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CARB ACC 2 Regulation

On April 12, 2022, CARB issued a notice announcing that the Board will conduct a public hearing on June 9, 2022 to consider the proposed Advanced Clean Cars II (ACC II) rulemaking.  The ACC 2 rule proposes that manufacturers be required to deliver for sale increasing percentages of ZEVs and PHEVs as a portion of their overall product deliveries between model years 2026 and 2034 and reach 100-percent ZEVs in 2035 (and after). The Notice, ISOR, and all subsequent regulatory documents are available on CARB's ACC 2 rulemaking webpage.  Comments are due May 31.

The Securing America’s Clean Fuels Infrastructure Act

On March 25, 2021, Senator Tom Carper (D-Del.), Chairman of the Environment and Public Works Committee (EPW), Debbie Stabenow (D-Mich.) and others introduced legislation (S.975) to promote investments in clean vehicle infrastructure, such as electric vehicle charging stations and hydrogen refueling stations for fuel cell vehicles.

The Securing America’s Clean Fuels Infrastructure Act would improve and expand the Alternative Fuel Vehicle Refueling Property Investment Tax Credit (ITC), commonly referred to as “30C,” lowering costs for clean vehicle infrastructure deployment. Providing incentives to build the needed infrastructure to support clean vehicles, the legislation will support American consumers as they move towards more electric and clean energy vehicles.

According to the Sen. Carper, the current 30C ITC structure isn’t adequate for encouraging greater private investments in clean vehicle refueling infrastructure like electric charging stations and hydrogen refueling stations. If implemented, Securing America’s Clean Fuels Infrastructure Act would do three things:

1. Clearly state that the 30C ITC can be applied to each item of refueling property (i.e., each charger) rather than per location.

2. Increase the 30C ITC cap for business investments from $30,000 to $200,000 for each item of refueling property.

3. Extend the 30C ITC tax credit for eight more years from the December 31, 2021 expiration date, which means the 30C ITC would apply to refueling property that is placed in service by December 31, 2029.

The full text of the bill can be found here.

This legislation has broad support from the auto companies, environmental community, and industry stakeholders, including Ford, Honda, General Motors, Volkswagen, Alliance for Automotive Innovation, Electric Drive Transportation Association, the Fuel Cell and Hydrogen Energy Association, Zero Emission Transportation Association, Electrify America, EVGO, Environmental Defense Fund, National Wildlife Federation, Natural Resources Defense Council, Sierra Club, American Lung Association, Clean Air Task Force, Union of Concerned Scientists, Stellantis, Duke Energy, Volta Charging, ChargePoint, EV Box Group, and ABB.

GREEN Act of 2021

On Feb. 4, 2021, Rep. Mike Thompson (D-CA) introduced the GREEN Act of 2021 (H.R. 848).  Main features of the legislation are as follows:

• Builds on current successful tax incentives that promote the deployment of green energy technologies, while providing new incentives for activities that reduce greenhouse gas emissions,
• Encourages residential investments in green energy and energy efficiency,
• Expands incentives for energy efficiency and conservation in homes and buildings, with updated standards,
• Supports widespread adoption of zero-emission cars, vans, and buses through tax credits for purchasing vehicles, and supporting deployment of publicly accessible electric vehicle charging infrastructure,
• Invests in the green workforce by providing tax credits for advanced manufacturing facilities and mechanical insulation installations,
• Advances environmental justice using tax credits for research and other academic programs, and
• Prices greenhouse gas emissions.

Specifically with regard to EVs, the bill would expand the qualified plug-in electric drive motor vehicle credit under Section 30D to apply a new transition period for vehicle sales of a manufacturer between 200,000 and 600,000 electric vehicles (EVs), under which the credit is reduced by $500. The provision replaces the current phaseout period (which begins at 200,000 vehicles) with a phaseout period that instead begins during the second calendar quarter after the 600,000-vehicle threshold is reached. At the start of the new phaseout period, the credit is reduced by 50% for one quarter and terminates thereafter. For manufacturers that pass the 200,000-vehicle threshold before the enactment of this bill, the number of vehicles sold in between 200,000 and those sold on the date of enactment are excluded to determine when the 600,000-vehicle threshold is reached. The provision extends the 2-wheeled plug-in electric vehicle credit through 2026. It also extends the 3-wheeled plug-in electric vehicle credit through 2026.

For used EVs, the bill creates a new refundable credit for buyers of used plug-in electric cars from date of enactment through 2026. Buyers would be able to claim a base credit of $1,250 for the purchase of qualifying used EVs, with additional incentives for battery capacity. The credit is capped at the lesser of $2,500 credit or 30% of the sale price. To qualify for this credit, used EVs must generally meet the eligibility requirements in the existing Section 30D credit for new EVs, not exceed a sale price of $25,000, and be a model year that is at least two years earlier than the date of sale. Buyers with up to $30,000 ($60,000 for married couples filing jointly) in adjusted gross income can claim the full amount of the credit. The credit phases out so that buyers with below $40,000 ($70,000 for married couples filing a joint return) in AGI may be eligible for a reduced credit. Buyers must purchase the vehicle from a dealership for personal use and cannot claim the credit more than once every three years. The credit only applies to the first resale of a used EV and includes restrictions on sales between related parties.

