A July 21, 2016 study prepared by Shulock Consulting for the Natural Resource Defense Council presents the impact of recent developments on the ZEV regulation. The study updates and more thoroughly accounts for factors that can affect the volume and types of vehicles required - such as manufacturers’ existing ZEV credit bank, rapid improvements in electric range, new entrants such as Tesla, and the effects of other ZEV credit flexibilities. According to the new report, the number of ZEVs required through 2025 will be smaller than originally projected in 2012 when ARB adopted the last major revisions to the ZEV program. According to the report, absent a strengthening of the program or a tightening of the ZEV credit structure, the ZEV program will deliver approximately 2.1 million electric-drive vehicles across the ten ZEV states compared to the 3.3 million goal. In 2025, this would translate to a market share of 6% of passenger vehicle sales in 2025 in California versus the 15.4% originally estimated, and 5.6% of passenger vehicle sales in 2025 in the so-called “Section 177” ZEV states.
The report states that automakers such as Tesla, even if only partly successful with its Model 3 launch, could generate enough ZEV credits to cover the entire auto industry’s ZEV portion of the requirements. The results indicate that the ZEV program may likely become “non-binding” as a regulation, and give rise to questions as to whether the program in its current form still provides the appropriate degree of technology-forcing pressure and will enable California to be on course to meet longer-term criteria pollutant and GHG reduction climate goals, as outlined in ARB’s 2016 Mobile Source Reduction Strategy. The report identifies some possible regulatory options that make it far more likely that the program will result in vehicle deliveries hitting a minimum of 3.3 million across the ZEV states and reaching 15% sales by 2025.
For a copy of the report, click here.