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New Right to Repair Bill Introduced: What It Means For Consumers, Automakers and Repair Shops
A U.S. lawmaker introduced a new ‘right to repair’ bill on Thursday. The legislation proposed by Illinois Representative Bobby Rush (D) takes aim at the auto industry eight years after Massachusetts enacted its own legislation that sent shockwaves through the industry. Rep. Rush announced the bill with comments highlighting the struggle over who has access to data as autos inch closer to becoming driving computers.
“Americans should not be forced to bring their cars to more costly and inconvenient dealerships for repairs when independent auto repair shops are often cheaper and far more accessible. As cars become more advanced, manufacturers are getting sole access to important vehicle data while independent repair shops are increasingly locked out.”
The new administration has already brought this issue back into the spotlight. In 2021, President Biden issued an executive order directing the Federal Trade Commission to take action on right to repair. The current administration is looking for ways to reach across the aisle. Representative Rush’s new bill might become a rare glimpse of bipartisanship. A spokeswoman for Rep. Rush told Automotive News that Republican support for the bill is expected soon.
How Does the New Right to Repair Bill Impact Consumers?
It’s important to remember that this proposed legislation is just now entering the revolving circus that is government in 2022. It remains to be seen if the 2022 ‘right to repair’ bill will ever end up on President Biden’s desk. If it does get enacted into federal law, how does the consumer stand to benefit?
In the vast majority of markets and scenarios, dealer service centers will charge more than independent repair shops for automotive maintenance. Often, dealership service managers make money off of the services they recommend to you. That’s simply the work-for-commission model.
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While dealership service centers have their benefits, the savings of going elsewhere are hard to overlook. If cars become so complex that repair shops can’t keep up with the tech, consumers will have no choice but to go to the dealership. That’s probably what most dealers want to happen, and it could become reality sooner than later. That’s the motivation behind the perennial ‘right to repair’ movement. Ultimately, consumers will save on repairs if pricing competition continues to exist between dealers and small repair shops, as it has for decades.
Dealers Are Upset
Automaker and dealership alliances thought they were done with the ‘right to repair’ stuff. Back in 2014, associations representing both automakers and independent repair shops agreed to a ‘memorandum of understanding’. This MOU that was seen as a compromise that could settle their differences. The MOU was inspired by a 2013 Massachusetts ‘right to repair’ law. No other state has passed its own ‘right to repair’ bill since then, which was seen as a success of this landmark agreement. The 2014 MOU gave shops in all states the same access to diagnostic and repair information.
Still, the automaker lobby group Alliance for Automotive Innovation touted the success of the 2014 agreement following the announcement of the new legislation. Robert O’Koniewski, Executive Vice President of the Massachusetts State Automobile Dealers Association, didn’t mince words with the perspectives he shared with Automotive News.
“If this has been such a problem nationwide under the 2014 MOU between the vehicle manufacturers and the independent repair community, why has not one other state passed a RTR law to protect repairers and car owners in their own states?”
Independent Repair Shops Benefit
Representative Rush’s new legislation and Biden’s executive order would give independent repair shops the upper hand. At a time when cars are getting more loaded with tech every model year, repair shops are struggling to adapt. It costs money to acquire the necessary equipment to run high-level diagnostics and make repairs to electronics in newer models.
Associations representing key players in the automotive aftermarket and repair industries have come out in support of the latest legislation. Both the Auto Care Association and the Automotive Aftermarket Suppliers Association have publicly shared their support.
Right to Repair for EVs?
Does your local repair shop service electric vehicles? As of 2022, chances are they don’t. Opinions vary, but the general consensus is that 40% of American auto sales will be fully electric in 2030. Will consumers be cornered into returning to the dealer service center for EV maintenance and repairs? Or will the latest push for ‘right to repair’ laws extend to the coming onslaught of electric vehicles? Behind the scenes, repair shops and dealers are in a tug of war over the future of maintenance.
