California Sharply Limits Car Pollution

New rules will boost sales of electric cars — including those made by Bay Area companies
By: John Upton

Updated Jan. 27, 2012 at 12:37 p.m.

California has approved new rules that will force auto manufacturers to slash smog-producing tailpipe pollution by three-fourths, reduce greenhouse gas emissions and ensure that more than one out of seven cars sold can run on electricity within the next 13 years.

The futuristic fleet of vehicles mandated by the California Air Resources Board will be powered in part by revolutionary batteries and other components being developed and manufactured in the Bay Area, where Tesla Motors and other clean technology companies are clustered.

The Air Resources Board on Thursday discussed and heard testimony about the far-reaching regulations, which govern cars, pickup trucks and other light vehicles sold in California. Supporters say the rules will reduce air pollution, lung disease, household gas expenses and dependence on fossil fuels. Opponents say the rules will make cars more expensive.

Following a nearly nine-hour hearing in Los Angeles, the air board suspended the meeting and delayed a vote until Friday, when the board approved the rules 9-0.

As with other historic vehicle pollution laws adopted by California, such as the ban on leaded gasoline, the new rules are expected to spread to other states. 

The rules will take effect in six years and gradually grow more stringent. They will force manufacturers to improve the efficiency of their vehicles; reduce greenhouse gas emissions and other forms of tailpipe pollution; and increase sales of electric vehicles, plug-in hybrids and other zero-emission vehicles.

“These are enormous challenges,” John Cabaniss, environment and energy director for the trade group Global Automakers, told air board commissioners during the hearing Thursday. “But we have worked with [air board] staff over the past two years, and in some cases even longer, to build in the needed flexibilities, compliance options and federal harmonization elements that allow us to support the advanced clean-car package.”

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Some groups representing low-income communities of color, meanwhile, opposed the rules, saying that only wealthy motorists will be able to afford the mandated electric and plug-in hybrid cars and that the air pollution benefits will be greatest in those residents’ neighborhoods.

The air board forecasts that the new rules will inflate the average price of a new car by $1,900 by 2025 — or $35 a month in loan repayments. The reduction in fuel costs for a car owner is expected to average $48 a month, representing a $13 monthly savings, air board staff calculated.

“Consumers are reeling from high gas prices,” Jack Gillis, spokesman for the Consumer Federation of America, said in an interview. “The average household is paying over $2,800 a year in gasoline, and less than that for all the other energy needs in their home.”

Automakers have warned the air board that the rules would require automakers to make “tremendous investments” in research and development.

That argument has helped secure the support of clean technology and labor groups, which hope to see such development take place on American soil.

Substantial research and development work to bring electric vehicles, clean fuels and low-pollution vehicle components to market is under way in Silicon Valley and elsewhere in the Bay Area.

“Using smart policy to make the state a test bed for the development of new technologies can be a benefit to the Bay Area, because we are already an important center for the development of clean technologies in cars,” said Egon Terplan, the San Francisco Planning and Urban Research Association's regional planning director, who has studied the region’s clean technology sector. “This will only strengthen our advantages.”

In Palo Alto and Fremont, Tesla Motors is seeking to establish itself as a global leader in the electric vehicle market. The only vehicles currently sold by Tesla Motors are high-end roadsters, but the company plans to begin selling sedans priced under $50,000 this summer, followed by SUVs. Its business model relies on the sale of electric vehicle components to other auto companies, and it currently has contracts with Daimler and Toyota.

Electric vehicles on the market also include the Nissan Leaf and the Chevy Volt. Other manufacturers are planning to release similar products this year.

Thousands of electric vehicles are already being driven on California roads. The air board expects that the new rules will lead to the production of 1.4 million zero-emission vehicles in California by 2025.

“Our mission isn’t to just kind of hoard this technology and keep it for ourselves,” Ricardo Reyes, Tesla Motors’ spokesman, said in an interview. “Our objective is to convert the earth’s fleet into electric vehicles.”

In a sign of Tesla Motors’ zeal, the company recently reopened the shuttered NUMMI auto plant in Fremont, where as many as 5,000 people could eventually be put to work in manufacturing jobs.

Before electric vehicles can become widespread, however, charging stations must be installed in private and public garages and elsewhere.

“We can’t bring to market what consumers can’t refuel,” Robert Babik, environment director at General Motors, said during Thursday’s hearing.

The new rules would force gas stations to install hydrogen fuel, electricity and other clean-fuel charging facilities as the vehicles become more widespread in the state.

The Bay Area Air Quality Management District, meanwhile, is spending millions of dollars to help install thousands of home electric vehicle chargers and hundreds of public charging stations during the coming years.