Proposed
Amendments
to
the
Zero
Emission
Vehicle
Regulation
March
27,
2003
April
24,
2003
2
Overview
°
Recap
of
March
Board
meeting
 
Including
testimony
and
proposed
alternatives
°
Additional
staff
analysis
°
Summary
of
proposed
regulation
°
Staff
recommendation
3
Recap
of
March
Meeting
°
What
brought
us
to
today
°
Basic
structure
of
proposed
regulation
°
Testimony
and
discussion
°
Outstanding
issues
°
Board
directives
to
staff
4
Amendments
Needed
°
To
address
legal
challenges
 
ARB
prohibited
from
enforcing
regulation
 
2005
earliest
practical
restart
date
5
Amendments
Needed
°
To
align
with
technology
status
and
market
demand
 
No
pure
ZEV
ready
for
mass
deployment
 
Future
ZEV
development
difficult
to
predict
 
Tremendous
progress
on
PZEVs
(
bronze)

and
AT
PZEVs
(
silver)

providing
new
opportunities
6
Technology
Status
 
140,000
PZEV
sales
expected
in
MY
2003
Graphic
Courtesy
Sacramento
Bee
7
Preserving
2001
Compliance
°
Some
companies
complied
in
good
faith
°
Built,
marketed,
placed
ZEV
products
°
Earned
legitimate
credits
°
Efforts
should
be
recognized
8
Two
Path
Concept
°
"
Base
Path"
­
for
OEMs
that
invested
early
and
have
banked
credits
°
"
Alternative
Path"
­
smaller,
fresh
gold
(
demonstration
level),
with
higher
silver
option
(
4%),
subject
to
review
9
March
Testimony
°
Few
strong
objections
to
"
Base
Path"

 
Some
concern
about
relaxation
on
changes
related
to
later
start
date
of
2005
vs.
2003
°
Significant
opposition
to
"
Alternative
Path"

 
Included
initial
target,
out
years,
BEV
role,

and
timing
and
role
of
review
panel
10
Staff's
Sense
of
the
Board
°
Add
future
year
targets
for
FCVs
°
Explore
all
feasible
means
to
bring
BEVs
back
to
the
market
place
°
Fix
plug­
in
hybrid
definition
if
that
technology
is
moved
to
"
gold"
11
Staff's
Sense
of
the
Board
°
Draft
resolution
captures
appropriate
role
of
Independent
Expert
Review
Panel
­
Board's
discretion
fully
preserved
°
2011
sunset
for
travel
provision
addresses
"
leakage"
concern
for
now
12
Still
Unresolved
°
250
vs.
500
for
initial
FCV
demo?

°
Rationale,
numbers
for
future
FCVs?

°
Incentivize
or
mandate
BEVs?

­
The
latter
by
direct
or
indirect
methods
°
Call
plug­
in
HEVs
"
silver"
or
"
gold"?
13
Directive
to
Staff
°
Frame
issues
°
Discuss
implications
of
alternatives
°
Describe
combined
effects
°
Clarify
what
Board
is
voting
upon
14
The
Big
Picture
°
Aiming
for
long
term,
mass
market
penetration
°
Zero
emissions
still
the
goal
°
Biggest
hurdles
are
performance,

affordability,
consumer
acceptance,
and
(
for
some
vehicles)
infrastructure
15
The
Big
Picture
°
Bronze
vehicles
(
zero
evaporative
emission,
extremely
durable)
and
silver
vehicles
(
ZEV
enabling)
represent
tremendous
progress
°
Pure
ZEVs
still
elusive
16
The
Big
Picture
°
Existing
mandate
has
resulted
in
"
work­
arounds,"
litigation,
and
intermittent
product
black­
outs
°
OEMs
are
voting
with
their
R&
D
dollars
for
fuel
cell
vehicles
17
The
Big
Picture
°
Third
party
BEV
manufacturers
willing
to
enter,
but
only
if
price
and/
or
subsidies
are
sufficient
and
sustained
18
Issue­
by­
Issue
Analysis
°
250
vs.
500
demonstration
requirement
°
Bringing
BEVs
back
to
market
°
Future
year
FCV
targets
°
Plug­
in
hybrids
19
Alternative
Path
­
250
vs.
500
°
250
based
on
stretch
goal
for
FCVs
°
500
appears
to
be
intended
to
indirectly
leverage
BEV
production
20
Impact
of
Choosing
250
°
Manufacturers
able
to
respond
°
Base
path
OEMs
may
move
to
alternative
path,
increasing
number
of
fresh
ZEVs
°
BEV
substitution
possible
but
unlikely
21
Impact
of
Choosing
500
°
Costs
double
from
~$
250M
to
~$
500M
°
Exceeds
FCV
developmental
needs;

could
slow
advancement
as
OEMs
seek
lowest
cost
options
°
BEV
substitution
more
economically
attractive
but
still
unlikely
22
Impact
of
Choosing
500
°
Worst
case
outcome
 