Current data shows that electric vehicle maintenance costs are less than their gas equivalents. Still, millions of EVs will eventually need some work done. At CarEdge, we hope that lawmakers and industry leaders prioritize the consumer as the pace of change accelerates through this decade. We’ll update this page as the new ‘right to repair’ legislation crawls through congress.
Dealer profits Are Out of Control! How Is This Possible With No Inventory?
As you meander through the empty lot at the dealership, don’t you dare feel sorry for them. Vehicle inventory is still at all-time lows, and we all know why (it’s the chip shortage!). But dealerships are in the business of making money, and the pandemic and associated bottlenecks have forced dealers to get creative with how they generate revenue. New data from J.D. Power shows that dealers have gotten TOO GOOD at making money at the expense of the consumer.
In January 2022, total profit per vehicle is up to $5,138. That’s five grand in pure profits for every customer that signs on the dotted line. In January of 2021, dealer profit per vehicle sold (PVR) was more reasonable at $2,169 per sale. That’s an unprecedented 137% jump year-over-year.
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This is the fourth straight month with average PVR over $5,000. J.D. Power estimates the increase in profits per vehicle sold was enough to offset losses from reduced inventory. The analysts also predict that dealerships’ aggregated new-vehicle sales profit will rise to $4.3 billion, up 117% from 2021.
Why Are Dealer profits Up 137%?
Where do we start? Dealer markups masked as ‘market adjustments’ are at record-highs, and will continue to be as long as consumers are willing to pay the prices. Incentives are on the way out. Gone are the days of big incentives slashing thousands of dollars off the MSRP.
Unfortunately, consumers carry some of the blame. Data shows that car buyers are financing vehicles for longer and longer terms. The average car loan is now for a whopping 67 months. That’s over five dozen months of paying interest. With the average monthly payment for a new car now at $636 (!!!!!) per month, this isn’t looking good for consumer finances.
If you finance your purchase through a dealership, they will make money on the loan. Car dealerships offer something to lending institutions that you and I can’t: volume. Generally speaking, car dealerships get access to loans at rates that individual consumers can’t. Dealers then mark up these loans and resell them to customers. In the end, the consumer pays more interest and the dealer smiles all the way to the bank.
Keep in mind that you don’t have to get your car financed through a dealership. The next time you buy a car, you should consider getting a pre-approval on a loan from another lender, in addition to seeing what the dealer is able to quote you.
Next time you meander through a sparse dealer lot or step into the F&I office at the dealership, don’t feel obligated to shell out extra cash to line their pockets. Their bank accounts are doing just fine.
What If I Really Need to Buy Now?
That’s why we’re here. CarEdge is your team of consumer advocates. Our goal is to provide the consumer with the negotiating know-how to take control of the car buying process. We have experienced auto sales experts on the team, and a welcoming community of thousands of members. Check out caredge.kinsta.cloud to learn more. Now is not the time to go it alone at the dealership!
Tesla Recalls 817,000 Vehicles, Yet Retains a Major Advantage
As the South Korea Automobile and Research Testing Institute was running new Tesla models through routine tests, engineers noticed a problem. Under certain conditions, the chime for not wearing a seatbelt would not activate. Specifically, if the chime was interrupted during the previous driving cycle, the chime would not sound if the seatbelt was not buckled during the next vehicle start. Tesla says the seatbelt chime still functions properly over 14 mph. In typical Tesla fashion, this Tesla recall has an easy fix for drivers.
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Automotive News reports that the recall affects 817,000 Teslas, including some 2021-2022 Model S and Model X, 2017-2022 Model 3, and 2020-2022 Model Y vehicles. Considering that only 24,964 of the 936,172 vehicles Tesla sold in 2021 were Models S or X, the vast majority of the recalled vehicles are Model 3 and Model Y.
Not a Big Deal?
