The California Air Resources Board's Zero Emission Vehicle (ZEV) mandate has already created so-called "compliance cars." The corollary is a growing market for ZEV credits. That is, a way for companies who aren't selling enough ZEVs (which, in this case, include pure electric vehicles, fuel cell vehicles and ultra-low emission plug-in hybrids) can buy credits from companies who have sold too many. Wait, that sounds funny. Who have sold more ZEVs than CARB requires them to.

Unsurprisingly, Nissan and Tesla are the two companies with the most credits to offer, while Chrysler and Honda might be in the position to need to buy some. Andy Palmer, a Nissan executive vice president, told Bloomberg recently that Nissan is "in a fortunate position of having positive credit," but hasn't yet publicly announced exactly what it plans to do with the credits. Tesla has already sold some credits to Honda and an unnamed automaker. The rules don't requite public disclosure of price or number sold. If an automaker doesn't earn or buy enough credits, it has to pay a fine. According to Bloomberg, the number of credits a company earns per vehicle depends on its range and recharge time. A Leaf is worth three, a Model S equals seven. (As pointed out in the comments, the Model S would be worth four, not seven.)

The ostensible point of the ZEV rules is to increase the number of ZEVs on the road. Since California's rules are in effect in 12 states total, the expectation is that the largest six automakers will sell 60,000 ZEVs there through 2014 and then a total of 1.4 million by 2025. That's the intent, but if you want to know how CARB's rules play out in the real world, just read this and then this – oh, and this – and you'll understand.


