SB 278 will undermine Delaware’s EV goals

June 4, 2024

President Biden has a lot on his plate. But anyone who cares about Delaware’s electric vehicle goals ought to take a look at a controversial giveaway to franchised auto dealers winding its way through Dover right now.

I’m talking about Senate Bill 278 – an auto dealer-backed plan that will do two things for sure: undermine Delaware’s EV goals, and frustrate drivers by increasing costs and harming service. 

Let’s start there: with the consumer.

SB 278 requires an automaker to fully reimburse an auto dealer in Delaware for the cost of investments it makes to sell EVs. The dealer just has to say EV sales aren’t sufficient for them to earn a reasonable return on those investments. 

The bill lets auto dealers not only back out of existing agreements with auto manufacturers to sell EVs, but also be paid back for the cost of any EV parts, tools, equipment or charging infrastructure. 

So what? That’s between automakers and their dealers, right? 

Here’s how it would play out if this became law. Say a customer buys an EV from a Delaware auto dealer. Six months later, the dealer exercises SB 278’s no-questions-asked return option and sends back the parts and infrastructure and other investments it made to get the dealership ready and authorized to sell and service EVs. 

What happens to the EV customer now that the dealer changed their mind and decided to get out of the EV business? Where do customers go to have service performed under warranty if their dealer no longer has the necessary tools or equipment? What happens if there’s a safety recall? 

Dealers already have an exclusive right to sell new vehicles – and protected market areas so there aren’t too many stores in a concentrated geographic area.

But if Delaware auto dealers – with all those government protections – won’t sell or service EVs, it will force consumers to take a pass on EVs or go outside the state to purchase and service the same vehicles the state is now mandating. 

Yes, mandating. That’s the second part of this equation – the part at odds with Delaware and Biden administration policy. 

Six months ago, Gov. Carney and the Delaware Department of Natural Resources and Environmental Control backed the adoption of California’s Advanced Clean Cars II EV standard.

This policy requires 43% EV sales in Delaware by 2027 and 100% EV sales by 2035. EVs were 8.8% of new vehicle sales in Delaware at the end of 2023 (16th in the country) and behind the national average of 10%. There’s still a ways to go. 

Major increases in the sale of EVs in Delaware is a policy that lines up with EV sales goals just adopted nationally under the Biden administration’s EPA greenhouse gas emissions rules that also start in 2027. 

Meeting any of these targets in Delaware is highly unlikely if automakers can’t rely on Delaware’s dealers to sell EVs to consumers.  

The future is electric. Automakers are committed to EVs.

But SB 278 is a bad idea that will undermine the ability of automakers to sell EVs in Delaware, increase costs for existing or future EV drivers, and jeopardize the state’s EV sales and carbon reduction goals. 

Delaware legislators: Don’t pass it.

John Bozzella
President and CEO
Alliance for Automotive Innovation
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