Industry, California clash over ZEV plan

Automakers and California regulators are locking horns over the state's plan to increase sales of alternative-fuel vehicles, making it one of the most contentious issues in talks on 2017-25 federal fuel economy standards.

Since May, the two sides have privately debated whether California's pending zero emission vehicle plan should be superseded by the U.S. corporate average fuel economy program.

The California plan, if adopted this year, would require automakers to meet sharply higher requirements for sales or pay fines. Nine other states, including New York, New Jersey, Massachusetts, and Maryland, also follow California's ZEV rules.

Automakers want California to abandon its program of requirements for electric vehicles, hybrids, and hydrogen fuel-cell cars.

The California Air Resources Board says it will continue the program. But CARB has shown signs of flexibility on aspects of the program in the past week or two, manufacturers say.

The automakers want California and the nine other states to work solely within national fuel economy targets.

"A single national program allows us all to devote our maximum efforts on focusing on carbon dioxide reductions rather than devoting efforts to the extra challenges of meeting a patchwork of state regulations," says Wade Newton, a spokesman for the Alliance of Automobile Manufacturers, whose members include Toyota and the Detroit 3.

California regulators have stood behind the ZEV program. It is being modified this year for the seventh time since 1990.

"We need to get on a path where advanced technology vehicles dominate," said Tom Cackette, CARB chief deputy executive officer. "We have no intention of backing away from ZEV."

30 percent of U.S. sales
California and the nine other states that comply with ZEV account for 30 percent of U.S. vehicle sales, Cackette said. Under the federal Clean Air Act, states have a choice of adhering either to U.S. or California emission standards.

The dispute has complicated talks among the automakers, California, and the White House over the 2017-25 fuel economy standards. Automakers are seeking a single national fuel economy program, which they achieved for the first time with the 2012-16 targets.

The Obama administration wants to propose standards by the end of September--around the same time CARB staff is to recommend major changes in the ZEV program--and give final approval by July 2012.

The White House recently asked automakers to make technology, cost, and sales projections based on a 56.2 mpg target for 2025.

The most controversial issue--other than treatment of California's ZEV program--has been automakers' request for a graduated schedule of annual fuel economy increases during the nine years. The administration, with the backing of environmentalists, had been considering consistent yearly increases.

The ZEV program currently requires 1 percent of all new-vehicle sales to be alternative-technology cars and light trucks, Cackette said.

For large manufacturers--the Detroit 3, Toyota, Honda, and Nissan--the individual requirement is based on a percentage of the automaker's sales in the state.

More alt-fuel vehicles
Under the program being considered, sales of alternative-fuel vehicles would account for 5.5 percent of all new-car sales in 2018 and 14 percent in 2025. By 2050, all new-car sales would have to be alternative-fuel vehicles.

The group of manufacturers that would face the most stringent requirements would be expanded to include BMW, Daimler, Volkswagen, Hyundai, Kia, and Mazda.

To avoid paying fines, about 15 percent of each large manufacturer's sales would have to be plug-in hybrids, EVs, or hydrogen fuel-cell vehicles, said CARB spokesman Stanley Young.

In talks with California, manufacturers have focused on ZEV compliance by the nine other states, most of which are in the Northeast.

Automakers have objected to having to meet EV sales targets in cold-weather states without much recharging infrastructure, which would discourage sales.

Among the ZEV options being discussed by automakers: setting an infrastructure threshold that each state has to meet before sales requirements kick in.

Said CARB spokesman Young: "We are currently considering a variety of suggestions, but no commitments have been made."

(Source: Automotive News)