Automobile Industry's Electric-Car Power Play
State air board asked to rescind deadline
Greg Lucas, Sacramento Bureau Chief
Thursday, September 7, 2000
Sacramento -- The world's largest automakers are pushing hard for the state to abandon its first-in- the-nation requirement that at least 10 percent of the new cars sold in California in 2003 be nonpolluting. At a two-day hearing starting today, the state Air Resources Board will hear from more than 100 people, including the powerful opponents of its 1990 order and environmentalists who have battled for a decade to preserve it.
Automakers say there is almost no market for electric cars, which are expensive to make and hard to refuel. Environmentalists counter that there would be plenty of buyers if the cars were available.
The action the board takes tomorrow when the hearings conclude will be a key test of the environmental mettle of Gov. Gray Davis' administration, the first Democratic one in control since the requirement was issued.
Although the board will not make a final decision this week, it could relax the requirement by studying alternative ways to improve air quality -- which would be a victory for automakers.
Such a study could help carmakers make their case that there are better ways to lower emissions than requiring them to build expensive battery-powered or alternative-fuel vehicles.
``If California sticks with the mandate, it will accelerate investments in advanced-technology cars, which will have implications all over the world for future propulsion systems,'' said V. John White, the Sierra Club's chief lobbyist in Sacramento.
A report by the board's staff on how the mandate is working says nonpolluting cars offer ``comprehensive environmental, energy and societal benefits'' and represent the ``gold standard'' for air pollution control.
But the board, which is not bound by its staff recommendations, may make some concessions to carmakers.
``The mandate was all about clean air when it was adopted in 1990,'' said Steven Douglas, director of environmental affairs for the Alliance of Automobile Manufacturers, whose members include 13 of the world's largest automakers.
``The mandate should still be about clean air and not forcing electric vehicles on consumers,'' Douglas said.
Since it was instituted 10 years ago, the mandate has been attacked by carmakers and their oil industry allies. In 1996, the two factions teamed up, persuading the air board to abandon requirements that 2 percent of cars sold in 1998 be nonpolluting, increasing to 5 percent in 2001.
In return, automakers signed deals with the state committing them to building a certain number of nonpolluting cars, depending on their market share.
That requirement -- coupled with existence of the mandate -- has spurred more research into alternative-fuel cars and ``hybrids,'' which burn gasoline but use batteries to reduce pollution. Honda and Toyota sell two hybrid models.
Today there are 2,300 zero-emission cars and light trucks -- ZEVs, as the state calls them -- operating on California streets and highways. All have been sold during the past four years.
Under the mandate, the minimum number of zero-emission cars and light trucks that would have to be sold in 2003 is 22,000 -- a nearly tenfold increase.
That could climb higher depending on how many nonpolluting or low-polluting cars, such as hybrids, are on the highways by 2003.
But automakers say there is not enough consumer demand for 20,000 more electric vehicles.
Environmentalists counter that there are waiting lists of people who want nonpolluting cars but that carmakers are not building them.
Yesterday, the California ZEV Alliance, a group of 10 environmental and health groups backing the mandate, used an electric U.S. Postal Service truck to deliver more than 50,000 letters to the governor, urging him to stick with the mandate.
A poll by one of the alliance's members found that consumers would buy between roughly 150,000 and 226,000 electric cars each year if they were available at reasonable prices.
And that, automakers argue, is the heart of the problem.
Electric cars are not cheap. Building them is expensive, and battery costs are prohibitive.
They are also not as convenient as gasoline-fueled cars.
``Electrical vehicles cost twice as much as gas vehicles. The refueling time is four hours compared to five minutes, and the refueling stations are nonexistent,'' said Steven Douglas, director of environmental affairs for the Alliance of Automobile Manufacturers.
In its own study, the air board says freeway-capable ZEVs will cost $20,000 more to make than conventional cars -- not counting research and development costs borne by the manufacturer.
Without government subsidies, the board's study says, it will be difficult to woo consumers into abandoning their gasoline-powered cars for cleaner-performing vehicles that travel only 100 miles or so before they need recharging.
A bill awaiting action by Davis would offer $18 million in $3,000 grants to purchasers of zero-emission vehicles, well below the amount of subsidies needed.
The state's funding source for subsidies to zero-emission vehicle buyers is also drying up. The board may try to find a new source.
Environmentalists and alternative energy advocates contend that the cost argument used by carmakers is bogus.
``The five major automakers made $25 billion in profits in 1999, mainly from selling gas-guzzling higher polluting sports utility vehicles. It's time for an environmental dividend,'' said Jamie Knapp, a spokeswoman for the ZEV alliance.
Automakers say there are less expensive ways to improve air quality.
They contend that the state's steady ratcheting down of allowable emission levels for gas-powered cars has significantly increased air quality.
Forcing automakers to create expensive battery-powered cars that consumers do not want will have little effect on air quality.
Douglas says placing more than 20,000 more zero-emission cars on the road will reduce pollutants by 1 to 2 tons a day.
Regulations by the air board to reduce spills and emissions from lawn-mower gas cans will remove 26 tons of pollutants a day, Douglas said.
``The facts are crystal clear,'' said Douglas. ``Electric vehicles are astronomically expensive. The program is astronomically expensive, and the benefits are next to nil.''