Electric Cars Will Get the Green Light

To the dismay of the auto industry and the joy of environmental groups, the electric car is officially part of the Golden State’s future.

The California Air Resources Board made that clear last month in unanimously upholding the so-called ZEV mandate requiring car makers to provide a substantial number of zero-emissions vehicles, or ZEVs, for sale in the state beginning with the 2003 model year.

State lawmakers stepped up to the plate with a direct grant program--signed into law at the end of September by Gov. Gray Davis--that will provide consumers up to $3,000 a year for three years to offset electric vehicle lease or purchase costs. Final rules aren’t expected to be in place until the end of the year. Additional subsidies of up to $5,000 for a three-year lease already are available in the Los Angeles Basin and several other smog-afflicted regions of the state through regional air-quality agencies.

The new state program is capped, though, at $18 million, even as some auto makers say the electric vehicle industry needs at least $1 billion in state and federal price subsidies in the next few years to help offset the high cost of manufacturing the cars for California.

And still as murky as the air in L.A. during a Stage 3 smog alert is the bottom line: just how many ZEVs the industry will be required to produce for California.

The numbers still are being debated and a final decision won’t be made at least until the air board meets on the mandate once again. Several major auto makers have told the board’s staff that they will not be able to meet the mandate requirements as now established.

An initial staff assessment of options open to the air board is available on the agency’s Web site (https://www.arb.ca.gov/msprog/zevprog) and a public workshop on possible revisions has been scheduled for Oct. 25 at the board’s regional office in El Monte.

A final report and recommendations for changes to the mandate, based on industry and public input, will be presented to the board for action Jan. 25.

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Enthusiasts of battery-powered electric vehicles--at present the only technology capable of meeting ZEV requirements--declared victory after the board’s Sept. 7 vote to uphold the mandate in the face of auto maker insistence that it be scrapped. They believe the board will hold firm and that only minor changes are coming.

“The debate has shifted from ‘Will there be a mandate?’ to ‘What it will look like?’ ” said Roland Hwang, transportation analyst for the Natural Resources Defense Council and former transportation programs director for the Union of Concerned Scientists.

“But there will be a substantial number of full-function electric vehicles in California. . . . The environmental community did hear from [the air board] that what’s going on now is a tweaking of the program, not a wholesale rewriting--a tuneup, not an overhaul. The air board was very clear on that.”

But Art Garner, a spokesman for the U.S. arm of Honda Motor Co., said that what the auto makers heard in the same September meeting was that the board understands that the industry has considerable concerns about the cost of building and selling EVs, the manner in which the mandate would be implemented and the degree of flexibility that it would allow.

“That’s what we’re doing now,” he said. “We are working with the [air board] staff to try to make sure they are aware of our feelings on those issues.”

Those feelings aren’t especially favorable.

Churning out battery-powered EVs, which are virtually hand-built, “is a pretty ugly business proposition,” said Kelly Brown, director of vehicle environmental engineering for Ford Motor Co., which makes an electric-powered compact pickup, electric bicycles and two small two-seat electric cars--one freeway-legal but limited to a 60-mile range and the other restricted to streets with maximum speed limits of 35 mph.

The Dearborn, Mich.-based auto maker will try to comply with the mandate, Brown said, but is not committing itself to meeting the minimum ZEV requirement for 2003--almost 7,500 vehicles for Ford before a variety of environmental credits come into play--unless the required numbers are reduced significantly. Otherwise, he said, “we may fall short.”

General Motors Corp. also sees little likelihood of meeting the mandate’s present requirement that it have about 4,100 ZEVs available for sale in California for the 2003 model year.

“We have not announced any products” that would meet the mandate, said West Coast spokesman Donn Walker, adding that it is unlikely there will be any new production of the company’s sleek two-seat EV1 because the electric sports coupe won’t meet new federal auto safety standards that take effect for 2003. “We would have to design a whole new car.”

Added Jeff Kuhlman, GM’s technology division spokesman: “We are looking at various product alternatives and would like to move forward. But we are not going to do so until we understand what the final rules will be.”

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Toyota Motor Corp., which has won raves for an electric version of its RAV4 sport-utility vehicle, also says that meeting the mandate requirements is probably not in the cards. It costs the company “more than $200,000 each” to build the compact SUV, whose design requires a virtually hand-built drive train and special undercarriage to hold the heavy battery array, said Jim Olson, senior vice president for regulatory affairs at the company’s U.S. subsidiary in Torrance.

The company recovers only about 10% of the cost from lease revenues and isn’t willing to field more than about 100 electric RAV4s in 2001 and 2002, Olson said.

And like the EV1, the present-generation electric RAV4 won’t meet 2003 federal safety standards, and a new version couldn’t be ready before 2004, he said.

