Clean Air: Shootout at EV Corral

The battle over California’s zero-emissions vehicle mandate moves to Southern California later this month with a two-day hearing many see as a referendum on the fate of the electric vehicle.

The session, which will begin May 31 at the South Coast Air Quality Management District headquarters in Diamond Bar, is expected to draw a crowd of speakers split between fans and foes of battery-powered electric cars and trucks--the only zero-emissions vehicles, or ZEVs, acknowledged by state regulators today.

On the printed agenda are topics as esoteric as storage-battery technology and as emotional as lung disease.

But the real issue in the final public workshop scheduled before the zero-emissions rules take effect in September 2002 is the auto industry’s bid to further weaken a mandate that has already been altered and delayed twice since it was adopted by the California Air Resources Board in 1990.

The auto industry last week asked Gov. Gray Davis to add $75 million to next year’s state budget to fund subsidies for ZEVs, gasoline-electric hybrids and other vehicles that provide at least “super-ultra-low emissions”--a sign that the manufacturers believe they will continue to face some requirement that they provide EVs for sale in California.

But at the same time, the industry has hired big-gun lobbyists such as former assemblyman and Sacramento Mayor Phil Isenberg and presidential image-maker Joseph R. Cerrell to push their give-us-more-time message to the Legislature.

General Motors Corp., for example, says that although it spent more than $500 million in developing the EV1--an electric sports car with a devoted group of users--a broad market never developed.

“There was greater-than-anticipated consumer resistance” to a two-seat vehicle with a range of 60 to 120 miles per charge and a monthly lease price of $399 to $499, said Ken Stewart, GM’s brand manager for advanced-technology vehicles.

The auto makers say it is unfair for the state to force them to spend huge sums on vehicles they cannot profitably market.

“We are against mandates on general principle,” said DaimlerChrysler spokeswoman Ann Smith. “If there were a market for these [electric cars], then there would be no need to have a mandate.”

Opponents scoff at such claims, pointing out that the auto makers have routinely opposed government efforts to make them improve safety standards and emissions on the grounds that such requirements are too costly or unnecessary.

“The auto industry has always opposed mandates and cried destruction,” said V. John White, the Sierra Club’s lobbyist in Sacramento. “But it has always been able to produce a lot more than it said it could.”

Industry claims that electric vehicle production is prohibitively costly ignore the basic economic principle of spreading costs over volume, ZEV proponents argue.

The auto makers typically spend $1 billion or more to develop a new model and then amortize the costs by aggressively marketing and selling thousands of units, the clean-car advocates note.

But GM built only about 400 EV1s. And even the car’s most devoted fans say the company did little to market it. Honda Motor Co. also designed and built a four-seat electric vehicle, the EV Plus, that was marketed to the public. But it built only about 325 of them before declaring last year that it would stop because it did not see a public demand.

Most other electric vehicles were produced in equally small numbers and were marketed only to fleet users such as utility companies and government agencies.

“Electric cars have not been launched in this state--they have only been demonstrated,” said Edward Kjaer, manager of Southern California Edison’s electric transportation division.

The utility, which is required by the federal Energy Policy Act to convert its own fleet to zero-emissions vehicles in the next few years, says it needs 125 to 150 electric cars and trucks next year but cannot get them because the auto makers say they won’t build any more.

“This is not about technology or customer demand, because their marketing efforts were pretty pitiful,” the Sierra Club’s White said. “It comes down to a matter of money. The cost of batteries is something the car guys don’t want to have to tackle, so they don’t want to have to build more electric vehicles.”

The average cost of the storage batteries in current EVs is about $10,000 per car. That is down from $90,000 just five years ago, and some battery companies are saying that with enough volume to lower per-unit production cost, it would drop to about $3,500--a figure that starts being competitive with the cost of a conventional internal-combustion engine.

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For its part, the air board won’t discuss the upcoming hearing or the possible fate of the ZEV mandate, saying that such discussion is premature.

The board, however, is on record as lauding the mandate as the reason the industry has moved as far as it has to develop alternatives such as battery-powered electric vehicles; future technologies such as hydrogen-powered fuel cells; and hybrids such as the gas-electric cars being marketed in California by Honda, and later this summer, Toyota Motor Corp.

“None of those innovations would have happened without California’s ZEV mandate,” board spokesman Rich Varenchik said.

The air board staff recommendations that will flow from the May 31-June 1 workshop, then, are key to the state’s unprecedented move to require the major auto makers to provide a substantial number of nonpolluting passenger cars and trucks.

California also provides the backbone that props up regulators in other states, from Arizona to New York, that are encouraging or demanding ZEVs of their own from the manufacturers.

California’s mandate requires that at least 4% of the passenger vehicles the major auto makers offer for sale in the state, starting with 2003 models, be zero-emissions vehicles; it defines the majors as those with annual California sales of least 35,000 vehicles. A total of 10% of new-vehicle fleets must be a mix of ZEVs and vehicles that qualify for partial ZEV credits.

The rules also provide credits that can reduce the total number of ZEVs required of manufacturers. They are awarded, for example, for pre-2003 introduction of electrics and for development of long-range electric vehicles and electrics that use advanced-technology storage batteries. There are also partial ZEV credits for internal-combustion engines that meet stringent requirements: certification as a super-ultra-low-emissions vehicle, or SULEV; provision of a 150,000-mile warranty on the entire emissions system; and certification of zero-evaporative-emissions status.

