Dramatically scaling back its pioneering mandate for mass-produced electric cars, the Wilson administration's air quality board Thursday signaled its intent to suspend its requirement for exhaust-free cars until 2003.
In a move with far-reaching consequences, the California Air Resources Board revealed its plans to substantially ease the mandate. The decision came after nine months of intense lobbying and rampant speculation that the board was bowing to pressure from the auto and oil industries.
Indeed, the air board directed its staff to draft a rule that is virtually the same as an offer from top U.S. and Japanese auto companies.
Under the changes, California will require mass production of electric cars in seven years instead of in two years as now mandated in the original order. In exchange for the reprieve, auto makers say they will voluntarily sell small numbers of the vehicles as soon as the end of next year, and continue their multimillion dollar investment in electric vehicle development.
The final vote won't come until March, but Thursday's move reflected the strong feelings of most board members that the original order, in essence, is dead.
Environmental groups lambasted the Wilson administration for endorsing a "trust me" offer from an industry that repeatedly has fought safety and pollution improvements on automobiles, from seat belts to catalytic converters.
But Gov. Pete Wilson on Thursday endorsed the ARB's plan, saying it continues California's momentum toward manufacture of the cars without requiring unrealistic volumes to be sold before the technology is ready for mass appeal.
"I believe that California should remain committed to the successful introduction of zero-emission vehicles," Wilson said.
The changes, the governor said, will "allow enforceable emissions benefits" and "at the same time encourage early development of battery technology that will produce [electric cars] the market will accept."
Suspension of the mandate, which was enacted by the ARB in 1990, will be the first major instance of California--renowned for setting stringent limits to clean up car exhaust--backing down from a regulation under pressure. Environmentalists say it is the most dramatic example of government, in a new era of environmental control, spending more time undoing regulations drafted in the 1980s than enacting measures to clean up the nation's unhealthiest air.
As population and traffic increase, widespread use of exhaust-free cars is considered pivotal in California's fight to clean up the Los Angeles Basin's infamous smog by 2010 as required by federal law.
ARB Chairman John Dunlap said enforcing the original deadline would have forced large volumes of the cars into showrooms with limited battery range and high costs. He is concerned that putting them out too early, before the technology is advanced enough, could spoil the future market for electric cars.
"This requires marketing and purchasing [of electric vehicles], not just regulating and mandating them," Dunlap said, "We believe this ensures virtually everyone who wants one will have an opportunity to buy one."
Air board member Joseph Calhoun, a former General Motors executive, said the original "drop-dead date" of 1998 now seems unrealistic. "This is a recognition by the staff that the technology to produce a market for the vehicles isn't there yet," he said.
Research on the status of the technology showed that electric cars can be manufactured today that run 50 to 100 miles on a single charge. However, a delay until 2000 or 2001 would give the industry time to perfect ultra-efficient batteries that give the cars a range of more than 200 miles, rivaling today's gasoline-powered vehicles.
But environmental groups and other supporters of the mandate, including California utility companies, are angry that the Wilson administration plans to suspend the mandate for much longer and give the auto companies almost everything they wanted.
"It's a big leap of faith" to put that much trust in the auto industry, said Jamie Phillips of the Planning and Conservation League.
The impact also reverberates beyond California's borders because under federal mandate, copycat laws in New York and Massachusetts now must also be altered. Electric cars in those two states now will also be required in 2003 instead of 1998.
"Our governor is ferociously disappointed and has been on the phone with Gov. Wilson," said Sonia Hamel, Massachusetts' air policy director. "He feels this proposal is absolutely doomed to fail in California and the Northeast."
Under the proposal, the improvements in air quality lost in a rollback of the original deadlines will have to be made up by the auto industry through cleaner gasoline-powered cars.
"We will not surrender a single pound of emission reductions," Dunlap said.
Thursday's move was a victory for General Motors, Ford, Chrysler, Toyota, Honda, Nissan and Mazda, although they did not win a battle to suspend the mandate for an additional year, to 2004. The companies said they will continue to fight for the extra year because they consider it critical to successful introduction of cleaner-burning cars nationwide.
"We think electric vehicles can be made to be a success with the right launch, with the right timing," said Sam Leonard, General Motors director of auto emissions control. "We think our proposal today is the best chance for success."
The oil industry and two dozen Republican state legislators lost an intense campaign to repeal the entire mandate. The oil companies contend that mandating electric cars gives power utilities an unfair advantage over their gasoline.
For more than five years, the mandate has been driving enormous leaps in technology advancement in electric cars, especially batteries.
Entrepreneurs and investors, including more than 150 California companies involved in making electric car components, say the Wilson administration is sending investors and consumers a mixed message about the viability of the vehicles. They worry that investments will slow considerably.
Under the original rule the air board enacted in 1990, 2% of cars that major manufacturers sell each year in California beginning with 1998 models must be exhaust-free. That amounts to 20,000 cars per year. The quota increases to 5% in 2001 and 10% in 2003.
Instead, the board endorsed suspending the mandate until 2003, keeping the 10% requirement intact, which would amount to about 160,000 electric cars per year in California.
In the interim years, auto makers told the board that they are committed to gearing up assembly lines to produce as many as 5,000 electric vehicles from 1996 through 1997, and 14,000 per year beginning in 1998. However, the companies said they cannot guarantee that they will build and sell those cars; they will do so only if they perceive a strong enough consumer market for them.
The seven companies also would be asked to sign voluntary agreements to sell 3,750 advanced-battery cars by 2000 in the Los Angeles Basin and Sacramento. That is a fraction of the estimated 60,000 vehicles by 2000 in the original order.
The air board staff held months of closed-door negotiations with the auto representatives. The staff unveiled its proposal Thursday with an unusually terse explanation, without any strong words of endorsement.