As it now stands, the mandate requires that at least 4% of the light-duty passenger cars and compact pickup trucks that the major auto makers offer for sale in the state, starting with 2003 models, be ZEVs. The major auto companies are defined as those with annual sales in California of least 35,000 of these vehicles (most full-size pickups and SUVs are excluded from the count).

Companies bound by the mandate will include Ford, GM, DaimlerChrysler’s domestic brands, Toyota, Honda and Nissan Motor Co.

A total of 10% of their new-vehicle fleets must be a mix of ZEVs and cars and trucks that qualify for partial-ZEV credits--a category in which, so far, only Nissan has been able to field an entry, its gasoline-powered Sentra CA, which has been classified as a super-ultra-low-emissions vehicle with zero evaporative emissions. Honda, Toyota and other auto makers are working on similar gasoline-powered SULEVs, but none is expected to be available in volume by 2003.

And despite the publicity for their new fuel-efficient, gasoline-electric hybrid vehicles, neither Honda (maker of the two-seat Insight) nor Toyota (with its five-seat Prius) qualifies for credits that would help offset their ZEV requirements. Honda, in fact, makes a gasoline-powered Accord that has a better emissions rating than the Insight.

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So far, the only zero-emissions vehicles--and that designation is debated by those who point to the environmental damage done in generating the electricity used to charge them--are battery-powered electric cars and trucks.

To date, only about 2,200 have been registered for use in the state, many for government agency fleet and test purposes and not available to the general public.

Only GM, Ford and Honda have sold or leased their electrics to the public, and Honda pulled the plug on its program after leasing 325 of its custom-built EV-Plus minivans, claiming that there is no public appetite for a four-seater with a range of 120 miles between charges and a lease price of up to $499. The other EV makers all have subsequently echoed that cry.

The mandate envisions about 8,000 EVs for sale or lease in California in 2003 after all of the offsetting clean-car credits are applied. Before credits, the total is 22,000.

But the auto makers--despite filing reports with the air board during the summer spelling out how they would meet the mandate--now are saying that isn’t likely to happen unless most are limited-range, limited-use neighborhood and “city” electric vehicles.

A neighborhood electric usually looks like a slightly oversize golf cart--although its components, including brakes, steering, body structure and motor, are far superior to those of anything you’d find tooling around a fairway. They are two- to four-passenger vehicles, often with open or only partially enclosed cabins, and are limited to streets with speed limits of 35 mph.

So-called city electrics such as Ford’s forthcoming Think City are small cars or trucks, usually with two-occupant capacity, that can be driven at freeway speeds and meet federal safety standards for highway-capable vehicles. They can be used for commuting and other “family car” purposes but usually can travel less than 60 miles before their batteries need to be recharged, a process that takes several hours.

Full-service electrics, such as GM’s EV1 or Toyota’s RAV4, are freeway-legal vehicles with two or more seats, cargo-hauling capacity and between-charge operating ranges of up to 140 miles.

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The penalties the auto makers would face for not meeting the state’s ZEV requirements are hardly draconian: a fine of $5,000 for each vehicle below the mandate minimums.

That means that if Toyota were required to produce 800 ZEVs for sale in California in the 2003 model year--a possibility when all of the company’s credits for early introduction of the RAV4 electric are tallied--but actually fielded only 400 of them, as is likely, it would be fined $2 million.

But at a net cost of $180,000 each, the company would save about $70 million by paying the fine and undercutting the quota by 50%.

Still, EV supporters aren’t giving up hope.

“One barrier to car companies simply paying the fines instead of complying is that most have corporate policies of not operating in violation of the law,” said Hwang, the Natural Resources Defense Council analyst.

“So that’s not really a viable course, especially if one company did it while another really tried to meet the terms of the mandate,” he said. “The ones that didn’t try would look pretty foolish and would fall to the back of the pack in terms of the public’s perception of their commitment to the environment. And a good environmental record is critical to most car companies’ marketing these days.”

The auto makers’ complaints and threats of noncompliance “don’t surprise me from a political basis but certainly do surprise me from a technical basis,” said David Modisette, executive director of the California Electric Transportation Coalition. “Their statements are directly contradicted” by the compliance plans they submitted to the air board staff this summer, he said.

Modisette believes that the final scenario will have the air board holding firm on ZEV requirements but giving the auto makers additional time, a year or more, to develop vehicles that can obtain the partial-ZEV status that the mandate anticipates will account for several hundred thousand low-pollution vehicles in coming years.

“All of the car companies will complain about the early economic burden,” Modisette said, “but that happens with any new vehicle. They are selling hybrids for less than cost in order to build the market for them, and that’s what they should be doing with ZEVs too.”

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