A recall affecting nearly one million vehicles would cripple most automakers. Tesla is shrugging it off with an over-the-air software fix. With the launch of the Model S back in 2012, Tesla was the first automaker to design and produce vehicles with full OTA update capabilities. Tesla doesn’t just update infotainment remotely like the competitors are just now getting around to. They regularly update powertrain dynamics, battery performance and just about everything except the rubber on the wheels.
For this ‘massive’ recall, there will likely not be a single trip to a Tesla service center. Tesla owners will receive a notification about a needed software update, and with Wi-Fi connectivity, the car will fix itself. These really are driving computers that can go 0-60 in two seconds.
GM, Ford, Volkswagen and just about everyone else in the industry are now equipping new models with over-the-air update capabilities. However, it will be a few years before these automakers are able to send OTA updates to customers that go beyond infotainment and navigation. For years, legacy talking heads like Bob Lutz dismissed Tesla’s staying power. Now, it seems they’re frantically racing to catch up.
Is Tesla too far ahead of the rest? Will other automakers succeed at bringing OTA capabilities to their lineup? How does the consumer factor into all of this? Let us know in the comments below, and see what others have to say at caredge.kinsta.cloud/community.
GM profits Tank in 2021. Can GM Leverage EVs to Increase Income?
GM continues to sink under the weight of the chip shortage. It’s hitting all automakers, however the latest numbers from GM reveal the extent of the impacts. Automotive News reported that General Motors’ net income is down 39% in the fourth quarter to $1.7 billion. On the bright side, GM achieved a record full-year operating profit. That’s no surprise if you’ve been on the market for a GM vehicle.
GM’s Operating profits Are Thanks to Higher Prices
In 2021, GM’s annual net income surged 56% to $10 billion. GM’s income is up despite the fact that total vehicle sales were DOWN by 13% over 2020 to 2.2 million. The automaker met previous projections with adjusted earnings of $14.3 billion. Total revenue increased 3.7% to $127 billion.
Although total sales and quarterly profits were down, vehicles sold for much higher prices. In the fourth quarter, GM’s average transaction price was $50,149. That’s up 15% year-over-year. At CarEdge, we’ve been pointing out the disappearance of incentives as dealers and automakers look to squeeze every dollar out of every sale. In Q4, incentives fell 65 percent to $1,813 per vehicle, according to TrueCar.
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GM cited lower-margin cars as a contributing factor to profit declines. Could this be a side effect of the massive capital investments in electric vehicles? probably. All those batteries and rolling computers can’t build themselves…yet. GM plans to spend $35 billion in just four years on electrification.
As 2021 came to a close, GM had just 199,662 vehicles in stock or in transit to dealers. That’s less than half of what GM had this time last year, and one-third of inventory at the end of 2019.
Looking Ahead: 400,000 EVs in North America, More profits
The automaker said it expects its 2022 adjusted earnings “to remain at or near record levels,” between $13 billion and $15 billion.
General Motors CEO Mary Barra sees electric vehicles as essential to GM’s growth strategy. Automotive News reported that GM aims to deliver 400,000 EVs in North America through 2023. During the recent quarterly shareholder meeting, Barra reiterated the automaker’s commitment to spending $35 billion on electric vehicle development by 2025. She said that this will culminate in the launch of 30 EV models globally by the end of the same year.
General Motors finds itself in a bit of an odd situation. profits are down by 39%, yet they’re selling vehicles for a lot more money. If the chip shortage fades away quickly (as unlikely as that may be), would GM shoot to the top of the pack? We’ll learn a lot about GM’s path forward as Q1 progresses.
What Is Electrify America? The Charging Station For All
Some may think of electric vehicles as a concept of the future, but over 2 million EVs are already on American roads. By 2030, that figure may exceed 5 million. Where will all of these EVs juice up on road trips? Say hello to the gas station of the future. Charging stations are growing as more automakers commit to electrification.
