The Zero-Emission Vehicles standard adopted by California and 9 other states to date requires a “tune-up” if plug-in electric vehicle market growth is going to continue, according to a new report commissioned by the NRDC.
Apparently, without improvements to the current credit program, the number of plug-in vehicles sales over the coming years will fall well short of those included in the program’s goals and in the plans of various state governors employing the standard, according to the Shulock Consulting report.
As noted in the NRDC’s coverage, as it stands, “just one successful electric vehicle startup — Tesla Motors — could produce enough zero-emission vehicles to meet the entire auto industry’s requirements through 2025 with some moderate sales growth.” This is owing to the fact that “a multitude of ‘extra credit’ provisions are diluting the number of vehicles the auto industry will be required to deliver by more than a third.”
Without the aforementioned tune-up, the report argues that the following results can be expected:
- The number of vehicles resulting will fall well short of the program’s goals and those established by the ZEV state governors. Automakers will only need 6% of their new vehicle sales annually to be electric-drive under the standard by 2025, versus the original 15.4% goal. Some automakers already met or exceeded a 6% sales level in California as early as last year.
- In California, only 1 million electric vehicles must be sold through 2025 to meet the ZEV standard, well short of the more than 1.6 million expected. Across the eight ZEV states that established the joint target of 3.3 million, only 2.1 million electric vehicles need to be sold by 2025, more than one-third less than intended.
- Even moderate growth for Tesla Motors could result in that one single company meeting the entire auto industry’s ZEV obligations. Under this scenario, the standard would become “non-binding” for other manufacturers who could simply comply through purchasing credits.
With regard to actions that can be taken, Shulock Consulting recommended:
- Stricter requirements around “extra credits:” The standard allows automakers to receive additional credits based on an inflated, highly favorable “urban-only” or city-driving range rather than real-world range. This can result in “range inflation” of 40% or more. For example, a battery-electric vehicle that achieves 84 miles real-world currently receives crediting assuming 127 miles, based on urban-only driving.
- Adding a protective floor: To ensure the program results in real deliveries each year, automakers should be required to comply with some portion of the requirements with actual vehicles (produced either by themselves or others in that year), rather than historic, banked credits. This will help ensure that — outside of unforeseen events — no automakers are relying solely on past credits or able to pull plug-in vehicle model offerings off the shelf if they’ve hit their compliance target.
Quick fixes like these could ensure the program stays on track to meet the goals of the states. The Air Resources Board, together with other ZEV states, has a great opportunity over the next year to demonstrate continuing leadership to accelerate the ZEV market.