With regard to heavy vehicles, the bill includes a manufacturer credit for the sale of zero-emission heavy vehicles starting after the date of enactment through the end of 2026. Eligible manufacturers may claim a credit of 10% of the sale price of an eligible vehicle, capped at a credit of $100,000 per sale. To be eligible, vehicles must be for domestic use, must weigh no less than 14,000 pounds, must not include an internal combustion engine, and must be propelled solely by an electric motor which draws electricity from a battery or fuel cell.

Regarding fuel cell vehicles, the bill would extend the credit for the purchase of a qualified fuel cell motor vehicle through 2026.

Regarding refueling infrastructure, the bill calls for extending the alternative fuel vehicle refueling property credit through 2026.  Beginning in 2022, the provision expands the credit for zero-emissions charging infrastructure by allowing a 20% credit for expenses in excess of $100,000 (i.e., it allows a credit for expenses beyond the current limit if certain requirements are met). To qualify for this uncapped credit, the property must: 1) be intended for general public use and either accept credit cards as a form of payment or not charge a fee, or 2) be intended for exclusive use by government or commercial vehicle fleets.

The bill has been referred to the House Committee on Ways and Means.

Full text of the bill is available here and a section-by-section summary is available here.

Regulatory and Legislative Tracking Reports for Vehicle Manufacturers and Suppliers

Since 1999, Kardos & Associates LLC has supplied the auto industry with the most comprehensive regulatory and legislative tracking reports available. We currently offer clients the following:

Motor Vehicle Safety & Emissions Regulatory Update (the REG UPDATE)

The REG UPDATE has been tracking US and Canadian regulatory activity impacting the auto industry for over twenty years. Regulations developed by the NHTSA, FMCSA, EPA, FCC, CARB, Transport Canada, and Environment Canada are the focus. For each rulemaking, the Reg Update provides a description of the rulemaking, comment deadlines, effective dates, a docket reference, and links to documents available online. Deadlines and critical path items are color-coded so that you can quickly identify what’s new and important. In addition to being an excellent tool for tracking regulatory activity, the Reg Update is a great archive of past actions. The report contains information on virtually every rulemaking affecting automakers from the past two decades. Approximately 400 pages in length.

U.S. Safety & Fuel Economy Regulatory & Legislative Update
The U.S. Safety & Fuel Economy Regulatory & Legislative Update provides a snapshot of the past month’s legislative and regulatory activities relating to safety, emissions and fuel economy. The report provides brief summaries of notices issued by DOT, EPA, CARB and others. With regard to federal legislation, the report covers newly introduced bills, information on committee hearings, etc. Activities at the state level pertaining to emerging technologies (e.g., automated vehicles, advance driver assistance systems, EVs and EV infrastructure, etc.) are also covered.

Federal Legislation Tracking Report
Our legislative tracking report focuses on matters relating to environment and energy, safety and fuel economy/climate change. The report covers two years-worth of bills (the length of each Congressional session) and includes summaries and status updates for each tracked bill. Links to bill text and related information are provided.

All of our reports are distributed monthly via email as a PDF. Subscribers also get access to an online archive of past reports.

For pricing, contact Dale Kardos at (202) 3064997 or [email protected]. For more information about Kardos & Associates LLC, see www.kardosllc.com.

For a PDF of this information, click here.

Clean Cars for America

On Oct. 27, 2019, Sen. Schumer (D-NY) announced a plan to promote electric and hydrogen fuel cell vehicles.  The plan is comprised of the following three components:

1. Cash vouchers for trading-in gas-powered cars and buying a plug-in electric, plug-in hybrid, or hydrogen fuel cell car.  Consumers wishing to trade in a gas vehicle for a new vehicle could receive a point of sale rebate starting at $3000, and ramping up based on the zero-emission range of the vehicle. Consumers with household incomes less than or equal to 200 percent of the federal poverty would receive an additional $2000 rebate for new vehicles, or a 20% rebate to purchase used vehicles built prior to the program taking effect.  An additional incentive worth an additional 50% of the base incentive would also be available for vehicles made in America with strong labor standards, as well as $500 for vehicles with 50% domestic content and a US manufactured battery.  The program would receive $392 billion in funding and replace approximately 25% of the US gas-vehicle fleet with clean vehicles after 10 years.
2. Making charging infrastructure accessible through a new grant program to states and localities to ensure all Americans have access to charging infrastructure.  The proposal includes $45 billion in funding to states, cities, and municipalities for making charging infrastructure accessible to everyone.
3. Incentives for manufacturers to build new factories or re-tool existing factories in the United States to assemble zero-emission vehicles or manufacture charging equipment.  The plan would create two new grant programs that would stimulate the regional economy, and improve the global competitive position of the United States in the electric vehicle industry by creating a robust domestic supply chain, and require that workers both building and working in the new factories make good-wages and have strong labor standards. One program would provide cash grants to manufacturers to build new factories for assembling electric vehicles, manufacturing charging equipment, or manufacturing or recycling critical component parts of electric vehicles like batteries. A second program would help reduce permanent plant closures in the U.S. by providing an additional cash grant for manufacturers that re-tool existing U.S. factories that make internal combustion engine vehicles or component parts. These programs would receive $17 billion, which is enough money to ensure that all new clean vehicles sold (including their batteries) through Clean Cars for America are manufactured in the U.S.

