Zero Emission Badge on Nissan Leaf

Automakers are buying and selling zero emission vehicle credits ahead of more stringent ZEV mandates in California. The state now requires larger automakers to increase the number of zero-emission vehicles they sell, including electric, plug-in hybrid and hydrogen models. Manufacturers that manage to exceed their ZEV goals are awarded credits, which they may sell then sell to other automakers. Not surprisingly, Nissan has an abundance of credits on its table thanks to its Leaf EV, though the company has been tight-lipped about whether or not it plans to sell credits to its rivals. According to Automotive News, Tesla has already sold credits to Honda, though neither company is saying how much compensation was involved.

Automakers who fail to sell enough ZEV models or obtain enough credits face a number of penalties, including fines and limits on the number of units they can sell. A total of 11 other states adhere to California's ZEV mandate, and Automotive News reports automakers are expected to sell around 60,000 zero emissions vehicles by 2014. Regulators want that number to be 1.4 million by 2025.