Among the key players in EV charging is Electrify America. With roots in the 2015 dieselgate debacle, Electrify America is out to show the masses that electric cars are accessible and convenient. Maybe you’ve even seen their glowing green stations in your local Walmart parking lot. Who knows, you might find yourself at an Electrify America station sooner than you think.
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Let’s cover the basics of Electrify America:
- How much does Electrify America cost?
- What is Electrify America’s pricing?
- Where are Electrify America charging stations?
- And so much more!
Let’s dive in.
What Is Electrify America?
Electrify America is the rebranded name for the initiative that Volkswagen created and funded as part of its 2016 settlement with the United States Environmental protection Agency and the California Air Resources Board. VW was caught red-handed cheating on emissions tests for millions of diesel cars sold in the US. Remember when everyone had to sell back their cool Golf TDI? VW hit rock bottom in 2015. As part of the $2 billion punishment, Volkswagen is prohibited from branding the charging network as a VW enterprise.
So here we have it, Electrify America! Storied past aside, EA is now a large and rapidly growing player in the world of electric vehicles. Despite initial skepticism, EA showed it was serious by following through on their initial goal of adding 2,000 DC fast chargers within a few years. An average of four EA stations were opened every week since the official debut of Electrify America in May of 2018. Now, EA is embarking on the next stage of growth.
Who Can Charge at Electrify America Stations?
Good news! Any electric vehicle model can plug in at Electrify America charging stations. Even Teslas can charge here, despite having their own exclusive Supercharger network. Tesla may have a walled garden for its customers, but EA is open to all. EA stations include several CCS plug types, which work with nearly all EV models. The stations also have a CHAdeMO plug, which only the Nissan Leaf uses as of 2022.
Plug-and-charge is a convenience feature popularized by Tesla, but now spreading among automakers. Considering Electrify America’s Volkswagen roots, you’d think plug-and-charge would be a given for VW electric cars. Not so, at least not yet. However, it looks like automakers are at fault here, not EA. The 2022 Ford Mustang Mach-E already offers plug-and-charge, saving time and hassles for owners. GM says it will soon, but not by the time Cadillac Lyriq deliveries begin this year.
Charging Speeds
Electrify America charging stations are installed with future-proofing in mind. The vast majority of stations are capable of supplying the latest EVs with up to 350 kW charge speeds. In 2022, only a few EVs are capable of such rapid charging. The Hyundai IONIQ 5, Lucid Air and Porsche Taycan are a few examples. If your EV only accepts slower charging speeds, Electrify America certainly has the power you need to juice up.
How Much Does Charging At Electrify America Cost?
Some lucky EV drivers will have some amount of free charging at Electrify America. The Volkswagen ID.4, Hyundai IONIQ 5, Polestar 2 and even the Lucid Air all come with two or three years of complimentary charging at EA.
Electrify America pricing is determined by the following price tiers. Customers can either pay $0.43 per kilowatt-hour of electricity, or become a Pass+ member for just $4/month and charge up at $0.31 per kWh. For the Ford Mustang Mach-E with the standard battery, a full charge will cost about $21.00 as a Pass+ member, but $30.00 as a guest.
Having such an affordable membership plan is an interesting approach. It almost seems like Electrify America is aiming to become a subscription that everyone with an EV will buy into for a sense of range security, even if they rarely use the network. Learn more about Electrify America pricing and how much it costs to charge an electric vehicle at home or on the road here.
Where Are Electrify America Stations Located?
After an extremely fast build-out, EA now has chargers in 47 states. Only North Dakota, Wyoming and West Virginia have yet to receive EA chargers. Some states have many chargers. Metro areas like Washington DC, Atlanta, New York City, and of course all of California have a high density of EA charging stations.
A large number of EA stations are located in Walmart parking lots. Others are at Target stores, shopping malls, gas stations, and other frequented stops. With the new federal push for a national EV charging network, highway rest areas may soon get their own charging stations.
