Going by his comments on the matter on the recent Tesla Quarter 2 earnings call, Tesla CEO Elon Musk isn’t happy with the way that the California Air Resources Board (CARB) has been handing out zero emissions vehicle (ZEV) credits.
Here are the exact words that were used: “The California Air Resources Board is being incredibly weak in its application of ZEV credits. The standards are pathetically low. They need to be increased. There’s massive lobbying by the big car companies from increasing the ZEV credit mandate, which they absolutely damn well should. CARB should damn well be ashamed of themselves.”
Not very subtle.
Related to that topic, a recent NRDC report found that the ZEV standard adopted by California and 9 other states needs a big “tune-up” if plug-in electric vehicle market growth is going to continue. Basically, the standards are far too low, despite Tesla demonstrating what’s possible.
Teslarati provides some more context, noting that, “Tesla is usually the beneficiary of the ZEV credits. In Q1, Tesla reported $57 million of Zero Emission Vehicle credit revenue. But in Q2, ZEV credits were almost negligible. Tesla didn’t even bother to break them out for its Q2 report to investors. California is expected to issue an evaluation of how the ZEV mandate is working in the fourth quarter of 2016.”
The ridiculous and unwarranted thing is that the auto industry is lobbying to lower future fuel economy and emissions standards. Again, recognize that Tesla has come to take the #1 position in the large luxury sedan market, and has taken in ~450,000 reservations for the Tesla Model 3 — demonstrating well enough that highly efficient cars can be produced and popular.
Teslarati adds: “This week, at an ordinarily mundane conference known as the Management Briefing Seminars, in Traverse City, Michigan, industry representatives reminded regulators in the strongest possible terms that the cost of meeting proposed regulations may make the price of new cars beyond the reach of many customers.” The vice president of business development at Tesla, Diarmuid O’Connell, stated that, as it stands, though, most of the electric vehicles and plug-in hybrids (PHEVs) that are available in the US currently aren’t much more than “kitchen appliances.”
A bit harsh perhaps, but there are certainly some manufacturers taking the market more seriously than others. O’Connell continued: “The roadmap to sell EVs is apparent for everybody to see. The industry is not even trying.”
We’ve detailed that point a few times. Here are two recent examples:
O’Connell then cited the (very substantial) Model 3 reservation figures as an example of what happens when a manufacturer takes the market seriously.
For its part, the California Air Resources Board (CARB) apparently has no intention of “backing away from” the standards it has set. The chief technology officer for CARB, Mike McCarthy, recently commented that the standards are intended to force the development and sale of technology that will be important in the future. “We do have a ZEV regulation. It is a mandate and we openly call it a mandate,” McCarthy stated.
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