By Keith Crain, Crain News Service
DETROIT (May 20, 2013) — They are at it again in California. The mandates for zero-emission vehicles (ZEV) mean that to sell any volume there, you will need to have some sort of electric car for that market.
Several other states likely will enforce the same ZEV requirements, making it even more challenging for manufacturers. Some car companies may decide to get out of the California market because it doesn't make sense.
The California Air Resources Board (CARB) requires that by 2025 15.4 percent of all new cars sold in the state must be so-called zero-emission vehicles; that is, electric, plug-in hybrid or fuel cell vehicles.
An earlier proposed mandate by CARB about ZEVs sent many companies shopping. Ford Motor Co., for example, got Think, and Chrysler Group L.L.C. got Global Electric Motorcars (GEM). Now owned by Polaris, GEM is still around, but Think disappeared.
At one point the mandate was that ZEVs eventually would account for 10 percent of new-car sales in California. CARB realized that it wouldn't work then—and it probably won't now.
You can't mandate human behavior. If you make the incentives high enough, you can try to change behavior, but it's very expensive and time consuming.
For decades, governments around the world have been passing laws trying to force behavior. The automobile has been affected by a lot of those laws—all in the name of the common good.
Some rules and regulations were necessary. The gasoline engine emitted too many toxic gases, and rules were necessary. Today the gasoline engine is cleaner than ever—not clean enough for everyone but clean by most standards.
For a regulation to be successful, it needs the support of the consumer. Otherwise there won't be universal participation. Whether it's smoking cigarettes or texting while driving, consumers need to understand the risks and rewards.
There is a market for electric vehicles. It's small and growing. Without federal mandates and tax credits, you can never be sure how big the market would be. Without huge loans from the U.S. government, you don't know how many companies could have started, much less survived.
As long as the price of petroleum is reasonable, it will be tough for electrics to be anything more than a small part of a huge market.
But the real challenge will be education and marketing. Mandates usually don't work—and when they do, they're slow and cumbersome.
Keith Crain is editor-in-chief of Automotive News, a Detroit-based sister publication of Tire Business. He also is chairman of Crain Communications Inc., TB's parent company.