'The compromise isn’t exactly fair on those who do make ZEVs' 'Subaru and Mazda May Be Forced to Build pih'
%It be nice if automakers changed w/o regulators forcing their hands% http://www.autonews.com/article/20150530/OEM11/306019987/california-bends-but-doesnt-yield-on-zevs California bends but doesn't yield on ZEVs Gabe Nelson Automotive News May 30, 2015 Plug-in hybrids enough to get small carmakers credits “I agree that we can get more vehicles out there, but they might not be the vehicles we thought they would be a few years ago.” -- Daniel Sperling, member of California Air Resources Board California environmental regulators have decided that even the smallest automakers will have to comply with ambitious clean-car rules that mandate the sale of zero-emission vehicles. But the state is giving them some wiggle room. At a May 18 hearing, the California Air Resources Board rejected a plea from Jaguar Land Rover, Mazda, Mitsubishi, Subaru and Volvo to be exempted from the mandate. They had argued that their small r&d budgets will keep them from developing and selling electrified cars as easily as full-line automakers such as Ford, General Motors and Nissan, which already must sell ZEVs. The board's decision makes the five smaller automakers subject to the rules beginning in 2018 and affirms Gov. Jerry Brown's goal of getting 1.5 million ZEVs on California roads by 2025. Even so, regulators did tweak the rules in their favor. Automakers with less than $40 billion in annual global revenue -- which includes Jaguar Land Rover, Mazda, Mitsubishi, Subaru and Volvo -- now will have the option to sell plug-in hybrids only to earn "credits" toward compliance, rather than being forced to sell some all-electric or [h2] cars. If they don't sell enough, they'll still need to buy credits from companies such as Tesla Motors Inc. that sell electric cars in large numbers. Tesla banked $51 million in the first quarter from selling ZEV credits to other automakers. The small automakers said they were grateful for the changes, which would help them "meet the regulations with cars, not credits," Clinton Blair, vice president of government affairs at Jaguar Land Rover North America, said during the May 18 hearing. But to some critics, the change weakened the program. Ken Morgan, director of business development and government affairs at Tesla, said there is an oversupply of credits in the market. Morgan said that just 600,000 ZEVs, well shy of Brown's goal, would be delivered by 2025 if the oversupply makes it cheaper to buy credits than to sell electric cars in California. He said smaller companies shouldn't be given a break because "they have billions of dollars in operating profit and cash on hand." It's unclear how Mazda and Subaru plan to meet their obligations under the mandate. Mazda sells no electrified cars, aside from a hybrid Mazda3 sold in Japan with technology licensed from Toyota. A new technical "marriage" with Toyota may give Mazda wider access to Toyota's [h2] and plug-in hybrid powertrains. Subaru sells a Prius-style XV Crosstrek hybrid in the U.S., but it sells no plug-ins anywhere in the world. It leased an electric minicar called the Stella EV in Japan from 2009 to 2011 but discontinued it because of weak demand. Mitsubishi, which sells a plug-in hybrid version of its Outlander in Japan and Europe, plans to launch it in the U.S. in early 2016 after a series of delays. Volvo plans to sell a potent plug-in hybrid version of its new XC90 in lieu of a V-6 or V-8. Jaguar is reportedly developing an electrified version of its forthcoming F-Pace crossover. California still may tweak its rules further during a "midterm review" due to take place in 2016. Daniel Sperling, a University of California-Davis professor and a member of the Air Resources Board, is pushing hard for a bigger emphasis on plug-in hybrids, though some of his colleagues on the board think any solution that involves using gasoline is inadequate. Sperling argued at the May hearing that hybrids with large batteries could run on electricity 80 to 90 percent of the time, while using gasoline for long road trips only. If they're also more palatable to car buyers, he said, they actually could reduce California's air pollution faster than pure EVs. "The goal should be to strengthen the ZEV program," he added. "I agree that we can get more vehicles out there, but they might not be the vehicles we thought they would be a few years