EVs Popularity To Rise Outside California, Thanks To Arcane ZEV Rule

FEB 15 2019 BY BRADLEY BERMAN 47

The travel rule for ZEV credits is no longer in effect.

A total of 11 states now follow California’s zero-emissions regulations. So why has the vast majority of growth in EVs taken place in the Golden State in recent years?

Here’s one reason: the California Air Resources Board has allowed automakers to use zero emission vehicle (ZEV) credits from EV sales in California to satisfy ZEV obligations in those other other states. However, the provision that allowed credits to “travel” to other states ended with 2018 model-year vehicles.

Voila! Folks in the following 10 states, starting this year, can expect greater availability and selection of electric vehicles: Colorado, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont. Of course, how automakers meet their obligations – either by selling more cars or buying credits from other companies – remains to be seen.

Double the Obligation

“Starting this year, manufacturers must meet their ZEV obligations within these states,” said Elise Keddie, manager of ZEV implementation, in an interview with InsideEVs. “In effect, it doubles a manufacturer’s obligation because it must meet California numbers plus Maine, Massachusetts, and so on.”

The credits are still pooled among Northeast states. And credits for fuel-cell vehicles can still travel to and from California.

The ZEV rules and its credit system are complicated so I asked the bottom line question: “Does the change in the travel rule mean that manufacturers will sell more EVs outside of California?”

“Yes. Exactly,” replied Keddie.

Changes in the rules over time are based on California’s overarching strategy – to evolve ZEV regulations as the market changes. “The credit program is designed to move slightly ahead of the technology,” said Dave Clegern, public information officer at CARB.

Clegern explained that when conventional gas-electric hybrids reached a reasonable market penetration, that technology was written out of the ZEV regulation. Plug-in hybrids today earn partial ZEV credits but could also one day no longer be included.

The same evolution of the regulation applies to geography. The travel provision helped promote a strong penetration of electric cars in California partly because automakers could use sales in EV-friendly cities like San Francisco and Los Angeles to comply in, for example, east coast states. Now it’s time to stimulate bigger electric-car sales numbers in the Northeast, Oregon, and Colorado (as well as other states that might sign on to ZEV rules).

“The ZEV credit program doesn’t operate in a vacuum,” said Clegern. “California is a proving ground for American automakers and others because we’ve been doing this for so long. But you have other market forces and the rest of the world to consider.”

Clegern said that to meet California’s long-term climate goals about 90 percent of cars sold in ZEV states will need to be zero-emission by 2050.

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47 Comments on "EVs Popularity To Rise Outside California, Thanks To Arcane ZEV Rule"

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One thing unanswered by this article is how this will impact companies that are sellers of ZEVs, such as Tesla.

It stands to reason that if a traditional automaker cannot or does not want to sell enough vehicles in the other states, they could buy Tesla credits that were earned in those states. As such, it may lead to Tesla selling more credits because they have surplus credits everywhere.

“it may lead to Tesla selling more credits” AND possibly at or near full face value. This could help Tesla cover any minor losses in future earnings. This may move the stock price up a bit as this “rule” becomes more well known. Anyone have a megaphone??

Wait! I was planning on purchasing some TSLA early next month. Have to do it before other countries start releasing February numbers showing the Model 3 crushing it in Europe…

Thought those credits are value less and only pressure is fine of not having it (as scarcity is pretty much not a problem for lagging oems)

The income Tesla earns by selling excess ZEV credits to other auto makers is very real money, so calling them “value less” appears to be factually incorrect.

They used to sell for 50 cents on the dollar. The Trump administration is trying to torpedo California’s right to have the ZEV program. Ergo, OEMs are not buying credits at the moment. Once the Supreme Court rules, likely in CA’s favor, Tesla will begin selling credits again.

ZEV credits will likely never trade at or near face value. Nor were they ever designed to sell at or near face value. At or near face value, car companies would choose to simply pay the full penalty and not put money in their competitor’s pockets.

ZEV credits were always designed to sell at a discount on face value as in incentive to get large companies to actually hand over their hard earned money to competitors. The idea is that fines don’t actually cut emissions, but buying ZEV credits DO actually cut emissions. One ZEV credit theoretically cuts roughly the same amount of emissions no matter who earns it, so creating a discount market as an alternative to the penalty creates an incentive to actually cut emissions instead of just paying a fine.

But it seems hypocritical. We all for transitioning to EVs but here some credits for trucks and SUVs

YES! Excellent. It was unfair to other states to allow California to get so much attention.

Now we need more states to adopt the CARB rules.

I get what you’re saying but manufacturers flooded CA because there’s a market for ev there. It will be a struggle for them to meet the sale numbers now….which can be a good thing…the dealers will have to actually try to sell evs.

I think, that it was intentional all along. Meant keeping costs down for car oems who could gradually expand service capacity and a boon to participating states as they would get EVs faster and cheaper compared to solo initiatives.

Actually, I would love to see all of the territories and Hawaii adopt the CARB rules. The islands should be on EVs combined with AE/nuclear SMRs for power.

oh, that’s smart. Wonder who put that idea together. Good! Any idea what that means in actual sales number for NE?

Not much. Big players are already selling in most ZEVs states, but mandate will get tougher and tougher.