OEMs
avoid
alternative
path
entirely
 
Seek
banked
credits
 
Delay
action
until
2008
hoping
for
change
 
Bottom
line
risk­­

Fewer
fresh
ZEVs
No
additional
AT
PZEVs
23
Alternative
Path
­
250
vs.
500
°
Staff
recommendation
 
Select
250
for
2001­
2008
demonstration
period
 
Allow
BEV
substitution
 
Retain
50%
fresh
FCV
floor
24
Future
FCV
Targets
°
Staff
proposed
"
TBD,"
following
input
from
Independent
Expert
Review
Panel
°
Several
witnesses
and
Board
Members
sought
specific
targets
now,
even
if
revisions
needed
later
25
Basis
for
Targets
°
­
Growth
by
Stages
(
10X)

 
Progression
of
early
production
for
unique
vehicles,
where
units
grow
from
tens
to
hundreds
to
thousands
°
CalETC
 
Annual
doubling
°
UCS
 
DOE
national
goals,
OEM
public
statements
°
South
Coast
AQMD
 
2%
gold
plus
4%
silver
26
2009
and
Beyond
10X
Cal
ETC
UCS
SCAQMD
2009­
2011
2500
2800
5000
32000
2012­
2014
25000
22400
30000
55000
2015­
2017
50000
71000
71000
73000
2018­
2020
89000
89000
89000
91000
Cumulative
Total
166500
185200
195000
251000
27
2009
and
Beyond
°
Implications
 
All
approaches
are
similar
in
long
term
 
All
numbers
are
subject
to
Board
review
 
Key
point
today
is
rationale
28
2009
and
Beyond
°
Staff
recommendation
in
light
of
Board
direction
 
Follow
10X
rationale
Consistent
with
DOE,
scaled
to
CA
Consistent
with
manufacturer
discussions
 
Align
with
"
red
line"
in
2018
 
Allow
BEV
substitution
to
continue
29
Concern
About
"
Abandoning"
BEVs
°
Desire
to
keep
existing
BEVs
rolling
°
Desire
to
bring
fresh
BEVs
to
market
by
any
feasible
means
30
Incentives
for
Existing
BEVs
°
Staff
recommendation
 
Increase
credit
for
BEVs
in
use
beyond
three
years
 
Remove
battery
warranty
requirement
31
Incentives
for
New
BEVs
°
Staff
recommendation
 
Provide
1.25
multiplier
for
City
EVs
(
Type
I)
and
Full
Function
EVs
(
Type
II)

sold
or
leased
with
consumer
option
to
purchase
or
re­
lease
 
Make
effective
in
2003
model
year
32
BEV
Substitution
on
Alternative
Path
°
Staff
Recommendation
 
Allow
BEVs
to
meet
50%
of
alternative
path
fresh
credit
requirement
 
Applies
to
2003
and
later
new
vehicles
 
Use
cost­
based
ratio,
biased
towards
BEVs
20:
1
for
Type
1
BEVs
(
city
cars)

10:
1
for
Type
2
(
full
function)
33
Incentives
for
BEVs
°
Summary
of
BEV
incentive
impacts
 
Encourage
continued
availability
of
used
BEVs
 
Encourage
sale
and
open­
ended
lease
 
Provide
incentive
for
BEV
production
(
cost
per
credit
is
less
than
FCVs)

 
No
guarantee
BEVs
will
be
marketed;
depends
mostly
on
availability
of
financing
for
third
party
manufacturers
 
Higher
BEV
credits
and
BEV
substitution
would
reduce
total
FCV
numbers
and
reduce
need
for
AT
PZEVs
34
Plug­
in
HEVs
°
Current
status
 
Plug­
in
HEVs
receive
large
silver
credit
0
2
4
6
8
10
12
14
16
18
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Model
Year
Possible
Credit
Hydrogen
Internal
Combustion
Hybrid
Electric
Vehicle
Grid
Hybrid
with
60
miles
range
Indirect
Methanol
Fuel
Cell
Vehicle
Hydrogen
Internal
Combustion
Engine
Vehicle
Grid
Hybrid
with
20
miles
range
Compressed
Natural
Gas
Hybrid
Electric
Vehicle
Compressed
Natural
Gas
Vehicle
High
Voltage,
High
Power
Hybrid
Electric
Vehicle
High
Voltage
Hybrid
Electric
Vehicle
Low
Voltage
Hybrid
Electric
Vehicle
HEV
20
HEV
60
HEV
0
35
Plug­
in
HEVs
°
Current
status
(
continued)

 
OEMs
have
significant
need
for
silver
credits
 
Plug­
in
HEVs
more
attractive
than
regular
hybrids
on
cost
per
credit
basis
2005
2006
2007
2008
2009
Plug­
in
HEV
2,381
$
2,381
$
2,381
$
2,381
$
3,175
$