ago." [© Crain Communications] https://transportevolved.com/2015/06/01/california-reaches-compromise-with-automakers-on-zero-emission-vehicle-mandate/ California Reaches Compromise With Automakers on Zero Emission Vehicle Mandate By Nikki Gordon-Bloomfield • June 1, 2015 [image] Cars like the FIAT 500e exist purely to satisfy CARB regulations It’s that very regulation which helps California have such a large range of plug-in cars for sale. Aside from the handful of automakers who make and sell plug-in cars nationwide — like Nissan, General Motors, BMW, Ford and Tesla — most automakers produce limited number of plug-in cars exclusively for sale in California and the other states which follow California’s ZEV mandate in order to satisfy that mandate. These are colloquially known as ‘compliance’ cars by the auto industry. Originally focused on high-volume automakers, the minimum ZEV requirement for automakers has slowly risen as the California Air Resources Board (CARB) strives to meet the state’s goal of 1.5 million zero emissions vehicles on its roads by 2025 as well as reduce chronic air pollution in major Californian cities like San Francisco and Los Angeles. In addition, ZEV rules have come into force for mid-volume automakers, requiring more automakers than ever before to produce zero emission vehicles — or buy the appropriate amount of credits from rival automakers with credits to spare. The latest version of the ZEV mandate — due to come into force on January 1, 2018 — will require intermediate-volume automakers to produce at least some zero-emission vehicles in order to sell in state. But for some time now, five of those intermediate-volume automakers — Jaguar Land Rover, Mazda, Mitsubishi, Subaru and Volvo — have argued that they should be exempt from the ZEV mandate due to their small research and development budgets. As Automotive News (subscription required) explains however, those pleas were rejected at a recent May 18 meeting of the Air Resources Board, meaning that each of the five automakers listed above will have to produce some form of advanced fuel vehicles in order to meet the ZEV requirements. CARB has reached a compromise with intermediate volume automakers allowing TZEV to qualify for ZEV credits. Yet in a measure that addresses some of the five automakers’ concerns, CARB has offered something of a compromise. Instead of requiring automakers with less than $40 billion in annual global revenue to produce all-electric or [h2] fuel cell vehicles in order to meet the ZEV requirements, the CARB will allow those companies to produce Transitional Zero-Emission Vehicles (TZEVs) instead. Under the agreement, cars like the Mitsubishi Outlander PHEV would earn credits. [image] Under the agreement, cars like the Mitsubishi Outlander PHEV would earn credits. It’s essentially the outcome suggested back in October last year, when those same five automakers attended an CARB hearing on softening zero-emission requirements for intermediate-volume manufacturers. Now that outcome has been agreed on, those five automakers can concetnrate on making TZEVs instead of full ZEVs. For those unfamiliar with the distinction, ZEVs produce no tailpipe emissions and are therefore powered by either electricity or a [h2] fuel cell. TZEVs include plug-in hybrids: cars with both a gasoline or diesel engine and a battery pack for limited-range zero emission use. One of the arguments made at the hearing was that in everyday use, TZEVs operate as electric vehicles, only using their gasoline engines as range-extenders. However a counter-argument to that would be that developing a dual-drivetrain vehicle is as complex — if not more so — than developing a purely electric or [h2] fuel cell vehicle. Under the rules that come into force in January 2018, intermediate-volume automakers will have to earn some of their ZEV credits through the production and sale of ZEV or TZEV vehicles. But if they don’t sell enough, they’ll have to turn to other automakers — like Tesla Motors — to buy any remaining credits needed to satisfy CARB regulations. For Tesla Motors, which sold more than $51 million worth of ZEV credits in the first quarter this year to automakers who weren’t producing enough ZEVs on their own, you’d think that the compromise would be at least a secure revenue stream moving forward. But as Ken Morgan, director of business development and governmental affairs at Tesla points out, there’s already an oversupply