Vermont Legislature SmartTranscripts:

[Timothy R. Corcoran II (Vice Chair)]: I landed a day early.

[Patricia McCoy (Member)]: And

[Timothy R. Corcoran II (Vice Chair)]: there it is. Today is Wednesday, 04/08/2026 in house transportation. We're gathering back up this afternoon, and we are going to start with an update on vehicle sales in Vermont and trends and information that's happening out there related to vehicles and obviously our big interest in what that produces in purchase news tags and registrations and inspection, all the other connectivity that happens out of this marketplace. So welcome back to the committee, Matt, and we are anxious to hear what's going on out in the sales world, in the vehicle world, etcetera.

[Matt Cota (Meadow Hill; witness)]: Yeah, thank you so much for having me. Just for a point of reference, my name is Matt Cota, and I work for a company called Meadow Hill. And among, the entities that we represent include the Vermont Transportation Energy Network, which is a division of the Vermont Retail Grocers Association representing motor fuel marketers across the state, and the Vermont Vehicle and Automotive Distributors Association, which represents the car and truck dealers here in Vermont. And of course, the nexus is the cars and trucks that we sell and the fuel that we provide, and the fees paid by our customers who buy those cars and trucks represent significant portion of the transportation budget. So we're hoping to do well, so we do well to raise money for the transportation budget. But here's a snapshot of where we are as of March 31. We look at new vehicles registered in Vermont. The last three months have not been good. In fact, they've been bad. To reorient yourself, this is vehicles registered new in Vermont, data collected from Experian AutoCount assembled by our team at Meadow Hill for the Vermont Vehicle Index. And this does not necessarily mean they were purchased in Vermont. They could have been purchased in New Hampshire or Florida, but they were registered new in Vermont. And so when you look at the rolling average and where we're at for the first three months, sales are down. What are they buying? Seven out of 10 cars uses gasoline. The next largest category of powertrain is gas electric hybrid. Those are cars without a plug, but get significantly higher miles per gallon than traditional internal combustion engine vehicles. And that's been the trend for the last couple of years. If you look at 2024 versus 2025, again, new vehicles purchased and registered in Vermont. Gasoline has gone down, as did BEVs, as did PHEVs. Hybrid electric vehicles, conventional hybrids, are the only category to increase year over year from 2024 to 2025. And certainly, we're seeing that in the 2026 numbers through the first three months. Look at the top 20 new vehicles by make registered in Vermont, Toyota, Subaru, Ford, Chevrolet, Honda, always in the top five. And that is also true for the first three months of 2026. When you look at the vehicles by model, Subaru

[Timothy R. Corcoran II (Vice Chair)]: takes Nope, sorry. You're too fast for us. I know you deal with this all the time and we don't only see it once in a while. But I don't know your Take Take a a longer long time. Break for us slow learners.

[Matt Cota (Meadow Hill; witness)]: I always find this interesting. I don't know how relevant it is to the discussion. But certainly when you look at the top 20 makes in Vermont represented by Vermont local dealers who have franchise agreements with the manufacturers that you see listed here, this is what we're seeing on the roads. And this is what was sold and registered new in Vermont from January through March, the first quarter of the year.

[Timothy R. Corcoran II (Vice Chair)]: Can you go back one more? Yeah, sure. Back to that one. '24, we did see this before, but it's like 800 plus new in the HEVs, but doesn't versus 400 drop there and 700 drop there. I'm just looking at the number of 800 versus what else does it make up for, but it's not necessarily.

[Matt Cota (Meadow Hill; witness)]: No, this data Thank is you for that. I only show it just to reference that, yes, we've sold less cars in 2025 than we did in 2024. But conventional hybrid vehicles, again, vehicles without a plug, but that get significantly higher miles per gallon than conventionalized vehicles are increasing.

