Rivian, the buzzy automaker promising an electric pick-up truck by late 2020, had state lawmakers’ attention during the legislative session — if only for a few minutes.
In those moments during a House committee hearing last month, a representative from the Michigan company shared that Colorado has a special place in the company’s future.
“In fact, Rivian has already planned to open its first ever store, worldwide, in the state of Colorado,” Rivian’s Vice President of Public Policy Jim Chen said when he testified on April 18 in support of a bill to let electric vehicle manufacturers sell directly to consumers.
The bill failed, and it’s uncertain whether Rivian will move forward with a Colorado store. But electric vehicles are of high interest to policymakers who passed several other proposals aimed at encouraging consumers to buy zero-emission autos. Parking authorities can now ticket automobiles blocking electric vehicle charging spots. Another measure lets public utilities invest in charging stations and recover the costs from customers. And tax incentives on EV purchases was extended. All three await Gov. Jared Polis’ signature.
“I think electric vehicles will become a competitive choice,” said Rep. Hugh McKean, a Loveland Republican who cosponsored the failed measure. He’s not a fan of unfair advantages, such as tax-credits for EV purchases, but in this case, he’d hoped to level the playing field since Tesla is the lone manufacturer that can sell directly to consumers. “The goal here is longevity (of EVs) and the ability for them to compete in the marketplace.”
Electric vehicles are growing in Colorado, which ranks fifth nationwide for the rate of EV sales, according to the Alliance of Automobile Manufacturers. The state’s generous rebates and back-to-back governors pledging cleaner air via lower vehicle emissions have increased EV purchases. EV and hybrid sales made up 3.5% of the market as of March this year from 1.57% in 2017, according to Alliance of Auto Manufacturers and the Colorado Automobile Dealers Association.
There’s also a growing, vocal electric-vehicle community of mostly Tesla owners who were pumped that charging stations will be safe from what they call ICEholes, referring to trucks and other vehicles with internal combustion engines that purposely park in front of charging stations to block those in need of an electric fill up.
After learning Arizona fines vehicles $350 if they’re parked in front of charging stations, Kamala Vanderkolk hired a lawyer to write a bill for Colorado and then found bipartisan sponsors in Sen. Kevin Priola, a Henderson Republican, and state Rep. Jovan Melton, a Democrat from Aurora.
“I’m thrilled that the state legislature has passed this bipartisan bill to ensure that EV owners, both Colorado residents and roadtripping tourists, will have access to their fuel source just like everyone else,” said Vanderkolk, a Tesla Model X owner who lives in Roxborough Park. She parked herself at the Statehouse Friday evening to see the bill pass.
Sean Mitchell, president of the Denver Tesla Club, added “With more than a handful of EVs now available below $40,000, and a total cost of ownership below $30,000, this is far from a ‘1 percenter’ bill. This is a bill for the majority of Coloradans who make the decision to go with the numerous benefits of the electric drivetrain.”
Also approved during the session is the extension of the end date of tax incentives on electric vehicles purchased through 2025. Buying an electric, plug-in hybrid electric or hydrogen vehicle will qualify for tax-credits of $2,500 through 2022 and drop to $2,000 for purchases through Jan. 1, 2026. Leased electric vehicles get a $1,500 credit. Tax credits are higher for heavy-duty electric trucks. The current tax credit, which ends Jan. 1, 2020, is $5,000 for electric and hydrogen passenger vehicles.
Meanwhile, if Rivian wants to sell its trucks to Coloradans, it can. But it must follow the route of other auto manufacturers and sell through a dealer franchise. That rule came about in 2010 to protect dealerships facing the loss of their franchises after General Motors filed bankruptcy. Lawmakers made an exception and grandfathered in automakers that were handling their own sales in 2009. The exception was intended to let a Lamar bus manufacturer continue selling directly to customers, according to prime sponsor Rep. Chris Hansen, a Denver Democrat, who didn’t name the now-defunct bus company. Tesla, founded in 2003, used the law to bypass dealer franchises and sell directly to customers.
The bill considered this year would have made it easier for all electric vehicle makers — including ones that don’t exist yet — to more easily market and sell zero-emission vehicles to consumers, Hansen said during the hearing.
