'Tesla wants stricter emissions rules'
[ref http://electric-vehicle-discussion-list.413529.n4.nabble.com/EVLN-Oh-my-aching-bent-CA-ZEV-mandate-tiny-carmakers-get-a-Big-Break-tp4676054.html EVLN: Oh my aching bent CA-ZEV mandate> tiny-carmakers get a Big-Break ] http://www.autonews.com/article/20150615/OEM11/306159943/tesla-takes-on-industry-in-california Tesla takes on industry in California Gabe Nelson June 15, 2015 EV maker takes on industry in defense of Calif. mandate "The inconveniant truth is that oru success has revealed the weakness of the mandate." -- Diarmuid O'Connell, Tesla Motors PALO ALTO, Calif. -- First Tesla Motors Inc. went up against car dealers, waging a state-by-state campaign to protect its factory-owned showrooms from franchise laws. Now it's ready for another statehouse scuffle -- this time, against other car companies. Three years after California imposed rules requiring 15 percent of cars sold in the state to be zero-emission vehicles by 2025, automakers are asking for deep changes, including permission to comply with the mandate using plug-in hybrids instead of pure electric vehicles and fuel cell cars. But Tesla, which sees California's mandate as a crucial driver in its quest to take EVs such as the Model S into the mainstream, won't let that happen without a fight. "The mandate is already far too weak," Diarmuid O'Connell, Tesla's vice president of business development, said in an interview last week at Tesla's headquarters here. "I don't think it was ever conceived that a pure-play electric car company like Tesla could exist, let alone thrive, but we have. The inconvenient truth is that our success has revealed the weakness of the mandate." To satisfy California's rules, the six car companies that sell the most cars in the state -- Fiat Chrysler, Ford, General Motors, Honda, Nissan and Toyota -- must either sell a certain number of ZEVs or buy "credits" from companies such as Tesla to make up their shortfall. A second batch of the market's second-tier players, including Hyundai, Mercedes-Benz and Volkswagen, will face the same requirements starting in 2018. With a midterm review slated to begin in 2016, some automakers have started asking regulators to replace the ZEV mandate with a new formula based on miles traveled on electric power, or "e-miles," so they can comply simply by selling more plug-in hybrids. Tesla sees that as a cop-out. To defend the rules, it has started openly challenging its rivals in Sacramento, ditching the usual decorum of lobbying, in which companies press for their own interest but steer clear of criticizing the competition in public. This approach was on display May 23, during a hearing of the California Air Resources Board in the capital. At the hearing, Tesla openly fought a plea for leniency from a group of smaller automakers, including Mazda, Subaru and Jaguar-Land Rover, which had argued that their size was keeping them from putting pure EVs on the market. Those companies have "access to the same financial markets that enabled Tesla to raise all of the funding it needed to launch electric vehicles," Ken Morgan, Tesla's director of business development and government affairs, testified during the hearing. The problem, Morgan said, is not that the rules are too strict but that they are too lenient, with too many ZEV credits being made available to automakers. He said all automakers could comply from now until 2022 without changing their product mix at all, simply by using their existing credits -- and until 2023 if they bought credits from Tesla to supplement their stockpiles. Morgan said that raises the prospect that only 600,000 electric cars would hit California's roads by 2025, well shy of Gov. Jerry Brown's goal of 1.5 million. Tesla's claims drew pushback from other automakers. Relying solely on available credits would be a foolish strategy, critics argued, because the standards get much stricter in 2024 and 2025, and no one can predict where they might go in the years beyond that. "No one agrees that there is a surplus of credits," said one executive from a car company that has lobbied against Tesla on the issue. "All they care about is protecting their market to sell credits," the executive said. Tesla does stand to gain from a stricter mandate. The company reported $152 million in revenue in 2014 from sales of ZEV credits, 5 percent of its total revenue. But speaking to analysts in May, Tesla CEO Elon Musk characterized that income as "not a big deal." O'Connell told Automotive News: "Credit revenue used to move the needle at Tesla. It doesn't anymore, and it hasn't for some time. ... What is a strategic driver of the company is to put as many EVs on the road as possible, whether they're ours or whether they're produced by other manufacturers." As the midterm review