Zero-emission mandate: Coming to your state?
California regulators expected to finalize rule this summer
California isn't the only state that soon could force carmakers to deliver a specified number of electric, fuel cell and plug-in hybrid vehicles.
Ten other states typically follow California's rules on so-called zero-emission vehicles -- some automatically, some by inclination -- and many of them could adopt the mandate once it's made final by California regulators. That's expected to happen this summer.
The rule, approved by the California Air Resources Board in January, requires 15.4 percent of all new cars sold in the state -- about 270,000 annually -- to be plug-in hybrids, electric cars or fuel cell vehicles by the 2025 model year.
Automakers will be required to sell more zero-emission vehicles each year to reach the 2025 target, starting with the 2018 model year. Requirements for each automaker have yet to be determined but they will be based on a company's size, sales volume in California and types of vehicles it plans to sell.
The new rule, part of new auto emissions regulations passed this year, toughens California's current zero-emission mandate, which has been on the books since 1990 and has been revised numerous times.
If other states adopt the mandate, the expansion could raise the bar further for automakers already struggling to sell buyers on plug-in hybrids and pure EVs, industry groups say. Last year these vehicles accounted for 0.1 percent of total U.S. sales. Hydrogen fuel cell vehicles are not on the retail market yet.
"It does represent quite a challenge to first of all meet the California regulations and then figure out how they will transfer to other states," said John Cabaniss, director of environment and energy at Global Automakers, a trade group representing import-brand automakers, including Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and Hyundai Motor Co.
"When you throw the other states in, it complicates things," Cabaniss said, noting that travel distances, the level of charging infrastructure and buyer demand for electric cars vary widely by state.
He estimates that if all 10 states were to adopt the 15.4 percent target, carmakers would need to sell approximately three times as many zero-emission vehicles than those required by California, for a total of about 810,000 vehicles by the 2025 model year.
The auto industry was hoping to avoid this predicament by throwing its support last year behind an Obama administration proposal to create one national standard for tailpipe emissions. But on the matter of zero-emission vehicles, California has continued to strike out on its own.
In some of the 10 states that have followed California's lead, rulemakers have the option to remain in lockstep. In a few others, including New Jersey and Maryland, the California rules would be adopted automatically. Bailey Wood, director of legislative affairs at the National Automobile Dealers Association, said the rule could force dealerships in those states to stock cars that buyers don't want. "Already, dealers have to accept less popular vehicles to get the ones they want," he added. "With the [zero-emission vehicle] mandate, it will be even worse."
Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said carmakers have invested billions to develop plug-in vehicles and have a financial stake in selling as many as possible.
But the industry worries that the demand won't materialize fast enough to meet California's requirements, let alone those in other states, Bergquist said. She points to the last few years of gasoline-electric hybrid sales, which have stayed flat at less than 3 percent of the U.S. market.
Dave Clegern, a spokesman for California's air resources board, said the rules allow flexibility. A federal provision permits an auto company that has trouble hitting a state's sales target to ship ZEV cars to another state that also has adopted the mandate, he said.
Also, he said, automakers that exceed federal rules can earn credits to apply to state requirements, at least initially. Gasoline-electric hybrid sales also generate credits that count toward compliance.
Clegern added: "These numbers have been arrived at it in consultation with the automakers."