As of early 2022, Electrify America has 710 charging stations active in the US. Over 100 more are on the way soon. Three-quarters of existing charging ports are of the CCS type. The remainder are CHAdeMO-type plugs, almost exclusively for the Nissan Leaf. The rest of the EV world has moved on from CHAdeMO.
Here are all of the Electrify America charging locations as of early 2022. Future stations are in gray.
Source: Electrify America
The 2025 Boost Plan: 1,800 Stations and 10,000 Chargers By 2025
Electrify America’s original goal was to have about 800 charging stations and approximately 3,500 individual chargers in the U.S. by the end of 2021. As you can see above, they clearly exceeded that ambitious goal. Now, EA is looking ahead to their 2025 Boost Plan. The new plan calls for increasing the total number of charging stations to more than 1,700 and 9,500 individual chargers by the end of 2025. Soon, all 50 states will be home to EA charging stations. For me in West Virginia, that can’t come soon enough. It’s a charging desert out here in the hills.
Tesla Superchargers
With so much competition arriving in the electric vehicle segment, buyers have far more options than they did just a few years prior. Back in 2018, it was Tesla, the Chevy Bolt and the Nissan Leaf that were selling in big numbers. Now look at the list of every EV on sale in 2022. Consumers have options! And by the time Electrify America’s 2025 Boost Plan is carried out, EV sales are expected to make up at least 12% of total vehicle sales.
Still, Tesla continues to lead electric sales by a large margin. Tesla drivers can charge at Electrify America stations if they bring their own plug adapter. Unfortunately, only Tesla cars can plug in at the sprawling Tesla Supercharger network. Tesla’s proprietary network of exclusive chargers just reached a major milestone. As of late 2021, there are 30,000 charging stalls at over 5,000 locations worldwide. One-sixth of those charging stations were built in the latter half of 2021 alone. In the US, there are nearly 1,000 Supercharger locations, a figure that is rapidly growing.
Tesla also has a level 2 Destination Network at tourist destinations, hotels, restaurants and other destinations. Soon, there will even be a Megacharger Network to support the coming Tesla Semi. Rumors abound that Tesla will open up the Supercharger network to non-Tesla cars, as they have already tried in select European countries. Until that officially happens in the US, Superchargers remain off limits to Ford, GM, Hyundai and every other automaker’s EVs.
Tesla Superchargers are not free. In fact, charging will cost $0.28 per kilowatt-hour of electricity in most markets. Learn more about how much it costs to charge an electric vehicle in our recent report.
How Does Electrify America Compare to Tesla or a Gas Station?
Clearly, electricity is cheaper than gasoline, no matter where you plug in:
| Cost of Charging to 100% at a Tesla Supercharger | Cost of Charging to 100% at Electrify America as a Member | Cost of Charging to 100% at Electrify America as a Guest | Cost of Filling up an 18 Gallon Tank of Gas at $3.25/Gallon |
| $22.96 | $25.42 | $35.26 | $58.50 |
CarEdge’s Take
The automotive industry is commiting to EVs. With nearly half a trillion dollars committed to EV development this decade, is this a ‘too big to fail’ moment? However, what good are EVs if there’s nowhere to charge them? Actually, over 80% of electric vehicle charging happens at home. Still, road trips would be dead if automakers electrify without having public fast chargers as widespread as today’s gas stations.
Aside from the Tesla Supercharger network, Electrify America is the best shot we have at rapidly building out a DC fast charging network across America. Automakers, utilities and even the federal government are currently figuring out how to grow charging infrastructure in America. The recent National EV Charging Summit highlighted those efforts, and also the immense challenges ahead. Electrify America’s 2025 Boost Plan offers a glimpse of the electric future to come along American highways.
What do you think? Will Electrify America and the growing Tesla Supercharger network be enough for EVs to comfortably reach the forecasted 30-40% market share in 2030?