[Timothy R. Corcoran II (Vice Chair)]: Thank you. And

[Matt Cota (Meadow Hill; witness)]: then your top 10 models, the significance here, and this hasn't changed, but five of the top 10 models sold in Vermont from January through March were, in fact, light duty trucks, not cars. If you look at the year to year comparison, excuse me, from January to March, the '25 to 26, both new and used, there you see the drop, about 18.5 fewer new vehicles sold in Vermont in the 2026 versus the 2025. But we're actually selling fewer excuse me, selling more used vehicles. These are, remember, used vehicles that are registered in Vermont. They could have been bought in New Hampshire, but these are new to you, meaning they were registered for the first time in Vermont as a used vehicle. So this wouldn't include, for instance, the renewal of a car that you already have. So these are vehicles purchased, used, and registered in Vermont, down on new vehicles, up on used vehicles, which obviously used vehicles, not always, but the vast majority of time can be more affordable with a lower price point than new vehicles. So

[Timothy R. Corcoran II (Vice Chair)]: that's 1,600 less new vehicles. Is there an average price on new vehicles? Just more

[Matt Cota (Meadow Hill; witness)]: of I don't have that information, but it's something I could get. I'll add it The to

[Timothy R. Corcoran II (Vice Chair)]: amount of economic activity that's substantially less. 1,600 new vehicles at all costs, I'm sure a new vehicle is somewhere north of 40,000 or $50,000 and 1,600 vehicles is a pretty good chunk of economic activity dropped, without even mentioning whether it's 6%, but I was just curious. So then a thousand used vehicles does it at a much lower price. Anyway, just looking at the activity is mostly still there, but the value of it is less.

[Matt Cota (Meadow Hill; witness)]: Yeah, that's a very good data point and I know my team, including Mike Smith, probably watching this back at the office. We'll write that down, we'll make sure we have that updated for you. And if you look at the rolling average for used vehicles, this is going back twenty seven months. You can see where we stand in terms of used vehicle sales. Used vehicle sales, by the way, our rule of thumb is they represent 60% of all sales. We sell more used vehicles than new vehicles, and that includes most of the used vehicles are sold by new car dealers. Again, the used vehicles by make registered in Vermont January through March 2026, some of the familiar brands at the top of the line. And then when you look at by model, very familiar as well. Again, half of them are trucks. Here's what I think is really important, or at least I found it interesting, which is how Vermonters pay. So when you buy a car, you can lease it. Well, when you acquire a car, you can lease it. You can pay cash or you can finance it. And there's lots of different financing mechanisms. But when you look at leasing, if you look at all vehicles, leasing represents about 11%. And when you look at electric vehicles, this is, again, January through March 2026, just the last quarter, leases represent 30%. And that's about right. If you think about why one might want to lease a vehicle, your payments are lower as if you had to finance the entire vehicle. You're only leasing it for a set term, whether it's twenty four months or thirty six months. And it also gives an opportunity to try a car that you may not if you know exactly what you want to drive and you want to drive that car for ten years, you're going to buy it. But if you're maybe not sure, like for instance, is an EV right for my lifestyle? You might lease it. And that's one reason and a pretty good reason why leasing electric vehicles is higher than the overall average of all vehicles. However, this is the slide that you may have seen before, but it's still remarkable. The next one. Sure. Jeanne,

[Timothy R. Corcoran II (Vice Chair)]: can repeat question for you?

[Matt Cota (Meadow Hill; witness)]: Oh, sure. Yep.

[Patricia McCoy (Member)]: On the previous slide, Matt, what is 36% unknown? Like, what is that?

[Matt Cota (Meadow Hill; witness)]: Well, to me, it's unknown.

[Patricia McCoy (Member)]: I know. It just seems like, what could it be? It's not a lease, a cash, or finance.

[Matt Cota (Meadow Hill; witness)]: Yeah. This might be a this data comes from Experian AutoCount. And again, I'm going to write that down, Representative McCoy, and see if they can break out more what that means. You're right. That is a pretty heavy number to be unknown.

