ZEV mandate creates clean-air credit market

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Sales of the Nissan Leaf has earned the automaker excess clean-air credits. Image: Netcars.com/Flickr/CC BY

Mandates and future standards have created a new market among automakers. A market not about trading vehicles, but of buying and selling credits to meet legal requirements.

Zero-emission vehicles mandate

California now requires the six largest automakers to sell a certain quota of zero-emission vehicles (ZEVs) within the year or face penalties. ZEVs are cars powered by electricity or non-polluting hydrogen drivetrains. However, automakers with a surplus of credits are given the option of selling them to those that do not.

California requires automakers that sell 20,000 or more units a year to guarantee that more than 15 percent of their vehicles sold will be non-polluting by 2025. Dave Clegern, a spokesman for the California Air Resources Board, explained the ZEV program:

“This is a way to address California’s unique air-quality issues and reduce greenhouse-gas emissions. We think there’ll be growing demand for the vehicles and it’s a framework to get them to customers.”

Other states follow suit

Eleven other states have adopted California’s ZEV standards. Regulators are demanding that the automakers sell 60,000 ZEVs before the end of 2014. By 2025, that number is madated to be 1.4 million vehicles. Penalties for not meeting those quotas, or for producing the equivalent credits, will include fines and limits on how many cars an automaker can sell.

[Buy the car of your dreams right here.]

Nissan surplus

Nissan Motors has racked up a surplus of credits over the past two years with sales of its Leaf EV. The Leaf is the best-selling EV in the U.S.

Nissan’s executive vice president, Andy Palmer, said Tuesday:

“We are in a fortunate position of having positive credit, so that’s obviously something we are able to look at. We are exploring some plans, but we haven’t announced anything yet.”

Tesla mum about credit sales

Billionaire Elon Musk’s Tesla Motors, maker of high-end luxury EVs, said in June of 2010 that it had sold some of its excess credits to Honda and other unnamed automakers. Neither the number of credits sold not the price they fetched each has been announced. State regulators do not require the disclosure of that information. However, Tesla’s public disclosure showed it had earned $13 million for the sales of clean-air credits between Honda and other automakers.

Automakers are likely eager to sell any credits earned between 2009 and 2011, because there value decreases with time. However, credits issued in 2012 and later do not degrade or expire.


U-T San Diego 

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