of ZEV credits. And if those credits become cheaper than building and selling ZEV or TZEV models in California, automakers will take the easy choice. His argument? Even intermediate-volume automakers — all of which are bigger than Tesla — have “billions of dollars in operating profit and cash on hand.” Essentially, if Tesla can make an electric car, so too can automakers like Mazda and Subaru, argue many advocates. Currently, neither Mazda nor Subaru appear to have any plans for either a plug-in electric or plug-in hybrid model for the U.S. [image] Tesla argues the compromise isn’t exactly fair on those who do make ZEVs. Jaguar Land Rover, Volvo, and Mitsubishi meanwhile, do — and we should note that Mitsubishi already sells the low-volume i-Miev electric car, which would qualify it for at least some ZEV credits ... [© transportevolved.com] http://www.cheatsheet.com/automobiles/why-subaru-and-mazda-may-be-forced-to-build-new-hybrid-cars.html/?a=viewall Why Subaru and Mazda May Be Forced to Build New Hybrid Cars Eric Schaal June 01, 2015 Among major automakers, Mazda and Subaru stand out as two manufacturers with no plug-in hybrid electric vehicles (PHEVs) in their respective lineups, and this fact could become a problem with the California Air Resource Board (CARB). According to Automotive News, a recent CARB hearing showed California regulators unwilling to exempt automakers from developing zero-emissions models. Without them in their lineups, Mazda and Subaru would either have to purchase credits from automakers or develop plug-in cars by 2018, despite their sterling reputations in fuel economy. Mazda and Subaru were not alone in appealing the rules that will require automakers to have electric vehicles or [h2] fuel cell cars on the road by 2018. Automotive News reports Mitsubishi, Volvo, and Jaguar-Land Rover joined the two Japanese companies at a May 18 CARB hearing to petition regulators to ease up mandates on smaller companies. In some measure, it worked. CARB officials conceded that small automakers could get by with plug-in hybrids rather than pure electric vehicles. With Volvo and Mitsubishi plug-ins headed to American in the next calendar year, that would not be a burden for either manufacturer. (Jaguar has an EV in development as well.) Yet Mazda and Subaru, both of which rank in the top three among automakers in total fuel economy, would be forced to purchase credits from companies flush with EV sales (i.e., Nissan and Tesla) or get their plug-in programs going. In some respects, both of these smaller manufacturers have an argument to make based on the economical lineups they produce. In the case of Mazda, the company’s Skyactiv engines deliver remarkable economy in the compact and midsize classes. The Mazda3 gets an EPA-estimated 40 miles per gallon; Mazda6’s 40 highway miles per gallon may be even more impressive. These specs allowed Mazda to claim best fuel economy of any major automaker without having a hybrid (let alone a plug-in) on the market. Subaru wasn’t far behind, placing third after Mazda and Honda with only a single hybrid vehicle on the market. If they are not guzzling gas like any of the Detroit automakers, should California be forcing them to develop plug-in models for their efficient lineups? Since it would create more economical vehicles on the road, we welcome a firm stand by CARB, but in fairness these two manufacturers are not the bad guys. For its part, CARB would do itself (and the residents it aims to protect) justice by holding the line on its plug-in requirements for the coming years. GM’s data on Chevy Volt use shows drivers are already covering 80% of their trips without gasoline. Expectations for the 2016 Volt featuring 50 miles of EV range are even higher (90% in our estimates). Barring any changes to the CARB policy, both would have to call the regulators’ bluff or pay the piper in ZEV credits. Wouldn’t it be nice if automakers invested in a greener future without regulators forcing their hands? That won’t happen anytime soon. In the meantime, we have to wonder how an automaker with six straight years of record sales can make the argument it can’t afford to develop an EV. Tesla raised the same question in a statement to Automotive News, saying smaller automakers still had “billions in operating profit and cash” they could use for the job. Maybe the little guys aren’t so little after all. 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