By on June 23, 2020

On Monday, Nevada Governor Steve Sisolak announced that his state will embrace California-crafted emissions rules that are at odds with the national rollback finalized by the Trump administration in March.

Officially, Sisolak said the rules would not require residents to abandon their current ride “or choose one that does not work for their lifestyle or business needs.” Nevada has, however, decided to adopt higher mpg standards, as well as the Golden State’s zero-emission vehicle (ZEV) rules that require manufacturers to sell a certain number of electric or plug-in hybrid models each year based on the total number of vehicles sold within the state.

Companies in compliance accrue ZEV credits, which can then be traded or sold to other manufacturers for money. As with the Corporate Average Fuel Economy (CAFE) system, those that cannot hit their targets (or afford to buy up credits) will be fined. Tesla actually used such arrangements to make $594 million off its rivals in 2019, with the prospect of things only getting more lucrative for the all-electric brand. 

The California Air Resources Board (CARB) releases annual credit bank balances each year, as well as the total number of vehicles produced for that model year broken down by type. And it has gotten quite popular among Democrat-run states, with many vowing to support California by adhering to its emission mandates (to varying degrees) instead of the revised federal standards.

According to Reuters, Nevada plans to enact the ZEV rules beginning in the 2025 model year, though automakers will be able to start earning credits starting in the 2023 model year. It will also adhere to the Obama-era mandates, deemed unsustainable by that administration’s own EPA, in solidarity with California. This requires 5 percent annual increases in efficiency through 2026 vs the current administration’s adjusted requirement of just 1.5 percent each year.

From Reuters:

California’s vehicle emissions rules, which are more stringent than rules advocated by the Environmental Protection Agency under President Donald Trump, are currently followed by states accounting for more than 40 percent of U.S. vehicle sales.

In September, a group of 23 states sued to block the Trump administration from undoing California’s authority to set strict car pollution rules and require more electric cars.

John Bozzella, who heads an auto trade group [the Alliance for Automotive Innovation] representing General Motors, Volkswagen Group, Toyota Motor Corp. and other major automakers, noted that by 2025, the industry’s investment in electric cars will exceed $200 billion.

“[Manufacturers] are committed to working with Governor Sisolak and state regulators toward a smoother transition to ZEV adoption that includes expanded consumer awareness, infrastructure, incentives, fleet requirements, building codes, fuel requirements, and more,” Bozzella said in a statement.

Automakers have been playing both sides of this argument for some time, so don’t consume any of their messaging on the issue without a side plate of skepticism. Their main goal is to avoid being shut out of any market while also avoiding punishment from regulators. Let’s not forget that industry leaders came to Donald Trump en masse during his first days in office to beg for an emissions rollback — among other favors. Former Ford CEO Mark Fields even told the then-novice president that the Obama-era rules would put a million American jobs in jeopardy. Maintaining factory employment ultimately turned out to be one of the keystone arguments used by the DOT and EPA to rationalize the rollback.

While we cannot speak to the validity of those claims, the general assumption is that EVs’ simpler hardware requires far fewer labor hours and less regular maintenance. Environmentalists have claimed this would be offset by new positions that blossom in the wake of advancing green tech, however.

[Image: RedTango/Shutterstock]

Get the latest TTAC e-Newsletter!

Recommended

27 Comments on “Silver and Gold: Nevada Joins California in the Gas War...”


  • avatar
    slavuta

    I’ve heard, Trump wants to restart nuclear testing….

  • avatar
    28-Cars-Later

    Nevada has fallen.

    Seriously though, quid quo pro with Tesla. You bring jobs to Nevada, we adopt edicts to create an artificial market for your product.

    • 0 avatar
      SCE to AUX

      Nevada already has the Tesla jobs, which will grow anyway.

      There are less than 5000 EVs registered in Nevada, and less than 2000 were sold there in 2018. It’ll never be a growth market for Tesla, or any other EV mfr.

      • 0 avatar
        indi500fan

        Wait til the Boring Company drills a 1700 mile MuskeTunnel from GigaNevada to TeraAustin to deliver batts to the truck plant.

      • 0 avatar
        28-Cars-Later

        Bigger picture: another domino falls in favor of CARB and likely won’t be the last. Tesla directly benefits from CARB’s lunacy and will see higher sales in other markets as the PRK alliance spreads to other states.

        • 0 avatar
          indi500fan

          It’s the classic government approach.
          They don’t have the guts to tax the fuel directly to incentivize conservation.
          So they pass regs to make vehicles more expensive.

          • 0 avatar
            Imagefont

            They should just have a tiered approach to taxing the vehicle – at the point of sale and annually for the license fee – make certain vehicles expensive. They’ve already done this by rewarding you with a payday for buying an EV. Kind of like congestion pricing for tolls – discourage you during the busiest times. If it cost you $1000 to renew your license tag on a pickup truck every year you might think twice about your purchase.

  • avatar
    SCE to AUX

    Good headline.

    This really has nothing to do with cars, or Tesla, or the stupid carbon credit system. It’s just another shot in the battle over states’ rights.

  • avatar
    redapple

    Scum bag government.

    They dont want you to drive large vehicles. But they BUY vehicles with total average MPG that is less than what the citizens buy.

    A**holes.