unfolds next year, environmental groups say Tesla's outspoken stance may make it tougher for California to weaken the mandate. "I don't think California is going to roll back the standards," said Simon Mui, an environmental advocate who runs the California vehicle program at the Natural Resources Defense Council. "Now that we have leaders within the industry with a competitive advantage in EVs, it's a very different game than it was 10 years ago." Tesla lacks the money and size of other automakers, but it does have a passionate fan base and a political advantage as the largest manufacturer in California. "We know that the facts support us, and we've got a pretty big megaphone," O'Connell said. "As long as we stay credible, people will pay attention." [© Crain Communications] http://www.csmonitor.com/Business/In-Gear/2015/0620/Why-Tesla-wants-stricter-emissions-rules Why Tesla wants stricter emissions rules By Stephen Edelstein, GreenCarReports June 20, 2015 Zero-emission vehicle rules in California will become stricter soon, and some carmakers are already requesting changes. Tesla Motors, meanwhile, is openly opposing its competitors on the issue, arguing that the California mandate should be even more stringent. [image] / George Frey/Reuters/File A man charges his Tesla Model S at a charging stations in an empty lot at a new Tesla dealership across from a traditional car dealer in Salt Lake City California's zero-emission vehicle (ZEV) rules will become more stringent soon, extending to more carmakers and requiring more battery-electric or hydrogen fuel-cell cars to be sold. While the new set of regulations won't take effect until 2018, carmakers have already requested changes that could make the rules more lenient or easier to comply with. And that doesn't sit well with one company that's earned significant benefits from the zero-emission vehicle mandate: Tesla Motors. The company is openly fighting other carmakers over the issue, arguing that the California mandate should be made stricter. "The mandate is already far too weak," said Tesla's vice president of business development Diarmuid O'Connell, in a recent interview with industry trade journal Automotive News. "The inconvenient truth" is that Tesla's success "revealed the weakness of the mandate," O'Connell said. From 2012 through 2017, the zero-emission vehicle rules apply only to the six top-selling carmakers in California: Fiat Chrysler, Ford, General Motors, Honda, Nissan, and Toyota. While the Nissan Leaf is the bestselling electric car in the world, the other companies have built "compliance cars" that are sold only in volumes large enough to meet the rules. But in 2018, the mandate will extend to a new tier known as the "Intermediate Vehicle Makers"--those with global annual revenue of less than $40 billion. That includes Jaguar Land Rover, Mazda, Mitsubishi, Subaru, and Volvo, which collectively issued requests to modify the ZEV rules to the California Air Resources Board (CARB), which oversees them. Beginning in 2018, the rules will also mandate increases in the sales volumes of qualifying vehicles--by 1 percent for each following year. Last month the board issued a notice that it plans to allow these carmakers to use plug-in hybrids to meet the requirements. Tesla does not like that idea, something that was made abundantly clear during a May 23 CARB hearing. Going against the social mores of lobbying, Tesla openly attacked the proposal made by other carmakers. The smaller carmakers "have access to the same financial markets that enabled Tesla to raise all of the funding it needed" to build electric cars, testified Ken Morgan, the company's director of business development and government affairs. Morgan said the current rules could allow carmakers to meet them solely by purchasing ZEV credits from other makers, rather than actually building zero-emission cars. He said their existing stockpiles of credits could allow all carmakers to comply with the rules through 2022 without building a single car. And they could extend that moratorium for another year after that if they bought additional credits from Tesla. The Silicon Valley electric-car maker is already the largest seller of ZEV credits. The company received $152 million from the sale of ZEV credits last year, according to its financial reports, or about 5 percent of its total revenue. CEO Elon Musk characterized this as "not a big deal" in a talk with analysts in May. Other carmakers dispute Tesla's claim, saying that it would be foolish for them to rely solely on ZEV-credit purchases. If nothing else, they argued, standards beyond 2023 are bound to get stricter, but no one can yet predict by how much, meaning how many additional credits they will need in future years. 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