California, long a leader in setting industry standards in the automotive industry, has just approved their Advanced Clean Car Rules. So what, exactly, does this mean? The Advanced Clean Car Program put forth by the California Air Resources Board (CARB) is comprised essentially of four components:
- Greenhouse gas standard for cars and light trucks, model years 2017-2025
- Reducing Smog-Forming Emissions
- Zero Emissions Vehicle (ZEV) Regulation
- Clean Fuels Outlet
Let’s look at these one by one.
Greenhouse gas standard for cars and light trucks, model years 2017-2025
These new standards build on existing greenhouse gas standards. California has worked with the federal government over the past three years to develop these standards and while there are always conspiracy proponents proclaiming that federal and state governments should not work together to gang up on the poor public, in this instance we feel that by working together a cohesive set of standards known by all manufacturers well ahead of time and standardized between federal and state governments will provide for less confusion and greater clarity for all manufacturers. With the release of 2013 models facing us, 2017 is just four years down the road. Proposed technologies to see the improvements include stronger and lighter metals, and more efficient drivetrains and engines.
Reducing Smog-Forming Emissions
This is one of the more stringent targets as California has the worst air quality in the nation and also has over 26 million cars on the road – well more than any other state. As recently as 2006 there were fewer than 20 million cars on California roads. It doesn’t take a rocket scientist to understand the math. With this kind of growth in the number of cars on the roads smog forming emissions must be reduced. This regulation will apply to gasoline, diesel, and hybrid powertrain vehicles.
Zero Emissions Vehicle (ZEV) Regulation
We expect this part of the ruling to be the lightning rod. Current regulations call for 4% of new cars sold in California to be Zero Emission Vehicles (ZEVs) and Plug-in Hybrids by 2025. The new regulation calls for that number to be 15.4% in 2025. Automobile dealer organizations have already claimed this is too expensive, stating that the new technology will add almost $4,000 to the price of a new car. The CARB study shows the cost increase to be $1,900. As with all things financial, we expect the reality to probably be somewhere in between these two. One interesting note from the CARB study – the increased price of the car will add $35 per month to the loan payment. Immediate savings due to lower fuel cost will average $48 (refer to Page 10, Table 5 if you follow this link). This means that the fuel economy improvement will outweigh the increased cost from day one of ownership. Here we can say from personal experience that the fuel (electricity) cost of our Nissan LEAF is significantly less than our previous gasoline powered vehicle. Here everyone’s individual experience will be different as the savings depend on what was driven prior to acquisition of an electric vehicle (EV).
Clean Fuels Outlet
This particular portion of the regulation is to support hydrogen fuel cell vehicles. While currently less of a blip on the radar than electric cars due to their high cost, fuel cell vehicle development continues and may, in fact, provide another attractive alternative to the conventional internal gasoline engine (ICE) vehicle. This part of the regulation requires increased numbers of hydrogen fueling stations throughout the state.
Clearly this regulation is aggressive by anyone’s standard. We have seen a history of the CARB baring its teeth only to wimper away later, with its tail between its legs. We feel that this time, the consumer will be a much greater force on a national level as EVs continue to roll out from more and more manufacturers, both foreign and domestic, on a national level. Driving around the streets of San Diego it seems that not a day goes by that we don’t see at least one other LEAF driving around. Toyota’s Prius took some time to gain traction, and look at its ubiquity today, especially in Southern California, the land of $3.50+ regular gasoline. More importantly, take a look at how many manufacturers offer hybrid vehicles of all shapes, sizes and price points. Would these have happened without regulation and initiative?