[Patricia McCoy (Member)]: That's a lot on all the Yeah. EED has 21%. It

[Matt Cota (Meadow Hill; witness)]: might be because this data is so fresh. It's just in the last three months that they I don't know. I'll find out. That's a good question. Thank you. You. Unknown is significantly less when we look back historically. This is last year, January through December 2025. And here's what's significant. So leasing for all vehicles, pretty constant, 32% here from 2025. But leasing for electric vehicles January through December 2025 was 70%. That's remarkable. That number just jumps out. And there's a very good reason why. The same reason I cited before, people aren't sure if EVs are going to fit their lifestyle, would prefer to lease rather than buy. But it's also because the $7,500 federal tax credit, that tax credit which expired on September 30, starting in 2024, you could put that federal tax credit towards the lease. So that combined with very attractive offers from manufacturers and from dealers and these are how Vermonters pay led to very attractive lease rates because of the tax credit, because of manufacturer incentives, and because of local incentives, ended up that we had a lot of leased vehicles, 70% of the battery electric vehicles sold or registered by Vermonters in 2025 were leased.

[Timothy R. Corcoran II (Vice Chair)]: Another factor in that is probably just the battery itself, Just the unknowns of how long it's going to last. People don't want to sort of be tied into owning it when the battery could go in X amount of years. I think personally that's a huge consideration.

[Matt Cota (Meadow Hill; witness)]: That absolutely could be too, Representative Corcoran. I think they should feel comfort in that most batteries are under warranty. So if they do fail within two or three, I think they have up to ten years to be replaced. But the money offers were I mean, you may have heard ads talking about $100 $200 a month payments on a brand new electric vehicle. Those have largely gone away, but those absolutely drove people get electric vehicles. And you can see it way back in January 2024. These are new battery electric vehicles registered in Vermont by finance type. January 24, so we're looking back twenty seven months. And you can just see, lease. People are leasing electric vehicles. Now the obvious conclusion is what's going to happen with those vehicles, right? We're talking twenty four to thirty six months. And then the person that makes those lease payments has to make a decision to buy out the vehicle or return it to the lot. They return to the lot, then it can then be resold as a used vehicle on that lot, or it could be put on a truck, a tractor trailer truck, and sold at auction. Here's what, now this is an original thought. Obviously, comes from, I read the trades and automotive nudes is one of the best trades for understanding what's happening in this landscape. And they use data from Experian Automotive much like we And this came out last week. But as two to three leases expire, and you just saw all the leases that we had here in Vermont, EVs expect to account for nearly 15% of off lease used vehicles. That's nearly double where they were in the

[Timothy R. Corcoran II (Vice Chair)]: first

[Matt Cota (Meadow Hill; witness)]: quarter. That's going to continue for the next year. In other words, while we certainly have heard the headlines that manufacturers have made decisions about their investments in new EV models, the reality is that the leases that have come off are certainly going to influence the used car market for the next two years. How that will shape whether Vermonters will choose to buy more used electric vehicles or not. Have no my crystal ball is fuzzy on that one. But there's certainly, from all indications here in Vermont and across The United States, where we have seen those attractive lease deals expire, that will result in more used vehicle used EV vehicles. And if you think about EVs and their trajectory, we have about 20,000 electric vehicles registered in Vermont now as opposed to 520,000 total vehicles. As we get more used vehicles in the system, they'll become more affordable. And that could mean a good thing for those that want to buy a more affordable or a lower cost EV. And it will also tell us whether or not they have the longevity of these vehicles. How will it affect gasoline? That's the other thing we look at, the Vermont Fuel Index. Not very much. The biggest drop in gasoline happened during a global pandemic. And if you look just isolate, so our sales are down 1% of gasoline in Vermont, but they're 3% below the ten year average, even with that big drop during the pandemic. Diesel sales, about 2.5% down. Diesel and gasoline sales, as you've been told by joint fiscal, aren't going down, but they're not going down perhaps as dramatically as we might have thought years prior. If you just isolate January and February we don't have the March numbers yet, but if you just isolate January and February, Vermont motor fuel sales, for the first two months of 2026, gasoline sales were about half a point higher than the five year average. Diesel sales about three percentage points lower. How this will be impacted? Now, is all data from before the war in Iran, before prices increased to 30% to 40% depending on the fuel in the region and, how that will impact sales, I'm very interested in knowing. But we won't have that data for March sales until, the April. And of course, all this is updated either weekly or monthly at vermont10.org, which is the website we maintain to show transportation information. Thanks. Appreciate your time. I'm happy to answer any questions.