“This is really just a matter of equity as we go into the future. We know the sales are going to continue and lots of exciting new products are getting to market,” he said. “This is to make sure customers, our constituents, can access those vehicles on an equal basis to the Tesla offerings.”
The automobile industry opposed the bill. Auto dealers said the existing law protects consumers if the manufacturer runs into trouble and dealers are there to service the vehicles. But even traditional automakers weren’t fans because the bill would have split the market into two classes — those who can sell directly to consumers and those who can’t.
“We believe this sets up two very different regulatory systems for automakers in Colorado and does that in a very unfair way,” testified Jep Sepan, a representative of the Alliance of Automobile Manufacturers in Washington, D.C.
Rivian was the darling of the Los Angeles Auto Show in December because there are very few electric trucks and SUVs — some of the most popular types of vehicles purchased in Colorado. The company also rolled into Aspen during January’s X Games, and made a short film about their adventure in Colorado.
According to Rivian, its future R1T truck will have a range of up to 400 miles on a single charge, go from zero to 60 mph in 3 seconds and tow up to 11,000 pounds. Production of the truck will begin in the last quarter of 2020, followed by the 7-seat electric SUV in the following quarter.
While neither zero-emission vehicle is for sale yet, Rivian has been taking preorders from customers willing to put down $1,000, which is refundable. Compared to all states, Colorado drivers have placed the sixth largest number of preorders for the vehicles, confirmed Rivian spokesman Michael McHale.
He told The Colorado Sun that selling to customers directly is Rivian’s business model and without that capability, he’s not sure opening a store makes sense anymore.
“We will not open franchises and we feel that this kind of legislation reduces consumer choice in the marketplace,” McHale said. “Selling directly remains our business model.”
The Colorado House killed the bill on April 23, a day before Ford Motor Company announced it would invest $500 million in Rivian and partner with the startup to work on a next-generation electric vehicle for Ford. Rivian raised $700 million in February in an investment round led by Amazon.
McKean isn’t giving up. He plans to meet with affected automakers and dealers over the summer in hopes of figuring out a better way for EV startups to sell fairly in Colorado.
“No matter what, the citizens of Colorado deserve to have a level playing field,” McKean said. “…We want to make sure that whatever path we follow here, consumers have access to a product and access to repairs and parts and everything else. This is basically everyone’s second highest expense, after a home.”
The year in EV legislation
A number of bills affecting electric vehicle adoption in Colorado were considered during the 2019 session.
House Bill 1159 — Extends income tax credit incentive on the purchase or lease of an electric vehicle or plug-in hybrid electric to 2026. Purchases through 2023 qualify for a tax credit between $2,500 to $10,000 and then drop to $2,000 to $8,000 before expiring on Jan. 1, 2026. Today’s tax credit is $5,000 to $20,000 and ends Jan. 1, 2020. Status: Passed
House Bill 1198 — Allows the Colorado Energy Office flexibility in administering the Electric Vehicle Grant Fund, which was established in 2009 to provide grants to local governments to install EV charging stations. That includes prioritizing grants to cover operating and installation costs of EV charging stations. Status: Passed
House Bill 1298 — Fine vehicles parked in front of an electric-charging station but are not charging $150 plus a $32 surcharge. Status: Passed
House Bill 1325 — Allow electric vehicle manufacturers to sell their electric vehicles directly to consumers. Current law prohibits manufacturers from owning or operating a dealership in Colorado, though an existing exception allows a manufacturer to operate one dealer location for direct consumer sales. Status: Failed
Senate Bill 53 — Prohibit the state’s Air Quality Control Commission from adopting vehicle emission standards more stringent than federal standards. In other words, California’s standard, which has zero-emission vehicle mandates. The commission is considering adopting California’s standard. Status: Failed
Senate Bill 77 — Allows investor-owned public utilities to provide charging ports or electric-vehicle fueling stations and recover the costs of the investment from customers. Utilities must win approval from the Colorado Public Utilities Commission, which still regulates rates. Status: Passed
UPDATE: The description for Senate Bill 77 was corrected on May 6, 2019 to clarify that public utilities are the ones that can invest in charging stations, not the Commission. The growth in Colorado EV sales was corrected to reflect that EVs made up 3.5% of market as of March 2019, nearly double from 2017.