Tesla Motors ZEV Credit Question

Yes, it does, but the regulations may change.

There was another thread on the forum over the weekend about a summit of automakers and most of them are planning to lobby on both the state and federal level for relief from the current emission standard laws. Tesla on the other hand wants them stricter and thinks the current mandates could easily be met if the car makers were really willing to commit. The problem is the American auto makers, as well as Toyota make their biggest profits off truck and SUV sales. They haven't figured out how to make a profit from EVs, and Toyota is the only one making a profit from hybrids.

The pressure is definitely going to be on to weaken the current mandates. The oil and big car company lobby is pretty strong. California on the other hand is one of the biggest Democratic strongholds in the country and a large percentage of the legislature is for the mandates. It doesn't hurt that the car company that will benefit the most from these mandates is based in California and is poised to grow significantly in the next decade.

The current "ZEV" mandate includes partial credits for plug-in hybrids and the manufactures are having no problems meeting the requirements.

In fact they can meet the requirements for the next four years with bankrolled credits. Without selling anymore ZEVs.

Currently, CA has 1.7% market share for BEVs and 1.1% for PHEVs.

For the "large manufactures" right now the requirement for BEV is only 1.25% of the fleet. That is for GM, Ford,Fiat Chrysler,Toyota,Nissan,Honda,Hyudai,VW,BMW and MB.

The mid-size OEMs that have global revenues less than $40B but sell more than 10k cars worldwide don't have a requirement til 2018. These are Subaru,Mazda, Land Rover-Jaguar, Volvo and Mitsubishi. Then they can meet all their requirement with PHEVs. For a while they don't actually need to sell a single BEV or FCEV.

They can easily meet 22%. This is 22% of CA not the USA. BMW is planning to switch all cars to plug-ins. Most to PHEV and a few to BEV.

All they need is to sign contracts with either Tesla,LG, Samsung or one of the second tier Japanese or Chinese firms to have 5-10 kWh battery packs for enough PHEVs. OEMs will not be required to sell 22% of the fleet with 70+ kWh packs.

There is one poster here who believes Tesla will not sell battery packs for PHEVs only BEVs. This is a belief as Tesla has said no such thing to my knowledge plus there are plenty of battery/automotive supplier firms that can handle the business they just need a few years lead time to have the capacity. There is plenty of time between now and 2022.


BTW It does look like by 2030 all cars and light duty trucks sold in CA will be required to be either BEV or FCEV. The heavy duty half ton and 3/4 ton trucks and SUVs might be allowed to be PHEV. Again, 2030 is a long way off.

mdevp said:

Wait, which manufacturers are having no problem meeting Cali's mandates? All of them? If all auto manufacturers are easily meeting the mandate then who are buying the ZEV credits exactly? And Fiat's CEO complained about the Cali. mandate b/c he is losing money on every Fiat EV he sells. Is Fiat then having an easy time meeting the requirements? Just curious, I'm probably missing something, not an expert on this stuff.

Click to expand...

1) All of them
2) They(Honda and FCA mostly) are buying credits because they believe they are currently cheap and the price may rise when they need them in the future. Tesla sells them cheap today because Musk believes Tesla can create more credits than they will ever be able to sell in the not too distant future.
3) Fiat is easily meeting the requirement because the demand for 500e is greater than the supply. Far greater it seems. I have no doubt they are losing money on each 500e sold because they contracted out all engineering for the 500e to Bosch and then put in a tiny order for Bosch to manufacture the powertrains. That is a recipe for losing money.

It is far easier for Marchione to sell Hellcats, Ram 3500's and Maserati.

If he wants to he can scale up his EV program. Chrysler has had an electric Minivan in the works for 25 years.

If FCA does their own engineering and buys enough batteries to sell 100k PHEV Minivans, Jeep Crossovers,and electric 500e FCA will have enough economies of scale to make money.

Why doesn't Marchione want to do this? Because it will eat into ICEv profits and it will give CARB ammunition to raise the minimum requirements for ZEVs. CARB plans to ban the sell of new ICEv in CA in 2030 anyway but that is beside the point.

The legacy OEMs always say they will lose money with any new clean technology and they always claim that fleetwide requirements will bankrupt them. They always want to delay delay delay and stretch implementation of any new requirement way into the future.

In the 1970's all of the Big Three representatives at CARB meetings claimed that requiring them to put in catalytic converters in all vehicles would bankrupt them because consumers were unwilling to pay for clean technology.Today all vehicles sold in the industrialized countries come standard with catalytic converters and most in the third world do too. And the OEMs are doing just fine.