[Timothy R. Corcoran II (Vice Chair)]: Matt, with the, I guess the price of price is the biggest issue, I suppose. Outside of that, what's going on in our end, or it can't be avoided, what is the move, the expectation, the forecasting as your auto dealers look at spring coming and headed to the summer? I mean, is what's the what's the general you know, are they gonna they anticipate a rise, a drop? What's the perception of the industry in Vermont, where we're headed?

[Matt Cota (Meadow Hill; witness)]: Well, there's no question that rising gasoline prices spur interest in hybrid electric vehicles and battery electric vehicles. Absolutely. And you see that through you can read that in national trades, and you can hear it anecdotally from local dealers. And as these EVs come off lease and go back to those dealers, that interest is important because a consumer has to either decide whether or not to purchase the vehicle that they have leased for the past two to three years, or if they want to purchase something new, or if they just want to take the bus and ride a bike. And the dealer has to make a decision whether or not to then purchase that vehicle at the rate, a previously agreed upon rate or whether or not to give it back to the manufacturer, which is their right as the local dealer too. And we don't know these answers yet. And of course, it will change based on make and model and individual dealers and region. But all of this will sugar off here in the next year. And it may mean we have much more, those new leases that came out over the last twenty four months, they may be acquired by other Vermonters and used here. We don't know yet.

[Timothy R. Corcoran II (Vice Chair)]: What are your new car dealers doing in terms of their inventory and their hedging their bets, bringing a little bit less, a little bit more, about the same as always? Inventory on new car sales on their lots. What are Vermonters finding when they go to lots? Is it full? Is it scaled back? What's going on?

[Matt Cota (Meadow Hill; witness)]: Yeah, there's not a shortage of It was not like COVID where there was a shortage of vehicles and you saw empty lots. Certainly not the case. But as inflation, dealing with inflation, higher prices, higher interest rates, all these play a factor, in dealer decisions about how to fill their lots with vehicles.

[Timothy R. Corcoran II (Vice Chair)]: Anybody else have any questions about what's happening in the vehicle sales world and the resulting purchase of news? Representative Casey. Now, are new car dealers lot still have the they keeping their inventory levels up on electric cars? Is that changed at all with them trying to predict the future at all?

[Matt Cota (Meadow Hill; witness)]: Certainly we had, you know, last year it was it's only been nine months since Governor Scott's executive order pausing the advanced clean car regulation, which will require manufacturers to deliver to Vermont 35% electric vehicles with concessions for any credits previously earned. In you know, that was But we weren't gonna make that mark. And so we supported that executive order. And then, of course, a month later or two months later, President Trump rescinded the ability for California, Vermont, and other states to require car manufacturers to deliver battery electric vehicles under the advanced clean car regulation. So there isn't that push clearly that there was before when automakers were ostensibly had either buy credits or move those vehicles. However, there's still significant interest in battery electric vehicles, before the increase in gasoline prices. As I've said before, the percentage will go up and go down, but I think the floor is about 10%. 10% of our monitors will want to drive better electric vehicles, and that will slowly increase as the technology improves. But we're going to need gasoline powered cars and gas stations, and we're going sell gas for another fifty years, in my opinion.

[Timothy R. Corcoran II (Vice Chair)]: Other questions? I think Logan's not gonna be here till 02:30, so he got twenty minutes. Got a twenty minute break. We are adjourned.