead.

>> Evan, how are you?

Good.

>> Sir.

>> quick comment.

We've been in a Tesla owner for six years.

we haven't had a problem with it.

And fortunately, we don't even incur any electric costs because we have solar panels.

But the one long term problem with EVs is they weigh a lot.

Her weighs about 4000 400, 4,400 pounds, but we don't pay any excise tax or very limited with our we don't even get an electric bill.

But when you buy gasoline, you pay a tax to help supplement roads and bridges.

EVs don't.

And it will be a problem.

mm-hmm, mm-hmm.

>> Well.

>> that's an interesting point though.

>> It is you know and New York has been a little bit slow to understand and adopt.

There are a number of states around the country that have imposed an additional tax on EVs at the time of sale.

Some of them even have.

>> For exactly this reason.

>> Exactly this reason, this is exactly why you know, gasoline has a highway tax.

That tax is used to repair and maintain highway infrastructure.

When you buy an EV, you don't incur gas.

Therefore you're not contributing to the cost of highway maintenance.

And your vehicle is sometimes twice as heavy as a regular Ice vehicle.

You actually have more wear and tear on the highway than a regular vehicle does.

So many states have adopted a an additional tax on the sale of an electric vehicle at either at the time of sale.

Some of them even have annual or semiannual additional costs, strictly for the purposes of funding the the highway maintenance costs.

New York just hasn't done it.

>> But but will.

>> You would think so.

You would think so.

I mean, New York is not shy about imposing taxes.

You know, some taxes.

So but yeah it just it just for whatever reason hasn't happened yet.

>> New York, the state that is reticent to.

>> Impose new you know, obviously you've heard this governor talk about affordability for consumers.

And and, you know, if you want to promote the sale of EVs, you make it as affordable as possible.

So you avoid not putting those things in place.

But the when it reached a point where it was substantial number, because, again, we're sitting at 6 or 7% in New York State.

If it gets to the point where it's 15% or 20% and you're not getting anything, you got an issue.

>> Yeah, really interesting point, Keith.

Thank you very much.

here's here's a very I think, inside baseball to the industry.

Alex says, I wish one could upload a personal EV sound something cool, like a vintage two stroke, three cylinder Saab model 96 Monte Carlo Special.

Just my two cents.

I don't think they can do that.

Alex.

That's a very specific car sound.

>> Somebody will figure out how to hack into the system.

>> No doubt.

Yeah, yeah.

>> I look I think for real, real.

I'll call the true car enthusiast.

You know, one of the, the little side issues of a struggle to move to an EV is the sound.

It's the sound.

They want to have that muscle car throaty engine, you know, roaring type of thing.

And even though the EV, as John said, will blow the doors off of any internal combustion engine car, every electric vehicle faster, more torque, it'll flat out blow the doors off an Ice vehicle.

But there's no sound.

And some people.

>> Want that.

Yeah.

>> So the Dodge Charger EV has an option.

You flip a button and it makes a rumbling noise.

Sounds like exhaust on the vehicle.

And it's loud outside the vehicle, and it's an EV.

And then there's other manufacturers mainstream that pipe additional engine sounds through the speakers in the vehicle for their Ice vehicles.

BMW is notorious for that, making it seem louder than it really is.

>> That's inorganic.

That's artificial.

>> It's it's it feeds its purpose.

>> I guess.

>> It's marketing.

>> As marketing down to our last minute.

And I don't think Brett had a chance to say this on the air.

I think you had mentioned before the program that the number of the actual car sales number locally, I mean, for all the concern about sales being down, they're not down right now.

>> They are not we track new car sales in Monroe County.

We've been tracking them for over 20 years.

surprisingly.

And again, affordability is my big thing.

I look at affordability, and it.

You know, John, it doesn't keep them up at night, but it's a concern.

Okay, for the industry right now we're on track through August of this year to actually have our best new car sales year in Monroe County in 23 years.

That's pretty amazing considering all of the headwinds and everything.

High interest rates, you know, where we are from a vehicle standpoint, where the average car payment is when you throw all that into the mix right now, and to be on a pace, to do a number like that is pretty, pretty impressive.

And it's a credit to our dealers here locally.

>> As we wrap here, it's not keeping John up at night.

You're worried enough that that that record year we're not going to see a repeat next year.

>> look.

>> I don't predict any of that.

I mean, we've been slowly recovering since COVID, and now we're at a point where we might see that that particular year happen.

EV sales are going to drop off in the last quarter.

We'll see what kind of impact that has.

But I'm just pretty impressed that we're on a pace to do that kind of number.

>> I just can't believe you had time to come in and do this show.

Considering that all the people who want the EV credit in the next five.

>> Days.

>> The showrooms are busy for sure, and we're appreciative of that.

>> Thank you for making time for us, John.

Thank you.

And John is the president of the Bob Johnson Auto Group.

And Brad Mcareavey from the Rochester Area Auto Dealers Association.

Thank you for your availability and for talking about this.

Let's talk in six months again, see how things are going.

Come on back.

>> Thanks, guys.

Thank you.

>> More connections tomorrow.

And thank you everyone for listening.

Racquel Stephen.

My colleague will be hosting.

I'll see you next week.

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