Automakers were never enthusiastic about California's stricter air-quality rules, especially the electric-vehicle sales mandates that have been copied by nine other states. Soon, they'll have to work even harder to meet them.
Under California's zero-emission vehicle mandate, a certain percentage of an automaker's sales must be ZEVs. Automakers have been able to use partial credit from sales of hybrids and low-emissions conventional vehicles toward their ZEV quotas. But the regulations are slated to tighten in 2018 in a way that limits the impact of those partial credits and requires more sales of actual ZEVs.
That means that, if anything, automakers will have to be even more engaged in California's complex system of credits and sales-based quotas.
"As we are now closer to 2018, everyone is beginning to see that the mandate is not going away," said Devin Lindsay, IHS Automotive's principal analyst for North American powertrains.
The industry has long bristled at having to meet a layer cake of regulatory regimes in the U.S., especially when it involves selling vehicles on which they're likely to lose money. But as they become more entrenched, the California regulations have challenged automakers to work harder to get competitive EVs to the market.
And the size of the bloc now under the umbrella of California's rules makes it a market that can't be dismissed. The so-called Section 177 states, named for the legislative provision that allows states to adopt California's rules as their own, include big markets such as New York and New Jersey and accounted for 28 percent of new-vehicle registrations in the U.S. last year, according to IHS Automotive data.