California orders automakers to sell more zero-emission vehicles (ZEV)

Article by Christian Andrei, on May 30, 2012

Starting this year, the state of California is requiring the largest carmakers to sell more "zero-emission vehicles," or ZEVs, like pure-electric, plug-in hybrid and hydrogen-powered vehicles. Automakers who fail to reach the sales quota stands to not gain the ZEV credits required to meet clean-air rules. Those who fail to achieve the quotas could purchase ZEV credits from other carmakers who exceeded their targets, like Nissan Motor Co.

Nissan has remarked that it may sell credits earned in the past two years from its Leaf plug-in, which is regarded as the best selling all-electric vehicles in the United States.

According to Andy Palmer, Nissan’s executive vice president, the company is in a “fortunate position” of having positive credit, it is “exploring some plans,” to sell them. In a June 2010 filing with US SEC, Tesla Motors Inc. said it had sold ZEV credits to Honda Motor Co. and another automaker. The new regulations are affecting vehicle sales in 11 other states – including New Jersey, New York and Massachusetts -- that follow California's rules.

Government regulators expect the six largest auto manufacturers to sell a combined 60,000 ZEVs in 12 states through 2014, and a cumulative 1.4 million units by 2025. Carmakers gain credits for zero emission vehicles in those other states to meet the requirement based on their sales in California. Carmakers that failed to earn ample credits may face fines or limitations on their ability to sell cars.

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