Under a recent loosening of the rules, the California Air Resources Board decided that automakers with less than $40 billion in annual global revenue would be allowed to offer a plug-in hybrid for ZEV credits, beginning in 2018. Jaguar Land Rover, Mazda, Mitsubishi, Subaru, and Volvo lobbied the organization, saying that their relatively tiny development budgets didn't make it possible to meet the original mandate. Larger companies are required to offer a fully zero-emissions model in order to continue selling vehicles in California.
Tesla utterly dismisses the argument of the smaller automakers. They "have access to the same financial markets that enabled Tesla to raise all of the funding it needed," Ken Morgan, the company's director of business development and government affairs, said, according to The Washington Post. The one compromise under CARB's new rules is that if these PHEVs don't sell in sufficient numbers, the companies would need to buy ZEV credits in the state.
Things would be much more strict if Tesla could get its way because the luxury EV maker would seem to prefer even fewer ZEV credit-eligible vehicles on the market. According to Morgan, the company already has enough credits alone to keep every automaker compliant through 2022, and that's without building one more vehicle. Tesla has been a big winner from the state's trading system, though, and last year, only Nissan barely edged it out in selling more.