Bloomberg News

California Considers Plan to Speed Battery, Hydrogen Auto Sales

January 31, 2012

Jan. 26 (Bloomberg) -- California, the state with authority to set air-pollution rules stricter than U.S. government’s, is considering a plan requiring carmakers to sell more than 1 million autos by 2025 that emit little or no tailpipe or carbon exhaust.

The state’s Air Resources Board today in Los Angeles is examining amendments to its zero-emission vehicle, or ZEV, mandate that already requires the six largest carmakers to sell battery-electric, plug-in hybrid and hydrogen fuel-cell cars. The new phase, running from 2018 through 2025, would require those companies and six more automakers to sell as many as 1.4 million such vehicles, or 15 percent of total sales, in the state in 2025.

California has pushed automakers since the 1970s to sell cleaner vehicles to reduce the state’s air pollution. Earlier state rules led to catalytic converters and exhaust treatment systems becoming standard on U.S. vehicles. State officials have said they want to repeat that by pushing automakers to offer a range of models that also emit less of the carbon dioxide created from petroleum-based fuels.

Ten other states plan to adopt California’s advanced vehicle requirements if they are implemented, including New York and New Jersey, said Roland Hwang, transportation program director for the Natural Resources Defense Council, an environmental group.

That would at least double the impact of California’s program to more than 3 million advanced vehicles being sold nationwide, Hwang said.

“We believe that’s a very reasonable total by 2025,” Hwang said. U.S. sales of such low-carbon autos would be only about 3 percent of total volume, he said.

CAFE Boost

Consideration of California’s rules come as the state and the U.S. Environmental Protection Agency match regulations for carbon exhaust and other pollutants. The Obama administration last year announced plans to double so-called Corporate Average Fuel Economy, or CAFE, standards to 54.5 miles per gallon by 2025, the biggest such increase in U.S. history.

California’s ZEV program and efforts to regulate carbon exhaust triggered lawsuits from automakers and dealers through the early 2000s. Given the new CAFE standard, automakers already plan to boost sales of advanced vehicles that would meet both state and federal rules, said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, the industry’s biggest trade group.

‘Massive Sums’

“Automakers have invested massive sums in new types of powertrains now on sale,” Bergquist said. “We still do not support mandates, because mandates create a disconnect in the marketplace.”

California’s rules only force companies to offer certain types of vehicles, not for people to buy them, she said. Electric cars may not sell in large numbers if there aren’t enough public charging stations, Bergquist said.

“Once government determines that society should move to diversify powertrains, that triggers a legitimate role, and even an obligation, for government to invest in supporting infrastructure, like making charging stations widely available,” she said.

Currently, General Motors Co., Ford Motor Co., Chrysler Group LLC, Toyota Motor Corp. Nissan Motor Co. and Honda Motor Co. must sell a combined 60,000 plug-in, battery- electric and fuel cell cars in the state from this model year through 2014.

By 2018, the state’s ZEV rules will extend to Hyundai Motor Co., Kia Motors Corp., Daimler AG, Volkswagen AG, Bayerische Motoren Werke AG and Mazda Motor Corp.

--With assistance from Lynn Doan in San Francisco, Bill Koenig in Detroit and James Nash in Sacramento. Editors: Bill Koenig, Pete Young

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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