BILL ANALYSIS Ó
AB 2502
Page 1
Date of Hearing: May 1, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 2502 (Blumenfield) - As Amended: March 22, 2012
PROPOSED CONSENT (As Proposed to be Amended)
SUBJECT : AUTOMOBILE SALES CONTRACTS: ELECTRIC VEHICLES
KEY ISSUE : SHOULD ANY CHARGES FOR ELECTRIC VEHICLE CHARGING
STATION EQUIPMENT BE ITEMIZED AND DISCLOSED ON VEHICLE SALES
CONTRACTS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill would revise the automobile conditional sales contract
law to allow electric vehicle charging stations to be sold with,
and financed as part, of an automobile purchase, with a required
disclosure regarding charges that must be itemized, including
materials, wiring, and equipment installation. These EV
charging stations are currently sold by third-party vendors
separately from the purchase of the vehicle. Supporters believe
that allowing car dealers to sell EV charging stations and
finance them as part of the vehicle purchase will promote the
sale of electric vehicles, which it is believed will reduce
carbon emissions for the good of the global climate. The bill
has no opposition.
SUMMARY : Revises the automobile conditional sales contract law.
Specifically, this bill adds a required disclosure regarding
charges that must be itemized on an automobile conditional sales
contract to show any charge for an electric vehicle charging
station, including materials, wiring, and equipment
installation, which shall be labeled "EV Charging Station."
EXISTING LAW imposes various licensing and regulatory
requirements on dealers of motor vehicles and requires that
certain fees and charges be disclosed in a conditional sales
contract for the purchase of a motor vehicle. (E.g., Civil Code
section 2982.)
AB 2502
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COMMENTS : The author explains the reason for the bill as
follows:
After years of development, we are on the exciting
forefront of a new technology: electric vehicles.
California has a goal that by 2025 zero-emission electric
or plug-in hybrid vehicles will account for 15 percent, or
one in seven, new cars sold in California.
For decades, the challenge has been to develop a battery
that can provide a long driving time and also be charged
quickly. Electric vehicles are currently sold with primary
chargers which can require up to 20 hours to fully charge
the battery. However, drivers can also purchase a
secondary charger called a "Level 2 Charger" which can cut
the charge time by more than half.
State law governs which accessories may be financed with a
car's purchase price. Unfortunately, current law does not
allow these Level 2 Chargers to be financed with the car.
As Level 2 Chargers cost more than $1,000, this provides a
significant barrier to purchasing not only a Level 2
Charger, but an electric vehicle itself. Without a
secondary charger, the consumer will have to deal with
significantly longer charging times which may make owning
an electric vehicle impractical. AB 2502 addresses this
problem by allowing consumers to finance the Level 2
Charger and electric vehicle together, in one transaction-
making it easier for Californians to own these vehicles.
According to supporters, electric vehicles currently on the
market come with primary chargers which allow the cars to plug
in to a normal electric outlet, which require hours to fully
charge the battery. Level 2 Chargers (so-called secondary
chargers) are also available for purchase. Most of these
secondary chargers are charging stations that can be installed
in the car owner's place of residence. These secondary chargers
use 220 to 240V to charge the car battery and thus, can reduce
the charge time by more than half. There is no place on the
conditional sales contract to document a charge for such an
item. Supporters believe this provides a barrier to car buyers
who are interested in purchasing an electric vehicle, and the
secondary charger along with it. Although the buyer can finance
the price of the car, they must find alternative financing to
purchase the secondary charger - which, for many, is the feature
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that would make owning an electric car feasible (due to reducing
charging times). The author states that car manufacturers do
not, themselves, manufacture Level 2 chargers. They instead
partner with third party businesses and recommend that
purchasers of their electric vehicles purchase Level 2 chargers
from specific vendors.
As the foregoing makes clear, secondary Level 2 chargers are
neither necessary for the operation of electric vehicles, nor
are they a component of the vehicle itself. They are a separate
product sold by a variety of electrical equipment manufacturers,
not unlike other after-market additions such as fuel or
performance enhancement equipment, that some buyers may wish to
purchase for their convenience and enjoyment. What makes EV
charging stations unique for the purposes of the conditional
sales contract, however, is that they are a separate electrical
appliance that is typically installed in the buyer's home,
usually by an electrician.
Because they are not currently an allowable item of the
conditional sales contract, EV charging stations cannot be
combined in the financing of the vehicle purchase. Therefore it
is believed that dealers rarely if ever sell these products
currently, although Nissan apparently requires the purchase of
an EV charging station with the purchase of its "Leaf" electric
vehicle through Nissan's exclusive contractor, unless the buyer
signs a waiver certifying that she has installed her own
charging equipment. Indeed because an electrician is generally
needed to install these devices, a car dealer who wished to sell
these devices would presumably need to arrange for installation
as Nissan apparently does, and as the bill would permit, unless
the buyer were to purchase the device from the dealer only to
find that additional installation costs must be incurred to make
it operational. It appears that the current price of a basic
Level 2 EV charging station is approximately $800 without
installation. Although this is a level of expense that many
consumers may feel they can pay without going into additional
debt, or could potentially charge to a credit card rather than
wrapping into the financing of the vehicle, this bill may help
promote competition that leads to future price reductions.
Of course, one of the reasons current law is as prescriptive as
it is regarding contract disclosures and itemization is because
of historical concern about car dealer sales practices. It may
be noted that electric cars are currently an emerging product at
AB 2502
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the higher end of the market with a small number of relatively
sophisticated buyers. Thus, allowing dealers to package a
separate product with the vehicle, and allowing them to be
financed together, may be of less concern in these circumstances
than it might otherwise be for other products and other market
segments. If this bill becomes law it will be instructive to
take note of dealer practices as this electric vehicle market
matures.
Author's Technical Amendment. To better convey the intent of
the measure, the author proposes the following useful amendment:
(F) Any charge for an electric vehicle charging station, which
shall be labeled "EV Charging Station" and may include
materials, wiring, and equipment installation , each of which
shall be separately itemized . and shall be labeled "EV Charging
Station."
REGISTERED SUPPORT / OPPOSITION :
Support
Alliance of Automobile Manufacturers
California New Car Dealers Association
Opposition
None on file
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334