California May Alter ZEV Requirements

Since the 1970s the California Air Resource Board (or CARB) has regulated vehicular emissions in the Golden State, even requiring automakers to make a certain number of electric vehicles. Green Car Reports says that sales requirements for California’s best-selling brands could be altered at a CARB meeting later this week, but to understand how this affects things, first you need a little history lesson.

Back in 1990 CARB enacted the Zero-Emissions Vehicle mandate, which required the six largest automakers to produce enough EVs make up 2% of each automaker’s total sales in California. That number was going to rise to 10% in 2003, but automakers convinced CARB to reconsider the mandate, replacing the EV requirements with low-emissions vehicle credits, which could be bought and sold between automakers. This led many automakers to essentially abandon electric vehicles and accusations that CARB was in the pocket of the car industry.

For 2012 though the ZEV requirements came back, with the Big Six (Ford, Fiat-Chrysler, GM, Toyota, Honda, and Nissan) required to build 7,600 EVs between them from 2012 to 2014, and then rising to 25,000 vehicles from 2015 to 2017. Hydrogen and electric vehicles earn automakers a full credit, while hybrids have been worth a partial credit; CARB can fine each automaker up to $5,000 for every credit it falls short, and each credit expires after three years.

For larger automakers the solution has been to roll out “compliance cars” like the Chevy Spark EV and Fiat 500e, which don’t earn automakers much (if any) money but enable them to earn most (if not all) of the ZEV credits. The shortfall is made up through purchasing credits from the likes of Tesla Motors, which used ZEV credits to earn its first quarterly profit ever last year.

But for smaller automakers like Volvo, Mitsubishi, and Subaru, building an electric car just to meet regulations is a lot costlier and more difficult. This has these so-called “Intermediate Volume Manufacturers” (IVMs) scrambling to meet the upcoming regulations requiring X amount of ZEVs, so they’re arguing they should be able to earn full credit for plug-in hybrids as well.

Plug-in hybrids are much less costly to develop and more practical for consumers, and smaller automakers don’t need to spend millions of dollars on paper credits to meet regulations. On the consumer side, California just passed six new pro-EV laws designed to encourage the adoption of plug-in vehicles, but sales still haven’t taken off the way some had hoped.

Environmentalists obviously aren’t thrilled with the proposed compromise, but these smaller automakers are also asking for more time to deliver vehicles that meet California’s stringent requirements. As the largest car market for pretty much every automaker, California has a lot of weight to swing around when it comes to regulations. You can read the proposed regulation changes in detail here.

The question is, do these automakers deserve the break they’re asking for, or have they had more than enough time to get the ball rolling on truly zero-emissions vehicles?

Source: Gas 2.