While I think this decision is good overall, as a California resident I secretly wish that EV sales would continue to concentrate in California. The local benefits of living in an are dominated by EVs are just too numerous… I’m impatient to get to the end game. Already walking in some neighborhoods is noticeable quieter and cleaner. Please hurry.

Oh we will still get most of the attention. But it was just plain unfair that so many good EVs were not being sold in other states that would like them.

The intial stage did just that. It concentrated EVs in California. At some point, it becomes a self-sustaining eco system. With enough EVs, you could potentially operate a profitable charging network, for example.

But it’s time to share the wealth. Time to bring more EVs to other regions, like here in the Northeast. We need clean air too.

And credits for fuel-cell vehicles can still travel to and from California.

LOL. There are still no hydrogen fueling stations outside California.

And very few customers wanting fuel cell cars anywhere.

Despite the desperate anti-EV trolls and shills for big oil.

Oddly enough, I saw two (2!) today while driving. One in So Cal and one in Silicon Valley (business trip today). It’s bad enough to have to look at those ugly things, but then to be behind one and have to turn on the windshield wipers really sucks. Fortunately today it was raining…

I wasn’t aware that they produce so much water vapor.

How does that affect road icing in the winter?

If H2 vehicles were to travel in volume, we would have continuous icing on the roads?

I believe this means they can get a FCV credit in CA and use it in another state towards their EV obligation. The credit can travel.

Yes, they can sell a fuel cell vehicle in CA, and count it as if they had sold it in MD (for example) and count it as if it had cleaned the air in MD.

But it is pretty ironic.

There are no public hydrogen fueling stations outside California. There are private fleet ones. One in Michigan, one in Massachusetts, one in Connecticut and one in South Carolina.

Hydrogen infrastructure will catch up to BEV infrastructure. In about 300 years. Ha ha.

“There are still no hydrogen fueling stations outside California.”

Not true. Air Liquid completed building 4 hydrogen fueling stations in the Northeast last fall with one station in each of the following states: New York, Connecticut, Massachusetts, and Rhode Island. IIRC, all the stations were privately funded.

Air Liquide has said it would build a Northeast hydrogen-fueling network consisting of two filling and distribution centers as well as 12 fueling stations.

http://www.thedrive.com/tech/24112/hydrogen-fueling-stations-are-being-built-in-new-york-and-new-england

As one who has been peed on by a FCV I have to question their ZEV status. It’s not a lot of water, but to a motorcyclist a little water in the face seems like a lot.

Zero Emmissions! Zero, not water, not fumes, nothing! I always wondered how FCEV could be classed as ZEV when it does emit water. Now I also wonder why they don’t drain the water into the washer tank. That would be a unique selling point, never fill your washer wipers again.

Well, you think they could at least hold it until they got to the side of the road.

I heard that Toyota is working together with the maker of Depends on a solution for this problem.

“And credits for fuel-cell vehicles can still travel to and from California.“

Sure but the only H2 filling stations in the US, are in California.

“Manufacturers Obligations” – Clever but Orwellian euphemism for Gov’t dictating to Businesses the false premise that Gov’t some how knows what the Public “wants/needs”

Yes, nations and societies are built on the premise that the government knows what the public wants/needs in terms of law and order, public schools, public health, streets, bridges, highways, clean water supply, sewer systems, and other public services and public works.

You are, of course, free to move to some place like the areas of Somalia controlled by warlords, or unimproved regions such as central New Guinea, if you object to the idea of paying taxes for public services and public works.

Oddly enough, very few if any of those who complain about the government using taxes for public good seem eager to move to any region where that’s not the practice.

https://www.youtube.com/watch?v=Y7tvauOJMHo

An attempted clever Randian ploy for anarchy.

Another d-bag serial anti-EV/Tesla troll and radicalized idealog.
Crawl back to Breitbart fool, we are not buying your Koch-Heads’ Propaganda here.

I half agree, it’s an attempt at anarchy, but I wouldn’t say clever, quite the opposite.

Govt spending brought you the international computer network carrying your idiot spew now.

Markets are path-dependent, whereas governments have greater power to effect good (and ill!).

Other states need to except the sales tax on BEV to encourage more BEV sales and raise the petroleum fuel tax to pay for it..

FYI — the California CARB ZEV mandate hasn’t gone into effect in Colorado yet. So it may be a while longer for Colorado. They are still formulating final rules on how it will be rolled out.

Yes, but: Congrats Colorado! Welcome to the CARB EV mandate club.

It hasn’t even been passed yet, the ruling is in August!

Great, another effectively doubling of ZEV credits for hydrogen vehicles that already got a lot more ZEV credits than BEVs to start with because they retain the travel provision. When will CARB start promoting the outcome (clean air, isn’t that what CARB is supposed to be about/) rather than a specific technology?

This article overlooks the fact that even Tesla sales are proportionally lower in s177 states compared to california. It’s a problem with demand/ infrastructure , etc. just as much as supply. Take the clarity phev for example… its 270 a month in california and can be had for sub 200 in northeast, which is cheaper than a civic. Ignoring the market realities means we don’t spend time actually figuring out solutions.

So, this means that now even compliance cars will have to sell in decent numbers? Like 75,000/year instead of 35k/year?

Great article! Colorado, however, has not passed the ZEV mandate yet, only the LEV standard. Hopefully, that will change this year though!