For additional details, click here.  

CARB Proposed Advanced Clean Trucks (ACT) Regulation and Draft Environmental Analysis (EA)

On Oct. 22, 2019, CARB released it proposed Advanced Clean Trucks (ACT) Regulation and Draft Environmental Analysis (EA) for public comment.   The proposal, if finalized, would require manufacturers of incomplete or complete vehicles > 8500 lbs GVWR with 500 or more annual sales in CA to begin to electrify their fleets starting in 2024. Fleet compliance percentages vary by year and vehicle class.  By 2030, one out of every two Class 4-8 vehicles will need to be electrified.

The rule will be considered by the Board at a hearing which will take place in Sacramento, CA on Dec. 12, 2019 starting at 9 am (PST).

Written comments on the proposal must be submitted no later than Dec. 9, 2019.

All documents concerning the rulemaking are available online at https://ww2.arb.ca.gov/rulemaking/2019/advancedcleantrucks.

FMVSS 305 Final Rule

NHTSA is issuing a final rule to update FMVSS 305, “Electric-powered vehicles: electrolyte spillage and electrical shock protection.”  The agency characterizes the final rule as a “deregulatory action” as it imposes no costs and adjusts FMVSS 305 to give more flexibility to manufacturers not only for current electric vehicle designs, but also for introducing new technologies to the U.S. market, including hydrogen fuel cell vehicles (HFCVs) and 48-volt mild hybrid technologies. 

By adopting the so-called "physical barrier option," the final rule adjusts the standard to remove an obstruction that prevented hydrogen fuel cell vehicles from being offered for sale in the U.S.  Adopting the physical barrier option also enables manufacturers to produce 48-volt mild hybrid systems without having to use electrical isolation safety measures that involve more complexity, higher consumer costs, and higher mass, without an incremental safety benefit.  The rule is in response to petitions for rulemaking from Toyota and the Auto Alliance. The requirements contained in the final rule are based on the electrical safety requirements of GTR No. 13.8.

Compliance with the rule will be required Sep. 27, 2018.  Optional early compliance is permitted.

NHTSA contact: William Sanches, Office of Crashworthiness Standards, Tel: 202-493-0248.

FMVSS 305

On March 10, 2016, NHTSA published an NPRM in the Federal Register that proposes to amend FMVSS 305 for purposes of adopting various electrical safety requirements in GTR No. 13, “Hydrogen and fuel cell vehicles.”  With the NPRM, NHTSA proposes to adopt electrical safety requirements to protect against direct and indirect contact of high voltage sources during everyday operation of electric-powered vehicles.  NHTSA also proposes to adopt an optional method of meeting post-crash electrical safety requirements consistent with that set forth in GTR No. 13 involving use of physical barriers to prevent direct or indirect contact (by occupants or emergency services personnel) with high voltage sources.  Importantly, the NPRM would also facilitate the introduction of new technologies including hydrogen fuel cell vehicles and 48 volt mild hybrid technologies.  The NPRM is in response to petitions filed both by the Alliance and Toyota.

NHTSA is proposing that compliance with the requirements would be mandatory 180 days after the date of publication of the final rule.  Optional early compliance is proposed.

Comments on the NPRM are due May 9, 2016.

NHTSA contacts: William J. Sanchez, Office of Crashworthiness Standards (telephone:  202-493-0248).   Deirdre Fujita, Office of Chief Counsel (telephone: 202-366-2992). 

Docket ref: NHTSA-2016-0029

Elimination of Tax Credits for Alternative Fuel Vehicles

On May 1, 2014, Sen. Lee (R-UT) introduced the Energy Freedom and Economic Prosperity Act of 2014 (S.2279) to terminate certain energy tax subsidies and lower the corporate income tax rate. Vehicles impacted by the legislation would include those that run on alcohol fuels, biodiesel, various alternative fuel mixtures, hydrogen, fuel cells, electricity, and others.  The bill was referred to the Committee on Finance.

DOE Hydrogen and Fuel Cell Technical Advisory Committee

On March 5, 2014, DOE published a notice in the Federal Register announcing an open meeting of the Hydrogen and Fuel Cell Technical Advisory Committee (HTAC).  The meeting will take place April 1-2 at the DOE headquarters in Washington, DC.  On the agenda for this meeting is: 

- HTAC Business

- DOE Leadership Updates

- Program and Budget Updates

- HTAC Subcommittee Updates

-  Open discussion period

Persons interesting in participating in the meeting must register no later than 5 pm on Wed, March 26 by emailing [email protected]  Foreign nationals must regiater by March 14, 2014.  Those who cannot attend are invited to send written comments.  Minutes of the meeting will be available for public review at http://hydrogen.energy.gov/advisory_htac.html.