Home » Stellantis Is Restricting Gas-Only Car Sales In 14 U.S. States Including California And New York

Stellantis Is Restricting Gas-Only Car Sales In 14 U.S. States Including California And New York

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Do you live in Colorado, Maryland, New York or one of the other 11 states in America that follow California’s tough emissions rules? And are you interested in buying a gasoline-only car from one of Stellantis‘ many brands soon? If so, pay attention, because some big changes with how the automaker allocates cars to those states are about to concern you.

A very happy Friday to all in Autopia who celebrate. In today’s morning news roundup as we close out the week: that item, plus a look at more (yes, more) chaos within Nissan; some surprisingly positive stats around electric vehicle adoption in America; and another blow for direct-to-consumer car sales in an important market, unless you’re Tesla, in which case you’re cool.

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Stellantis’ CARB State Crackdown

Jeep Grand Wagoneer L 2023 1600 01
Photo: Jeep

Be advised: Stellantis, whose family of brands includes Jeep, Ram, Chrysler, Fiat, Alfa Romeo and a bunch of others, is no longer allocating internal combustion-only models to the 14 states that follow California’s emissions rules—unless customers order them, Automotive News reports. That’s a very big deal.

It’s also not new news—Stellantis said it’d start doing this back in April, but we’re really just seeing the effects of it now. (And given how long some models tend to hang around dealer lots, you may not fully feel it for a long time.)

Here’s what’s going on:

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Stellantis dealer David Kelleher is taking every plug-in hybrid Jeep Wrangler he can get from the factory these days.

That’s because the automaker is no longer allocating gasoline-only Wranglers to his dealership in Pennsylvania, one of 14 states following emissions guidelines set by the California Air Resources Board that exceed nationwide standards.

Although the rules don’t require automakers to sell a certain percentage of zero-emission vehicles until 2026, Stellantis said it has stopped shipping internal combustion models to dealerships in those 14 states unless customers have ordered them. Meanwhile, dealers in non-CARB states can no longer get the Wrangler 4xe and other plug-ins without a customer order.

Kelleher said his salespeople have been trained on how to pitch the benefits of the 4xe models, which offer a performance boost in addition to fuel savings, and are selling them successfully. But he said Stellantis’ changes will have a “significant impact” on dealerships’ sales.

“We’ve learned how to sell these, and they’re not that difficult to sell,” Kelleher told Automotive News. “That being said, I still have customers that want gas.”

Stellantis is doing this, AN reports, as part of CARB’s new enforcement of tougher greenhouse gas emissions from the 2021 model year on. Stricter rules are yet coming, including zero-emission minimum sales requirements after 2026.

The CARB rules call for zero-emission vehicles and plug-in hybrids to be 35 percent of light-duty sales in the 2026 model year, 68 percent in 2030 and 100 percent in 2035.

The changes Stellantis already has made to its allocation process in anticipation of those requirements illustrate some of the uncertainty being created during the transition to electric vehicles.

Now, the challenge here for dealers is obvious enough, especially for ones in cities or areas where a customer can easily cross state lines:

Dealers in the CARB states worry they’ll be at a disadvantage if consumers start crossing state lines to buy gasoline vehicles from another store’s inventory rather than wait for a factory order. Some are working to trade for gasoline vehicles with stores in adjacent states.

“I think many of us expected when the CARB rules actually kick in in 2026 in a meaningful way that we’d have some allocation challenges,” said Brian Maas, president of the California New Car Dealers Association. “The fact that it’s happening [with Stellantis] in the middle of 2023 is a bit of a surprise. … People are going to go to Reno and Vegas and Phoenix to get ICE Wranglers, if that’s what they want.”

But other dealers kind of say it’s not that huge a deal. Several of Stellantis’ hybrid models like the Jeep Wrangler 4xe are super popular (it’s actually America’s best-selling PHEV, if you can believe it) and post-pandemic, customers are often used to ordering cars and waiting for them.