Level
2
HEV
5,500
$
2,500
$
2,500
$
2,500
$
2,000
$

Estimated
Dollars
Per
ZEV
Credit
36
Plug­
in
HEVs
°
Staff
recommendation
 
If
plug­
in
HEVs
become
"
gold,"
credit
needs
to
be
reduced
to
put
plug­
ins
on
appropriate
scale
 
Also,
minimum
range
should
be
increased
 
Will
add
cost,
possibly
negating
the
change
 
Staff
recommends
leaving
in
"
silver"

category
37
Summary
of
Proposal
with
Board
Direction
°
Major
elements
 
Base
and
alternative
paths
 
Credit
calculations
 
Independent
Expert
Review
Panel
°
Total
vehicles
(
gold,
silver,
bronze)

°
Air
quality
analysis
38
Base
Path
°
Preserve
2001
regulation
structure
°
Percentage
ZEV
requirements
 
2
%
Gold
 
2
%
Silver
 
6
%
Bronze
°
Allow
use
of
banked
credits
39
Alternative
Compliance
Path
°
Requires
market
share
of
FCV
totals:

°
Allows:

 
50%
of
FCV
requirement
to
be
met
with
BEVs
 
Rest
of
ZEV
obligation
to
be
met
with
AT
PZEVs
2005­
2008
250
2009­
2011
2500
2012­
2014
25000
2015­
2017
50000
40
ZEV
(
Gold)
Credits
°
Remove
efficiency
multiplier
°
Extend
credit
incentive
for
early
FCVs
°
Create
and
weight
ZEV
categories:

 
NEV,
Type
0,
Type
I,
Type
II,
Type
III
°
Adjust
credits
over
time
41
AT
PZEV
(
Silver)
Credits
°
Remove
efficiency
multiplier
and
fuel
economy
references
°
Modify
credit
calculations
 
Level
1,
2
and
3
HEVs
 
Zero
emission
range
 
Low
fuel
cycle
emissions
 
CNG
42
Other
Modifications
°
Incentives
for
early
PZEV
production
°
Reaffirm
addition
of
LDT
2
to
baseline
°
Transportation
system
credit
°
Placed­
in­
service
deadline
°
Banked
NEV
credit
cap
°
Severability
clauses
43
Expert
Review
Panel
°
Independent
experts
°
Assess
ZEV
and
AT
PZEV
technologies
 
Fuel
cell,
battery,
advanced
componentry
 
Technology
and
market
readiness
 
Provide
Board
with
data
to
support
review
of
future
ZEV
requirements
44
Number
of
Vehicles
°
General
effect
of
today's
changes
 
Increases
number
of
fresh
ZEVs
on
alternative
path
by
adding
later
year
targets
 
Decreases
AT
PZEVs
on
alternative
path
since
fewer
offsets
needed
 
No
change
to
base
path,
2001­
2008
demonstration
period,
or
PZEV
requirements
45
Number
of
Vehicles­
ZEVs
0
5000
10000
15000
20000
25000
30000
35000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Model
Year
Number
of
Vehicles
Gold­­
Alternative
path
March
version
Gold­­
Alternative
path
April
version
Gold­­
Base
path
46
Number
of
Vehicles­­
AT
PZEVs
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Model
Year
Number
of
Vehicles
Silver­­
Alternative
path
March
version
Silver­­
Alternative
path
April
version
Silver­­
Base
path
47
Air
Quality
Analysis
°
Emission
reductions
°
Response
to
environmental
issues
raised
 
Fleet
turnover
effect
 
Upstream
emissions
from
hydrogen
infrastructure
48
Emission
Reductions
(
Tons
per
day,
South
Coast
Air
Basin)

°
Will
also
reduce
CO
and
air
toxics
ROG
NOx
Net
Change
from
March
amendments
2010
0.06
0.00
2020
0.12
0.21
Net
Change
from
2001
amendments
2010
0.03
­
0.06
2020
0.08
0.04
Net
Change
from
no
ZEV
program
2010
­
0.32
­
1.02
2020
­
3.16
­
2.02
49
Response
to
Environmental
Issues
Raised
(
CEQA)

°
Fleet
turnover
 
Based
on
analysis
to
date,
no
reason
to
modify
previous
staff
conclusion
°
Emissions
from
hydrogen
infrastructure
 
In
near
term,
insignificant
 
Many
options
 
Long
term
vision­­
sustainable
and
renewable
production
50
Staff
Recommendation
°
Approve
the
proposed
amendments
to
the
2001
ZEV
regulation
 
Maintains
air
quality
benefit
 
Addresses
litigation
 
Allows
ZEV
program
to
be
implemented
 
Maintains
progress
towards
transforming
California's
vehicle
fleet
to
zero
emissions