So far only one car, Nissan Motor Co.’s new Sentra CA, has obtained “partial ZEV” status, although Honda and several other auto makers are reportedly working on their own versions.

Based on 1998 sales and the present state of the electric vehicle makers’ art, the ZEV mandate now requires the auto industry to provide California an annual complement of about 23,000 electric vehicles and tens of thousands more cars and trucks that use super-clean gasoline engines, or perhaps hybrid gas-electric power plants that qualify for partial ZEV credits. Proponents of the mandate, including many groups that would like regulators to broaden and toughen it, see the upcoming ZEV workshop session as potentially the last chance they will have to publicly plead their cases.

The air board has scheduled an informational meeting on the mandate for Sept. 7 and is likely at that time to direct the board’s staff to draft a final ZEV policy.

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Interests as diverse as the Sierra Club, the American Lung Assn. and Southern California Edison say that the mandate, as now written, is the best hope for continued development of truly clean private transportation.

“This is not just a mandate for electric cars but for the state to hold the course and to keep pushing the technology out onto the marketplace, to create new momentum--because if it goes back into the laboratories, it will be years before it comes out again,” Edison’s Kjaer said.

Auto makers see the session as the last chance to hammer home their claim--being made with increasing urgency since the current biennial review of the mandate began with a hearing in Sacramento two months ago--that battery-powered electrics have failed to win public acceptance.

In an interview with the hometown Detroit Free Press last week, the man who heads Ford Motor Co.’s new electric vehicle group dropped this stunner:

“God doesn’t want us to have full-function electric vehicles. . . . The laws of nature don’t allow this,” said John Wallace, executive director of Ford’s Think Group.

Granted, Wallace heads an operation dedicated to selling electric bicycles and small electric vehicles not suited for freeway travel. But Ford has staked out for itself the position of the industry’s environmental leader, and indeed, has put more full-function, freeway-legal electric vehicles on the road than any other auto maker.

For Wallace to publicly repudiate Ford’s electric-powered Ranger mini-pickup, as well as the rest of the EVs the industry has put forward in the last three years, shows how determined the big auto makers are to beat back a key concept of the ZEV mandate: that the present generation of battery-powered electric vehicles can replace gasoline-powered cars for many drivers.

The auto companies are resigned to a ZEV mandate, since it would be political suicide for the state air board to abandon the stance it first took in 1990.

The board, after all, has told Californians that gasoline-powered vehicles are a major contributor to smog and respiratory disease, and board members serve at the pleasure of a Democratic governor publicly committed to clean-air initiatives.

But Wallace says that Ford, for one, has changed its emphasis and no longer believes in the electric as a replacement vehicle. Instead, Ford will push for electric cars, such as its Think Neighbor and Think City vehicles, that augment the gasoline fleet by serving as commuter cars and runabouts good for visiting the neighbors or scooting down to the corner convenience store for a bag of chips on a Saturday afternoon.

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So the question becomes whether the auto makers can persuade the board to offer more exceptions and more partial ZEV credits for vehicles that are cleaner than most but either don’t offer a full replacement for the gas vehicle, or that do but still emit carbon dioxide, nitrogen oxides and other pollutants.

That tactic became clear at the March hearing in Sacramento, when representatives of BMW, DaimlerChrysler, Ford, GM, Honda, Nissan and Toyota lined up to testify that the ZEV mandate is unreasonable and that their efforts to build a public market for electric vehicles have failed because of problems inherent in the technology.

In the past, the air board has watered down the ZEV mandate twice at the urging of the industry. The first change, in 1996, killed a requirement that auto makers provide 2% of their California cars as ZEVs by 1998 and that the number increase gradually to 10% of the fleet in 2003. The second change, in 1998, established the current system of partial ZEV credits.

While acknowledging that the auto makers will be fighting more fiercely than ever to win even more concessions this year, environmental groups and ZEV supporters say they believe the air board will hold the line.

“There will be some compromises made, perhaps, as there have been throughout the process, and that is frustrating. But in the end, there will be a ZEV mandate,” Edison’s Kjaer said.

Roland Hwang, the Berkeley-based transportation program director for the Union of Concerned Scientists, agrees.

After the March ZEV mandate workshop in Sacramento, Hwang said that despite their anti-electric rhetoric, the manufacturers seemed more willing than ever to listen to the pro-electric forces.

In a meeting with representatives of the Alliance of Automobile Manufacturers just before the March hearing, Hwang said, the various clean-air groups came away feeling that the auto makers know the state air board will not kill the mandate.

The overriding issue, said Sierra Club lobbyist White, is that California “needs to break its addiction to petroleum.”

The upcoming mandate workshop, he said, “is the last [chance] they’ll have to change minds [on the air board], so the car guys are being very aggressive, but there seem to be some schisms in the ranks. That’s why they asked for state subsidies. I think it shows they are resigned to a mandate.”

In private talks between environmental groups and with the auto makers, White said, “the disagreement now is over the timing of when we see a substantial number of ZEVs on the road. We say within 10 years and they say 30 years.

“What we know we need to do now is to keep on the pressure.”

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Times staff writer John O’Dell covers the auto industry for the Business section and Highway 1. He can be reached at john.odell@latimes.com.