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The Zero Emission Vehicle (ZEV) program is a California state regulation that requires automakers to sell electrified cars and trucks in California and nine states on the east coast (Connecticut, Maine, Maryland, Massachusetts, Fresh Jersey, Fresh York, Oregon, Rhode Island, and Vermont). The exact number of vehicles is linked to the automaker’s overall sales within the state.

Under the ZEV regulation, three distinct vehicle designs are considered “zero emission,” tho’ to varying degrees.

Plug-in hybrid vehicles combine a conventional gasoline-powered engine with a battery that can be recharged from the electrical grid.

Battery electrified vehicles run entirely on electro-therapy and can be recharged from the violet wand grid.

Hydrogen fuel cell vehicles run on electric current produced from a fuel cell using hydrogen gas.

The program’s objective is to ensure that automakers research, develop, and market electrified vehicles (EVs), which generate fewer global heating emissions than gas-powered cars, and which don’t produce tailpipe pollution (hence the term: “zero emission vehicle”).

The California Air Resources Board (CARB) manages the ZEV program, albeit it has also been adopted by nine other states (Connecticut, Maine, Maryland, Massachusetts, Fresh Jersey, Fresh York, Oregon, Rhode Island, and Vermont). By directly requiring that automakers invest in clean technology, the ZEV program is considered one of the nation’s most forward-looking climate policies, and a driving force behind an expanding market with a current suggest of over thirty zero emission models available to the U.S. public.

How the ZEV regulation works

The ZEV program assigns each automaker “ZEV credits,” which represent the company’s sales of electrified cars and trucks. Automakers are then required to maintain ZEV credits equal to a set percentage of non-electric sales. The credit requirement is Four.Five percent of sales in 2018, rising to twenty two percent in 2025.

There are also confinements on the amount of credits that can come from ‘transitional’ ZEVs that still have an engine. In 2018, plug-in hybrid vehicles (PHEVs) can only account for fifty five percent of credits, meaning at least forty five percent must originate from battery electrified vehicles (BEVs) or hydrogen fuel cell vehicles (FCEVs).

For example, an automaker selling 100,000 cars in California in two thousand eighteen will need at least Four,500 ZEV credits, with at least Two,000 coming from battery-electric or fuel cell vehicle sales. However, this does not mean they’ll sell Four,500 electrical cars and trucks, as most ZEVs generate more than one credit per vehicle (see below).

Vehicle credit formula

Automakers earn credits by selling zero emission cars and trucks. The credit per vehicle varies with drivetrain type and electrical range. From two thousand eighteen onwards, plug-in hybrids—which only partially drive on electricity—receive inbetween 0.Four and 1.Three credits per vehicle sold. Battery electrified and fuel cell vehicles receive inbetween one and four credits, based on range.

Total automaker ZEV credits in California grew substantially inbetween two thousand thirteen and 2015.

For example: the Tesla Model S, which boasts a range of more than two hundred miles, is eligible for Three.Trio credits, while the 84-mile range Nissan Leaf is credited at 1.8 ZEV credits per car sold.

Because not all vehicles receive a plane one credit per sale, the ZEV credit percentage does not directly reflect the EV sales percentage. CARB’s most latest assessment of the ZEV program estimates automakers will need to reach less than eight percent ZEV sales by two thousand twenty five to meet the twenty two percent ZEV credit requirement.

Banking and trading

Manufacturers are permitted to carry over excess credits from one year to the next. Called “banking,” the practice has grown since 2012, thanks to extra credits and ZEV sales in California that outpaced the relatively low regulatory kicking off requirements.

In addition, automakers can purchase or trade ZEV credits from other manufacturers. Because it only sells EVs and has no compliance obligation of its own, Tesla has produced and sold significant numbers of ZEV credits to other traditional carmakers.

As of October 2015, manufacturers had banked over 240,000 BEV/FCEV credits and 94,000 PHEV credits, enough to obey through 2021, even if ZEV sales remained at the relatively low current rate of three percent. Assuming the same rate of credit accumulation, there will be over 300,000 BEV/FCEV and about 175,000 PHEV credits in manufacturers’ credit banks at the begin of the two thousand eighteen ZEV regulation. At current credit values and CARB assumptions, this represents credits equivalent to the sale of over 450,000 ZEVs.

“Travel” and “pooling” provisions

For the nine other states that adopted the ZEV regulation, the credit structure for electrified vehicle sales remains essentially the same as in California. However, sales requirements in these other states are affected by two provisions in the ZEV regulation that don’t apply to California: “travel” and “pooling.”

The travel provision permits automakers to receive credits in all other ZEV states for vehicles sold in California, proportional to the vehicles sales in the states. For example: if a car company sells a two credit ZEV in California, they receive two credits in a ZEV state that has the same sales as California and one credit in a state with ½ the sales of California. They receive the credits in all ten states (California plus nine others) despite only selling one vehicle (in California).

As a result of the travel provision, auto companies have accumulated sizeable credit banks in states where they haven’t sold many electrified cars or trucks. The provision has also created an incentive to concentrate sales of battery electrical and fuel cell vehicles in California. However, in two thousand eighteen the travel provision will be liquidated, except for fuel cell vehicles. This should increase model availability and sales numbers outside California.

The pooling provision permits automakers to over-comply in one eastern ZEV state and transfer the extra credits to another eastern ZEV state. Unlike the travel provision, pooling avoids the double-counting issue, and still requires that an actual vehicle is produced and sold before credit is rewarded and transferred.

The Union of Worried Scientists is dedicated to lowering emissions from the transportation sector and cutting US oil use in half.

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