Anyone who believes battery-electric or hydrogen fuel-cell vehicles don’t have a future greatly underestimates the bullheadedness of Californians. This special breed of American lives in a state wracked by drought, choked with traffic, and bisected by a fault zone. Yet Californians think there’s no better place to be.
For further proof of Californians’ obstinate nature, note that the small but growing market for zero-emission vehicles (ZEVs) there has been 24 years in the making. After spinning its wheels in the GM EV1 era, the California Air Resources Board (CARB), which regulates state air quality, has finally found the traction to effect a major automotive and cultural shift with its ZEV mandate.
The question is, which one of these technologies (battery-electric vehicles (BEVs) or hydrogen fuel-cell vehicles (FCVs) will win in the long run?
BEVs were first out of the gate, but hydrogen fuel cells are just now starting to close the gap. Honda, Toyota, and Hyundai will offer FCVs to private individuals in Southern California by the end of 2015. Hydrogen’s recent surge is more than a happy accident, though. While CARB claims its policies are technology-neutral, the regulations that influence what automakers build, combined with state incentives, will soon give hydrogen some ammo in its war with batteries.
To give both BEVs and FCVs a fighting chance against gasoline, California’s ZEV mandate attempts to do what free-market forces cannot: coerce manufacturers to build expensive and unproven cars. That is, without an established supply base, before the refueling infrastructure is in place, with no economies of scale, and with no guarantee of turning a profit. It’s a grand social-engineering experiment, but policymakers also see it as necessary. Passenger cars and light-duty trucks are responsible for roughly half of the petroleum consumed and 17 percent of the greenhouse gases emitted in the United States. California’s regulators believe we can’t address climate change without cleaning up the car.
California manages the ZEV mandate using its own version of Monopoly money known as ZEV credits. Automakers earn different types of credits for the different types of automobiles they sell in the state, including ZEVs, plug-ins, hybrids, and low-emission internal-combustion cars. Through 2017, the largest automakers—Fiat Chrysler, Ford, General Motors, Honda, Nissan, and Toyota—must earn ZEV credits equal to 3 percent of their California sales, with requirements for plug-ins, hybrids, and low-emission vehicles equal to another 11 percent of sales. ZEV credits become real money when CARB starts its annual accounting of credits and manufacturer obligations. To make up for a shortfall or to cash in on an abundance of credits, carmakers can buy or sell them from and to each other. If they fail to come up with the necessary credits, they face a $5000 penalty for every one they’re short. So far, no company has paid a penalty.
These deterrents reach beyond the borders of the Golden State. By law, California is the only state in the union permitted to create its own emissions regulations that supersede federal requirements. Other states, however, are allowed to adopt the rules California creates. To date, the ZEV mandate has been co-opted by Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont.
Continue reading the original article in Popular Mechanics.
