California Law Aims at Increasing Zero Emission Vehicle Sales

California Law Aims at Increasing Zero Emission Vehicle Sales

California has been known for leading the way when it comes to encouraging the sale of EVs, and once again the state is taking a new step by amending a law to sets a higher base limit for the number of zero-emissions vehicles each automaker has to sell in the state yearly. 

The law only pertains to the six largest automakers in the U.S., but will likely expand to all automakers by 2018.

The system uses credits, which are awarded to automakers every time they sell a zero-emissions vehicle. A base limit is set for the number of credits each company is expected to have by the end of one selling year. Credits can be bought and sold between automakers to make sure everyone meets the quota. This also adds a new dynamic to EV sales as the more you sell and as the credits accrue, companies are free to profit by selling those credits to other automakers that miss the quota.

Nissan has already begun banking credits, as the companies Leaf EV remains the best selling electric car in America. Tesla has also announced that it has sold some credits to Honda, to make sure Honda did not get dinged with fines over the last few years. The price for which these credits sell does not need to be disclosed, making them that much more desirable as automakers can jack up the price based on how badly a rival company needs them.

This may change some companies ideals about offering EVs, as the system offers a chance to get the upper hand on the competition, and hit them where it hurts, the pocketbook.

[Source: Automotive News]

  • T. Roll

    Stupid hippies. Way to ruin cars for everyone.