I tend to be on Team Make More Normal Cars Hybrids And PHEVs, because this is a great way to drive battery costs down, reduce emissions right now and save money on gas if going full-EV is too tough or expensive or just not your jam. And after a lot of delays, Stellantis is finally moving to electrify its lineup. If this helps more people consider a hybrid when they maybe wouldn’t have before, I say it’s a net positive—and the gas-only choice is still there. You just have to put in an order for it rather than find it on the dealer lot. Expect similar moves from other automakers down the line.

Florida Bans EV Direct Sales (Except For Tesla)

Tesla Supercharger Network
Image: Tesla

Speaking of car sales, Florida Gov. Ron DeSantis—a GOP frontrunner for president in 2024, maybe kinda sorta?—is weighing in on the direct sales model used by Tesla and other new EV startups like Lucid and Rivian. And by “weighing in on,” I mean “has banned outright” in new legislation signed into law this week. Here’s Florida political website Florida Politics to explain:

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It’s a good day for auto dealers in the Sunshine State, and not so great for motorists who’d prefer a more direct route for buying a new coupe, sedan or SUV.

Gov. Ron DeSantis signed a measure (HB 637) Tuesday banning most direct-to-consumer vehicle sales, solidifying the future viability of car-selling operations across the Sunshine State.

The measure, championed and authored by lobbyists representing the Florida Automobile Dealers Association (FADA), prohibits most automakers from selling vehicles directly to buyers.

That restriction, which goes into effect July 1, was considered a direct threat to the business model of Tesla, an electric vehicle (EV) manufacturer that — unlike other car companies — sells its vehicles online and through retail locations rather than third-party dealers.

But! Tesla managed to secure a carve-out exemption here; as Insider notes, the new law “allows electric-car companies, like Tesla, to continue selling directly to their customers without using a dealership if that’s already their established mode. Startups like Rivian and Lucid, which have followed Tesla’s lead on direct-to-consumer sales, would also be exempt.”

My read is that this law seems aimed to prevent legacy car companies—BMW, Honda, General Motors, whoever—from ever getting into the direct-sales game themselves if they wanted to in Florida.

Whether automakers want to do that depends on who you ask. Publicly they’ll almost all say they love and need their “dealer partners”; behind the scenes, some OEMs say they like and need the dealer system for sales and repairs, while others I’ve spoken to say they’d kick the franchise system to the curb if they could.

DeSantis and Florida’s legislators did Tesla a solid here, in particular, and DeSantis just announced his presidential run on Twitter with Elon Musk. (It would’ve been really, really funny, and almost Elon-esque, if DeSantis had done that announcement and then banned Tesla’s direct sales in Florida.) But even as things are rapidly changing in the car industry, car dealers still have a tremendous amount of lobbying clout and political power, especially with the Republican party dealers overwhelmingly donate to. This recent Slate article is a good read about how many of them are spooked by the EV revolution, too.

I’m not sure the dealer system is going anywhere anytime soon but it does have to evolve, because very few new players seem interested in taking part in their game.

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EV Sales Up, Again

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Automakers are cracking down from the days when many dealers (not all, of course, but this was a trend we saw broadly) gently or not-so-gently urged buyers away from EVs toward gas models. Ford, for example, mandates that EV sales are no-haggle-only.

Times are changing and that’s never more apparent than when we get the latest new car sales reports. First off, new car sales were surprisingly strong in May despite high interest rates and general economic uncertainty.

Second, EV registrations in America are now up to about 7% of our total market, at least through April, according to our friends at InsideEVs. Here’s the breakdown:

BEV registrations (select brands) – January-April 2023:

Tesla: 211,842 (up 52%) and 60.8% share (down from close to 70%)
Chevrolet – 24,689 and 7.1% share
Ford – 17,167 and 4.9% share
Volkswagen – 11,858 (up 236%)
Rivian – 9,302
Lucid – 2,298
VinFast – 83

More:

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BEV registrations in January-April 2023:

–Tesla (60.8% BEVs): 211,842 (up 52%)
–Non-Tesla (39.2% BEVs): 136,416 (up about 116% from roughly 63,000)
–Total: 348,258 (up 72%) and 7% market share (up from 4.4% in 2022)

It’s worth noting that in April alone, more than 90,000 new BEVs were registered, including over 56,000 Tesla. The top three BEV brands in the country were Tesla, Chevrolet and Ford.

It’s super interesting that Tesla’s sales are actually up while it loses market share at the same time. That says a lot about the glut of EVs entering the market. Also, from those three brands alone, the new tax incentives (which reward U.S.-made EVs and batteries and have thus left out Hyundai and others) sure are working as intended. Nonetheless, the Model Y is still the king of sales and it’s not even remotely close.

Also, if you are one of the 83 people who bought a VinFast between the start of the year and April, get in touch.

What The Hell Is Happening At Nissan?

2024 Nissan Sentra E 3
Photo: Nissan

I could be wrong, but post-Carlos Ghosn Nissan is in a supremely weird place. The future product roadmap doesn’t feel especially clear, it seems mired in a protracted renegotiation of its Alliance deal with Renault and Mitsubishi, and sales were way down last year thanks to chip shortages.

On top of that, it’s also had a ton of executive turnover and upheaval. The latest to peace out (thankfully not in an instrument case) is Chief Operating Officer Ashwani Gupta, a Harvard- and London Business School-educated native of India who came in via Renault about 20 years ago and was seen as a likely CEO contender someday. Here’s Reuters with the tea:

Gupta had clashed with Nissan Chief Executive Makoto Uchida over Uchida’s desire to close the negotiations with Renault quickly, with Gupta urging more caution over terms of the deal, people with knowledge of the talks have told Reuters.

The company on Friday said Gupta had taken key leadership positions and been a “driving force” in various alliance projects over several years resulting in many achievements. It did not further detail the accomplishments.

Gupta joined Renault in India in 2006 and later became vice president in charge of its global commercial vehicle business, a job he held until 2019 when he moved to junior alliance partner Mitsubishi Motors.

I do think a lot of Nissan’s future—and what we’re told about it—hinges on getting that Renault deal finalized because it deals with a lot of tricky matters like IP. Hopefully, they can get their marriage in order for the good of the kids (the cars.)

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Your Turn

What happens to the dealer system in the coming electric era? Does it find a way to stay the same, evolve or cede ground to more direct-sellers?

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Wil Randolph
Wil Randolph
11 months ago

Come on guys, go one level deeper. This isn’t all gas cars in the CARB states. It’s models that have a hybrid option.
So, Wrangler, GC, Pacifica, Hornet. 4 vehicles.

The wrangler and GC are more powerful and efficient than their gasoline counterparts by a country mile, and the incentives flooding into carb states make the 4XEs equal to or less expensive than Gas.

The only people pissed off should be the Federal states stuck with old product at full price. But then they get to be lazy for a while longer. It’s coming for them too, though.

Also, did you completely forget about the 250 million in emissions overages from last week?

Mr Sarcastic
Mr Sarcastic
11 months ago

The best thing for consumers is continuation of the dealership model. We don’t see the stories but look at Tesla high repair prices, low parts availability, tow across the country to an authorized repair facility and wait weeks for repairs. And for the most part higher prices from the manufacturer.

I_drive_a_truck
I_drive_a_truck
11 months ago
Reply to  Mr Sarcastic

The best thing is that the dealership model dies and right to repair laws get stronger. This eliminates both the parasitic middle-man and the single-source monopolistic pricing for repairs.

Mr Sarcastic
Mr Sarcastic
11 months ago

Well NITSA sent letters out to car manufacturers to ignore state right to repair laws so we arent getting that.

Dogisbadob
Dogisbadob
11 months ago

That dealership franchise rule with exceptions for Tesla is fairly common and has started since Tesla started expanding their not-dealers to other states. It’s not unique to Florida.

Nissan and Mitsubishi need to captive import Renaults and Dacias to sell here.
Mitsubishi Sandero
Mitsubishi Logan
Mitsubishi Twizy
Mitsubishi Kwid
Mitsubishi Duster
Mitsubishi Oroch
Mitsubishi Triton/L200
Mitsubishi Montero

Nissan Twingo
Nissan Kangoo
Nissan Trafic
Nissan Master
Nissan Navara

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