General Motors has proposed what it’s calling a “National Zero Emission Vehicle (NZEV) program” that would require automakers to sell a minimum volume of plug-in or fuel cell vehicles in the US. While this may sound like an innovative idea, it could dramatically undercut existing programs in states including California that are showing real leadership in cutting vehicle emissions. The GM proposal calls for a 50-state ZEV sales requirement of “15% credits” by 2025, but that doesn’t mean a 15% sales requirement. In fact, it would be far short of that, at best requiring less than 5 percent ZEV sales in the US by 2025, and potentially much less, while potentially undercutting both state-level electric vehicle requirements and federal greenhouse gas emission standards.
What are the main concerns with GM’s proposal?
#1 – Sales requirements through 2025 would be less than existing state standards
While GM’s proposal would call for less than 5 percent of new vehicle sales in 2025, California electric vehicle sales are already at 6 percent in the first half of 2018. The country as a whole is over 1.5 percent ZEV sales so far this year, over double the sales fraction just three years ago. Current requirements in California and nine other states require about 8 percent ZEV sales by 2025. So, if this proposal was adopted and removed state ZEV targets(as we suspect it would), the requirements in these leading states would be slashed and could be lower than current ZEV sales. This would undercut states’ ability to meet their climate and air quality goals and undermine charging infrastructure investments which are being made alongside current vehicle deployment goals.
#2 – Extra credits would further weaken vehicle sales requirements
GM also requests extra allowances for larger ZEVs, automated-drive ZEVs, and those in ridesharing fleets. While some of these vehicles could help reduce emissions, adding these extra credits would further erode the requirement. With these extra credits, the 2025 requirement would likely fall to 3-4 percent sales and 4-6 percent sales by 2030. And it’s not clear that some of these extra credits would be going to vehicles that are reducing emissions. For example, extra credits for larger vehicles could create the perverse incentive for automakers to make less efficient plug-in hybrids, resulting in more gasoline use. Giving extra credits to automated ZEVs assumes that they would drive more miles per year than other cars and therefore displace more gasoline-powered travel than a non-automated ZEV. However, it may be the case that these automated ZEVs increase the total amount of travel and thus either partially or fully negate the climate benefits of switching from gasoline to electricity or hydrogen.
State leadership on vehicle electrification is the reason there are now over 40 electric vehicle models available in some states, and the US is expected to hit the 1 million EVs sold milestone this month. Undercutting state ZEV targets could slow the needed transition away from petroleum to electric-drive transportation. State-level regulations also allow for coordinated incentives, infrastructure investment, and supportive policies that would unlikely to happen at the national level under the current administration. Also, while billed as a national program, there is no assurance that automakers would make efforts to sell ZEV’s outside the states where they currently offer ZEV models.
#3 – Off-ramp on battery-price and infrastructure provides little certainty past 2025
GM also wants to predicate the regulation on the availability of low-cost batteries and ZEV refueling and recharging infrastructure. While automakers are far from the only group that can help push R&D and infrastructure forward, it would be a dangerous policy choice to have a vehicle standard that could be invalidated by lack of effort or investment from automakers.
A national EV effort should complement efficiency and emissions standards, not undermine them.
Advancing vehicle electrification is important and a national effort that complements state EV deployment efforts and national fuel efficiency and greenhouse gas standards is a worthwhile discussion. But a national ZEV program as proposed by GM is no replacement for the fuel efficiency and carbon emission standards we have on the books today.
GM’s comments on the standards rollback suggests that this proposed NZEV program would replace the EPA’s current greenhouse gas standards for conventional vehicles. Doing so could result in vastly higher emissions as the vast majority of vehicle sales (over 95% in 2025) over the next decade would still be gasoline powered, and EPA would cede its authority to the Department of Transportation’s fuel economy regulations. And just how low would those future standards be? GM suggests a status quo rate of improvement of about 1 percent per year, far less than the 5 percent per year they’re required to achieve under current regulations. As they have for decades, they claim that tough rules are “infeasible” even though there are proven, cost-effective technologies available that will reduce emissions and gasoline costs for millions of Americans, and automakers should be implementing them.
Car companies like GM should be focused on meeting and beating existing standards and reject the Trump administration’s proposed rollbacks which would:
- Result in an additional 2.2 billion metric tons of global warming emissions by 2040—that’s 170 million metric tons in 2040 alone, equivalent to keeping 43 coal-fired power plants online
- Increase oil use. Cars and trucks will use an additional 200 billion gallons of gasoline by 2040—that’s as much oil as we’ve imported from the Persian Gulf since the standards were first finalized in 2010
- Cost consumers hundreds of billions of dollars—in 2040 alone, consumers will spend an additional $55 billion at the pump if these standards are rolled back
- Reduce employment, economy-wide, by 60,000 in 2025 and 126,000 in 2035;
- Reduce gross domestic product by $8 billion in both 2025 and 2035.
What policies would help reduce emissions and petroleum use?
For a start, we can stop the disastrous proposed rollback of current standards for automobiles.
The federal government should also abandon its illegal and unwarranted attack on California’s ability to set needed policies to reduce air pollution and climate changing emissions. And the federal government should be encouraging ZEV sales in all states, by extending vehicle incentives and increasing R&D spending on ZEV technologies. The world is moving to electric cars and away from gasoline and diesel. Good domestic policy choices can make sure that drivers save money on fuel, manufacturing and research jobs stay in the US, and we get on a path to reduce the worst impacts of climate change.
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