By on April 7, 2014

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A change to the California Air Resources Board’s Zero-Emission Vehicle credit program will leave Tesla with four credits per car cold for the foreseeable future, down from seven credits for every Model S through 2013.

Bloomberg reports the change will award zero-emission vehicles with long-driving ranges and refueling times no greater than 15 minutes — such as the outgoing Honda FCX Clarity, with its hydrogen fuel cell technology — the maximum of nine credits, while Tesla — which had, until now, earned the maximum of seven — will receive four credits going forward due to failing the rapid-refueling requirement.

Tesla, the top seller of CARB ZEV credits to other automakers, has plans to introduce battery-swap stations that would allow drivers to exchange depleted packs for new ones in around one minute. However, until enough of the stations are in place, the 2014 Model S will be rebranded a Type III ZEV going forward.

The new standards — originally meant to be in place by October 2013 — were designed by CARB to emphasize actual use of ZEVs over theoretical capabilities.

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24 Comments on “CARB ZEV Credit Restructuring Leaves Tesla With Fewer Credits...”


  • avatar
    jpolicke

    This illustrates the ludicrous nature of the whole credit scheme. The FCX gets the full credit allowance because you can fill it in 15 minutes or less at a hydrogen station, of which there are 42 in the state, not all of them open to the public. Electricity is everywhere.

  • avatar
    pragmatist

    When a large part of your business model depends on government handouts, you must be prepared for changing winds.

  • avatar
    SCE to AUX

    Due to their increasing volumes, this won’t really hurt Tesla. But due to the numerous impossibilities with hydrogen, this won’t really help the mfrs foolish enough to try fuel cell vehicles.

    In any case, this credit scheme should be abolished.

    Also, Tesla should forget about battery swapping. It carries far more risk and complexity than the Supercharger network, with little upside.

  • avatar
    Landcrusher

    And here I though the credits game was actually about carbon emissions. Sure, I suspected much of it was really to create more ways to tax us.

    Even I didn’t suspect it was about a bunch of people getting on committees weilding power and influence. Now, if you are willing to put up with some inconvenience in an attempt to reduce your carbon footprint, you may get less credits? Seriously?

    • 0 avatar
      05lgt

      The only way this affects the user/consumer is if it causes a price adjustment on the vehicles. If credits become harder for Tesla and others to aquire, the cost they demand from the manufacturers purchasing them will likely make up for it, so the cost will be handed to the purchasers of brands that suck gas and spew carbon and Tesla drivers will continue to recieve yet another form of government mandated fund transfers. I’m not against the plan, we all live in the atmosphere the Hemi’s and Lambo’s pump carbon into, not just those of us who enjoy the acceleration.

      • 0 avatar
        Landcrusher

        If the credits have any value to the manufacturer, then they likely have an effect on not just the buyers, but even the rest of us.

        This ridiculous program is assigning value on features instead of letting the market do that. The effect, whether intended or not, is to make the manufacturers pay attention to, and attempt to manipulate, the committee. Ostensibly, the program is intended to create incentives to reducing carbon, not decide the desirability the market should have for faster charge times. The market is almost assuredly a better arbiter of the value of that feature.

        The brilliant joke on indulgences nailed it, IMO.

        • 0 avatar

          The problem is that pollutants aren’t accounted for by the market.

          But I agree with Luke (see below)–a revenue neutral carbon tax would be better, since it would avoid picking winners. For more on this, from a conservative perspective, see the Energy & Enterprise Institute http://energyandenterprise.com/

          • 0 avatar
            Landcrusher

            Hey David,
            My point isn’t to let the market account for pollution on its own, it’s to let the market account for features like charging time and range. I am not against a scheme to tax carbon or pollutants in order to make the market react.

            I am against schemes, such as these, which are simply layering more and more taxes on (carbon tax plus fuel tax), giving bureaucracies power to run our lives (taxing different models or areas of town differently), are ridiculously inefficient or unnecessarily burdening us all with big brother monitoring (GPS schemes).

          • 0 avatar
            Pch101

            The US and its states tend to pursue supply side approaches such as CAFE and the ZEV credit because levying a demand-side tax provokes the voters.

            It’s fine to gripe about this stuff, but the right needs to understand that these are compromise measures that are meant to appease their anti-tax zeal. If they aren’t prepared to offer any viable alternatives of their own, then they ought to stop whining. (And no, claiming that there should be no regulations at all is not an example of a viable alternative.)

          • 0 avatar
            Landcrusher

            I like how you are all cozy with the voters when they go your way, but ready to circumvent democracy as soon as they don’t. Try giving up on just the most ridiculous redistribution schemes and see if it isn’t easy to get things done.

          • 0 avatar
            Pch101

            Well done. All you did was whine, and not offer any alternatives, while failing to understand that the alternatives that are used were structured like this because of guys like you.

          • 0 avatar
            Landcrusher

            An appeal to doing the hard work of coming up with good policies and selling them to the voters rather than crying about how unfair life is and blaming everything on the rich is a “whine”?

          • 0 avatar
            Pch101

            Climate change is an issue, whether or not you like it.

            If you don’t like the current approaches, then provide a different one that (a) addresses the issue and (b) has a chance to make it through the political system.

            But acting like a bellowing ostrich who simply denies the issue altogether isn’t an option. Don’t be surprised when people who are required to deal with it don’t bother to listen to you, for you have nothing constructive to contribute.

          • 0 avatar
            Landcrusher

            Did you read my posts?

            Do you have any example schemes that would do anything significant about carbon that are not primarily a scheme to transfer power and wealth? Any?

            I have, on this site, many, many times supported increased fuel taxes. And you?

  • avatar

    I wonder what the Securities and Exchange Commission,or similar state level regulators in California, would do if it was a private business that set up a similar market for buying and selling these credits. Seems to me to be the functional equivalent to a completely unregulated securities market.

    • 0 avatar
      Pch101

      There are already a wide variety of business interests and tax credits that are traded privately, free of SEC involvement. You may think that all of this stuff is closely regulated, but that isn’t close to being the case.

      But there are very few parties that need ZEV credits, and they’re all in auto business. I would presume they talk to each other directly.

    • 0 avatar

      There does seem to be a certain arbitrary nature to it all.

      Your comparison to unregulated securities and derivatives is apt!

      • 0 avatar
        Luke42

        A revenue-neutral carbon tax, applied when hydrocarbons are extracted, would be far less arbitrary and would avoid picking winning or losing technologies.

        But it will never happen. The people who became rich under the current system have too much money/power to allow such a deep change. Oh, and it’s tax so nobody likes the idea, even if it would allow the reduction of other taxes.

  • avatar
    Hummer

    All of us end up paying for California’s BS, why can’t manufacturers up prices on everyone with California registration around 20-30% and drop the prices for the rest of us 5-10%?

    What a waste, needlessly driving up costs on cars that actually sell in high numbers because one state is so extreme they’re against seeing ther citizens thrive.


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