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  • 21 Comments
      Joeviocoe
      • 3 Years Ago
      SABASTIAN BLANCO! Please edit your mistake. "According to Bloomberg, the number of credits a company earns per vehicle depends on its range and recharge time. A Leaf is worth three, a Model S equals seven." http://www.arb.ca.gov/msprog/levprog/cleandoc/clean_2009_my_hev_tps_12-09.pdf pages C-12 and C-13 Although the Model S may get over 300 miles on the UDDS (LA-4) cycle, and 'would' put the car as a Type V and thus 7 CARB credits.... It DOES NOT qualify. "Must be capable of replacing 285 miles (UDDS ZEV range) in less than 15 minutes per section" The fast charger is no where near that fast. The Model S (with the 230 or 300 mile packs) can only qualify for Type III... which is only 4 credits. It seems only Fuel Cell vehicles can get over 4 credits per car. Which is why automakers are quite a bit more ENCOURAGED to produce FCVs than BEVs. It ain't pure economics like hydrogen advocates claim... but the politics of big business influencing government which in turn, influences automakers. In this case, CARB wrote the rules to give an unfair advantage to Hydrogen over Batteries... by given more credits for an attribute that doesn't have anything to do with a reduction of emissions... but rather to fast recharge times which is just a convenience for consumers and a profit for Oil/Gas companies. ------------------------ ♦ I call this, the Hydrogen Lobby clause. ♦ The California Air Resources Board has been in the Hydrogen pocket for decades now (ever since Chairman Lloyd help kill the ZEV Mandate and thus the EV-1).
        SVX pearlie
        • 3 Years Ago
        @Joeviocoe
        Perhaps the fault is with a lack of truly fast EV chargers. It's the fault of the BEV calling a slow charger "fast", not some H2 or oil conspiracy.
        Joeviocoe
        • 3 Years Ago
        @Joeviocoe
        CARB was very meticulous to set the 'refuel time' just too fast for even the best EV Fast Chargers... thus giving FCVs an advantage. CARB basically told automakers that they will pay twice as many credits for every one Fuel Cell Vehicle as one 200+ mile Battery vehicle. This means automakers are given incentive to push R&D money away from BEVs today... in hopes for a Hydrogen infrastructure built in another 3 or 4 years. ♦ Also, if you ever wonder why automakers seem adamant to build their EVs for exactly 100 miles on the LA-4 drive cycle, knowing full well that the full EPA 5-cycle test will be much lower... it is because they get CARB credits based on LA-4 and they reach new increments at 100 miles and 200 miles (and only get 1 extra point for reaching 200 miles). Most of what we are see and hearing about automakers producing FCVs and BEVs have more to do with CARB regulations than with actual consumers demand. That is because consumer demand is not really a "factor" but only a "product" of their own advertising and marketing campaigns. They could "Manufacture Demand" if they want to by producing good marketing... instead, when they want to "discourage demand", they make stupid commercials that scare people away... you know the one's I mean. ------------------ The playing field is not as even as some may claim... it is a rigged game, and those with the most money, do the rigging.
        JakeY
        • 3 Years Ago
        @Joeviocoe
        To be fair, the bonus only lasts till 2018, after 2018 the highest number of credits you can get is 3. So Type II, III, IV, V all get only 3 credits. However, the fast refuel provision was obviously designed to give hydrogen a bonus (the specification is just out of reach of EV fast chargers). What I do wonder is if battery swapping qualifies as "fast refueling". The Model S has some swap capabilities (might not be automated and there might only be a handful of "swap stations" located at Tesla dealers, but that's really no different from the hydrogen fueling situation) that might qualify it for Type V.
      Joeviocoe
      • 3 Years Ago
      That is not so much "a practical standpoint" but a "status quo". People just don't want to change their habits. Ask any EV driver. The seconds they spend plugging in every evening and unplugging in the morning is preferred over ever spending even a few 'minutes' at a gas station. Millions of Americans already have multiple cars in their household, different types to maximize different needs (commuting, cargo space, luxury, etc.).... it is nothing for them to just have a Gas car or Hybrid as one car and a BEV as another... and NEVER, EVER spend ANY time waiting around for a recharge. There is your 'practicality'.
      Joeviocoe
      • 3 Years Ago
      Sebastian... can you please confirm and source why you think the Model S qualifies for Type V ZEV credits? The Tesla fast chargers don't recharge fast enough... does CARB actually count dealership battery swaps?
      Spec
      • 3 Years Ago
      "No, from a practical standpoint, people don't want to wait more than 15 minutes." How does that make California's air any cleaner? That's the goal. California Air Resources Board = CARB. The goal is to get more ZEV miles. Selling more cheaper EVs that can go 100 miles a day and charge up overnight will help the air get more clean than selling fewer HFCs that can be refueled in 15 minutes.
      Spec
      • 3 Years Ago
      "It's the fault of the BEV calling a slow charger "fast", not some H2 or oil conspiracy." Sarcasm? I wouldn't call it 'conspiracy' but I would call it politics. I think that giving so much credit to fast refueling time is poor policy. Most driving is less than 100 miles a day and every human sleeps, so fast-refueling is irrelevant most of the time. And I do suspect the oil & gas companies lobbied for this . . . they want to sell hydrogen from all that natural gas they have.
      Marco Polo
      • 3 Years Ago
      What's to stop a car buyer purchasing a non-complying model in a neighbouring state, thus avoiding the Californian legislation ?
      marcopolo
      • 3 Years Ago
      What a roar of outrage at the Californian legislation ! While at the present time no EV has a 300 mile/15 minute charge time, there are also no viable FCV's available to take advantage of the maximum credits either. The FCV lobby could easily argue that it's easier to develop a faster charging system for a new generation of BEV's by 2018, than invest the capital necessary to make FCV's a reality. But, in the end, is it really about whether one technology or the other wins? Isn't it more important that a environmentally friendly, renewable, economic, technology is developed ?
      SVX pearlie
      • 3 Years Ago
      I don't see the issue with transferring credits. In effect, it's like the OEMs partner for what would otherwise be a badge-engineered solution.
      SVX pearlie
      • 3 Years Ago
      No, from a practical standpoint, people don't want to wait more than 15 minutes.
      Vlad
      • 3 Years Ago
      It is fascinating how hard the notion that a car has to be refueled outside of home got stuck in our heads.
      Joeviocoe
      • 3 Years Ago
      Not a conspiracy.... a Tragedy of the Commons. Oil companies have money, our constitution guarantees the right to lobby congress... they have influence to ensure that they remain in business. I understand that fast chargers won't ever be as fast at moving energy as moving a liquid or gaseous fuel. But that is NOT a disadvantage to MANY, MANY drivers who don't need to recharge quickly because slow charging at home handles all of their needs. Instead of having the ZEV credit equal, and letting consumers choose by purchase power (the only way automakers actually receive the credit)... CARB wanted to give hydrogen the upper hand and give allow automakers sell only HALF as many FCVs for the same credits as BEVs. In California especially, with their low emission electricity generation and their dense urban/suburban population, a single BEV is going to save more emissions than a FCV will.
      JakeY
      • 3 Years Ago
      "No, from a practical standpoint, people don't want to wait more than 15 minutes." From a practical standpoint, being able to "refuel" at home is a huge convenience, but there's no bonus points for that.
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