    Rules dont apply to us.
    Do what i say- not what i do.

    Total scumbags.

  • avatar
    Kendahl

    I have two questions:

    (1) Manufacturers have only two options for meeting the more stringent fuel economy standards. One is engineering which they claim is beyond their ability. The other is to subsidize “good” models, that customers don’t want, and make up the losses by inflating prices on the “bad” models they do want. What will stop a Nevada resident from buying a “bad” model out of state, where he can get a better price, and registering it at home?

    (2) What is the enforcement mechanism? Will the state send notice of the fine for noncompliance to the manufacturer’s head office in another state or even country? If a noncompliant manufacturer fails to pay up, what can the state do? Confiscate new vehicles? Revoke dealers’ business permits?

    • 0 avatar
      DenverMike

      Although it’s a “fine”, it would be collected at the point of sale, submitted quarterly, along with sales tax.

      The fines could be added to MSRP, or separate on the window sticker/monroney, but it amounts to the same.

      Except here’s where the corruption takes place: The fines are small enough so that automakers are encouraged to non compliance, but still add up to billions annually. Maybe around $1500 for an F-150, $2500 for a Hellcat and $80 for a Corolla non hybrid.

      Don’t quote me on those, but clearly this isn’t about emissions any more. Fines are well within the profitability of the worse offenders, like the Wrangler.

      So what’s the difference between what we have here and racketeering?

      • 0 avatar
        Old_WRX

        “PIRACY, n. Commerce without its folly-swaddles, just as God made it.”

        –The Devil’s Dictionary by Ambrose Bierce.

        @DenverMike, It is racketeering — under the de rigueur front of false virtue.

  • avatar
    Art Vandelay

    So serious question. If they actually just enforced the fines on the automakers that didn’t comply and in turn, shut down the whole buying and selling of credits side business, who gets hosed the most? The noncompliant car companies or the ones selling the credits?

    • 0 avatar
      28-Cars-Later

      The ones selling the credits. Tesla earned north of $1 billion between 2017 and 2019 by producing nothing, overhead may have been an accountant and attorney fees. I’m not going to dive into Tesla, but I would not be surprised if the “revenue” created the desperately needed cash flow in critical years like 2015 and 2016. Effectively, pick up buyers subsidized a failed company and the portfolios of many Wall Street and Cali shareholders making some very rich. All through fraud.

      “Based on the 2019 annual report, Tesla made about $594 million, $419 million and $360 million for the years ended December 2019, 2018 and 2017 respectively from selling regulatory credits alone. That’s quite a lot of money from a “product” literally with zero cost to produce.”

      https://stockdividendscreener.com/auto-manufacturers/teslas-regulatory-credits-revenue/#:~:text=ZEV%20and%20GHG%20Regulatory%20Credits&text=Based%20on%20the%202019%20annual,with%20zero%20cost%20to%20produce.

    • 0 avatar
      Art Vandelay

      That was sort of my thinking barring legislation that would make the fines seriously more punitive.

      • 0 avatar
        28-Cars-Later

        Light truck production really falls under the blanket of national security so in my view, repeal all fines. Artificially manipulating the market created Tesla, a company who likely could never have left boutique status without the preferential financial treatment given by government… the same government who cost the established automakers billions in R&D with near zero return.

  • avatar

    California did not get far enough IMHO. It should declare cut off date after which sales of new ICE vehicles will be considered illegal and will not be registered in California. Unless you do that mainstream companies will find all kind of excuses to avoid development and manufacturing EVs.

    On the other hand considering the anarchy and lawlessness the country is sinking into all these laws probably mean nothing. Who is going to enforce them, mob? Mob has better things to do.

  • avatar
    Oberkanone

    Revoke California exemption to set emissions standards. One nation, one standard!

    • 0 avatar
      Dartdude

      Don’t worry about California. With it’s one party socialistic government the state will be only rich and very poor. The middle class is leaving in droves. The rich will buy luxury cars and the poor will buy used cars. California’s market influence will diminish greatly.

      • 0 avatar
        28-Cars-Later

        “The middle class is leaving in droves.”

        To jack up the rest of the country in the way they did PRK.

        • 0 avatar

          There are plenty of conservatives in California too. Remember that Reagan was from California and as recently as in 2003 voters kicked out Democrat Governor and elected Republican who ruled until 2011. It is demographics that changed last years it is majority of “minorities” who overwhelmingly vote Democrat even though they are pretty conservative in their worldview. They just vote for easy handouts and unrestricted immigration.

  • avatar
    -Nate

    Those damn leftists….

    -Nate

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • la834: > “the Bronco II’s main competition coming from General Motors via the S-10 Blazer and S-15 Jimmy....
  • ect: I acquired an ’87 Jeep Cherokee as a company car. It was head and shoulders above the Bronco II.
  • bd2: Kia could have done better if they had more inventory of models like the Telluride (which was vastly outsold by...
  • ect: Ditto, Tim. Reality is that, as I joke with my friends, it’s hard to tell what’s a weekday and...
  • Jeff S: Ok I meant timing chain but either is bad. I believe the design was to save space under the hood. I love the...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Matthew Guy
  • Timothy Cain
  • Adam Tonge
  • Bozi Tatarevic
  • Chris Tonn
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber