State of California 

AIR RESOURCES BOARD 

FINAL STATEMENT OF REASONS FOR RULEMAKING 

Including Summary of Comments and Agency Responses 

2012 AMENDMENTS TO THE ZERO EMISSION VEHICLE REGULATIONS 

Public Hearing Date: January 26 and 27, 2012 

Agenda Item No.: 12-1-2 
2 

Table of Acronyms 

AB .................. Assembly Bill 

APU ................ Auxiliary Power Unit 

ARB ............... California Air Resources Board or the Board 

AT PZEV ....... Advanced Technology Partial Zero Emission Allowance Vehicle, typically a nonplug in hybrid such as the Prius 

BEV ................ Battery Electric Vehicle 

BEVx .............. Range Extended Battery Electric Vehicle 

CCR ............... California Code of Regulations 

CEC ............... California Energy Commission 

DC .................. Direct Current 

EAER ............ Equivalent All Electric Range 

Enhanced AT PZEV... Enhanced Advanced Technology Partial Zero Emission Allowance 

Vehicle, now called a Transitional Zero Emission Vehicle or TZEV 

FCV ................ Fuel Cell Electric Vehicle 

FSOR ............. Final Statement of Reasons 

g/mi ................ grams per mile 

GHG ............... Greenhouse Gas 

HICE .............. Hydrogen Internal Combustion Engine 

HOV ............... High Occupancy Vehicle Lane 

ICM ................ Indirect Cost Multiplier 

ILVM ............... Independent Low Volume Manufacturer 

ISOR ............. Initial Statement of Reasons 

IVM ................. Intermediate Vehicle Manufacturer 

kWh ................ Kilowatt-hour 

LCFS .............. Low Carbon Fuel Standard 

LDT ................ Light- Duty Truck with loaded vehicle weight up to 8500 pounds 

LEV I ............. First generation Low Emission Vehicle program, adopted in a 1990-1991 

rulemaking, and generally applicable in the 1994-2003 model years 

LEV II ............ Second generation Low Emission Vehicle program, adopted in a 1998 -1999 

rulemaking, and generally applicable in the 2004 and subsequent model years 

LEV III ............ Third generation Low Emission Vehicle program (criteria pollutant and 

greenhouse gas emission fleet standards), proposed as part of the Advanced 

Clean Cars rulemaking package in 2012, and generally applicable to 2015 and 

subsequent model years for Criteria Pollutants, and applicable to 2017 and 

subsequent model years for Greenhouse Gases. 

NEV ................ Neighborhood Electric Vehicle 

NHTSA ........... National Highway Traffic Safety Administration 

NMOG ........... Non-Methane Organic Gas 

NOx ............... Oxides of Nitrogen 

NMOG+ NOx.. ...Non-Methane Organic Gas plus Oxides of Nitrogen 

PC .................. Passenger Car 

PHEV ............ Plug-in Hybrid-Electric Vehicle 
3 

PM .................. Particulate Matter 

PZEV ............. Partial Zero Emission Allowance Vehicle, typically, a conventional gasoline, 

diesel, or natural gas vehicle that meets the most stringent standards for smogforming emissions 

Rcda ................. Charge Depleting Range Actual 

ROG .............. Reactive Organic Gases 

SAE ................ Society of Automotive Engineers 

SIP ................. State Implementation Plan 

SULEV ........... Super Ultra Low Emission Vehicle 

SVM ............... Small Volume Manufacturer 

Type 0 ........... Utility EV, less than 50 mile range 

Type I ............ City EV, range of 50 to less than 100 miles 

Type II ........... Full Function EV, range of 100 or more miles 

Type III .......... ZEV, range of 100 or more miles plus fast refueling, or 200 miles 

Type IV ........... ZEV, range of 200 or more miles plus fast refueling 

Type V ............ ZEV, range of 300 or more miles plus fast refueling 

TZEV .............. Transitional Zero Emission Vehicle, typically a plug-in hybrid electric vehicle 

UDDS ............ Urban Dynamometer Driving Schedule 

US06 .............. US06 drive schedule 

U.S. EPA ........ United States Environmental Protection Agency 

VMT .............. Vehicle Miles Traveled 

ZEV ............... Zero Emission Vehicle 

 
4 

State of California 

AIR RESOURCES BOARD 

Final Statement of Reasons for Rulemaking, 

Including Summary of Comments and Agency Response 

PUBLIC HEARING TO CONSIDER THE ADOPTION OF THE 2012 AMENDMENTS TO 

THE CALIFORNIA ZERO EMISSION VEHICLE REGULATION 

Public Hearing Date: January 26 and 27, 2012 

Agenda Item No.: 12-1-2 

I. GENERAL 

A. Summary 

In this rulemaking Air Resources Board (ARB or the Board) has amended its regulation 

that requires automobile manufacturers to develop and commercialize zero emission 

vehicle (ZEV) technologies. The amendments have increased ZEV percentage 

requirements for model years 2018 through 2025, given manufacturers increased 

flexibility to comply with ZEV requirements, simplified the credit system for ZEVs and 

plug-in hybrid electric vehicles (PHEV), also referred to as transitional zero emission 

vehicles (TZEV), and created an optional compliance path for manufacturers in the 

Section 177 States. These ZEV amendments are part of ARBs Advanced Clean Cars 

program, a coordinated package of requirements for model year 2015 through 2025 

light duty vehicles, which included amendments to the Low Emission Vehicle (LEV) 

criteria pollutant and greenhouse gas (GHG) standards, ZEV regulation, and the Clean 

Fuels Outlet (CFO) regulation. Continuing its leadership role in developing innovative 

and ground breaking emission control programs, ARB developed the Advanced Clean 

Cars program, a pioneering approach for a set of regulations, although separate in 

construction, related in terms of the synergy developed to address both ambient air 

quality needs and climate change. 

The Staff Report: Initial Statement of Reasons for Rulemaking (ISOR or staff report), 

“2012 Proposed Amendments to the California Zero Emission Vehicle Program 

Regulations,” was released December 7, 2011. The staff report, which is incorporated 

by reference herein, contained a description of the rationale for the proposed 

amendments. On December 7, 2011, all references relied upon and identified in the 

staff report were made available to the public. 
5 

The Board received written and oral comments at the hearing. At the conclusion of the 

hearing, the Board adopted Resolution 12-11, in which it approved the originally 

proposed amendments along with several modifications, some of which were suggested 

by staff in a document entitled “Proposed Modifications to Staff Proposal,” distributed at 

the hearing. Resolution 12-11 directed the Executive Officer to make the text of the 

modified proposal, with other conforming modifications as might be appropriate, 

available to the public for a supplemental written comment period of at least 15 days. 

The Executive Officer was then directed either to adopt the amendments with such 

additional modifications as might be appropriate in light of the comments received, or to 

present the regulations to the Board for further consideration if warranted. 

The regulatory text with the modifications clearly identified was made available starting 

February 22, 2012, for a 15-day comment period ending March 8, 2012, by issuance of 

a Notice of Public Availability of Modified Text and supporting documents. Nine written 

comments were received. 

After considering the comments received during the supplemental comment period, the 

Executive Officer determined that it was appropriate to present the modified regulatory 

language to the Board for further consideration. Subsequently, on March 22, 2012, per 

Resolution 12-21, the Board considered the Environmental Analysis (Appendix B to the 

ZEV ISOR) and the Response to Environmental Analysis Comments in accordance with 

the requirements of CEQA and ARB’s certified regulatory program, and adopted the 

Findings and Statement of Overriding Considerations and adopted the final Advanced 

Clean Car regulations, including the modified ZEV regulation. The adopted regulation 

reflects the final modifications that were made available for the supplemental comment 

period. 

This Final Statement of Reasons for Rulemaking (FSOR) updates the Staff Report by 

identifying and explaining the modifications that were made to the original proposal at 

the Board’s direction and in response to comments, and summarizes and responds to 

written comments and hearing testimony. The Board has amended the following 

section of title 13, in the California Code of Regulations (CCR): section 1962.1 for Zero 

Emission Vehicle Standards for 2009 through 2017 Model Year Passenger Cars, LightDuty Trucks, and Medium-Duty Vehicles, (renamed from “Zero-Emission Vehicle 

Standards for 2009 and Subsequent Model Year Passenger Cars, Light-Duty Trucks, 

and Medium-Duty Vehicles”) and its incorporated test procedures "California Exhaust 

Emission Standards and Test Procedures for 2009 through 2017 Model Zero-Emission 

Vehicles and Hybrid Electric Vehicles, in the Passenger Car, Light-Duty Truck and 

Medium-Duty Vehicle Classes” (renamed from “California Exhaust Emission Standards 
6 

and Test Procedures for 2009 and Subsequent Model Zero-Emission Vehicles and 

Hybrid Electric Vehicles, in the Passenger Car, Light-Duty Truck and Medium-Duty 

Vehicle Classes”). The Board has amended and renumbered the section 1962.2 

“Electric Vehicle Charging Requirements” of title 13, CCR to section 1962.3. The Board 

has adopted the following section of title 13, CCR: section 1962.2 for Zero Emission 

Vehicle Standards for 2018 and subsequent Model Year Passenger Cars, Light-Duty 

Trucks, and Medium-Duty Vehicles, and its incorporated test procedures "California 

Exhaust Emission Standards and Test Procedures for 2018 and Subsequent Model 

Zero-Emission Vehicles and Hybrid Electric Vehicles, in the Passenger Car, Light-Duty 

Truck and Medium-Duty Vehicle Classes”. 

B. Incorporation of Materials by Reference 

The following documents are incorporated by reference in the regulations: 

(1) SAE J2481 “Utility Factor Definitions for Plug-In Hybrid Electric Vehicles Using 

2001 U.S. DOT National Household Travel Survey Data,” as revised in March 

2009 

(2) ETA-NTP002 (revision 3) “Implementation of SAE Standard J1666 May 93: 

Electric Vehicle Acceleration, Gradeability, and Deceleration Test Procedure,” 

adopted on December 1, 2004 

(3) ETA-NTP004 (revision 2) “Electric Vehicle Constant Speed Range Tests,” 

adopted on February 1, 2008 

(4) SAE J1772 “SAE Electric Vehicle and Plug in Hybrid Electric Vehicle Conductive 

Charge Coupler,” as revised in January 2010 

C. Fiscal Impacts 

In developing this regulatory proposal, ARB staff evaluated the potential economic 

impacts on representative private persons or businesses. ARB estimates the total 

impact of ZEV regulation to regulated manufacturers, apart from all other regulations, to 

be $10.2 billion, from model year 2018 through 2025 compliance. 

Pursuant to Government Code sections 11346.5(a)(5) and 11346.5(a)(6), the Executive 

Officer determined that the regulatory action would not create costs or savings to any 

state agency or in federal funding to the state, costs or mandate to any local agency or 

school district whether or not reimbursable by the state pursuant to part 7 (commencing 

with section 17500), division 4, title 2 of the Government Code, or other 

nondiscretionary savings to state agencies. 
7 

The Executive Officer has also determined, pursuant to CCR, title 1, section 4, that the 

proposed regulatory action would affect small businesses. Modifications to the ZEV 

regulation could indirectly affect small businesses by creating or expanding electric 

vehicle supply equipment companies and ZEV component suppliers to support greater 

volumes of ZEVs, possibly provide fuel cost savings to small businesses who choose to 

purchase ZEVs that become more widely available, and gasoline retail stations 

operated as small businesses may see a decline in sales due to reduced demand for 

gasoline.

D. Consideration of Alternatives 

The Board has further determined that no alternative considered by the agency would 

be more effective in carrying out the purpose for which the regulatory action was 

proposed or would be as effective as and less burdensome to affected private persons 

than the action taken by the Board. 

II. MODIFICATIONS MADE TO THE ORIGINAL PROPOSAL 

The following sections summarize the substantive modifications and the rationale for 

making such modifications as released on February 22, 2012, for public comment. 

Optional Section 177 State Compliance Path 

Staff’s modifications include an optional Section 177 state ZEV compliance path 

available for intermediate volume manufacturers (IVM) and large volume manufacturers 

(LVM). In order to be eligible for this optional compliance path, manufacturers must 

place additional battery electric vehicles (BEV) in the Section 177 states equal to 0.75 

percent of sales in 2016 model year and 1.5 percent of sales in 2017 model year. 

These obligations cannot be met with “traveled” credits, and are in addition to the 

existing requirements (i.e. 3 percent in each year) which can be met with “traveled” 

credits. Existing carry-forward and carry-back provisions will remain available to 

manufacturers. In exchange for these pre 2018 ZEVs placed in Section 177 states, 

manufacturers will have the following reductions in their allowed TZEV percentage and 

minimum ZEV requirement: 
8 

Optional Compliance Path Section 177 State Allowed TZEV Credit Percentage 

2015 2016 2017 2018 

Percentage Reduction for 

TZEVs 25% 20% 15% 10% 

New TZEV Credit % in 

Section 177 states 2.25% 2.40% 2.55% 2.25% 

Optional Compliance Path Section 177 State Minimum ZEV Credit Percentage 

2018 2019 2020 

Percent Reductions for 

Minimum ZEV Floor 37.5% 25% 12.5% 

New minimum ZEV Credit % 

in Section 177 States 1.25% 3% 5.25% 

In addition to the above credit percentage reductions, manufacturers on this optional 

compliance path will be allowed to “pool” their TZEV and ZEV credits within two regional 

pools: an East Region pool and a West Region pool. The East Region pool will be 

defined as Section 177 states east of the Mississippi River. The West Region pool will 

be defined as the Section 177 states located west of the Mississippi River. Currently, 

the East Region includes the following states: Connecticut, Maine, Maryland, 

Massachusetts, Rhode Island, New Jersey, New York, and Vermont. The West Region 

currently includes the following states: New Mexico and Oregon. Pooling for TZEV 

credits shall begin in 2015 model year through 2021 model year, and pooling for ZEV 

credits shall begin in 2016 model year through 2021 model year. Trading between the 

East and West pools is allowed at a 30 percent premium. For example, a manufacturer 

wanting to trade from its East to West pool would take 130 credits from its East pool, 

and move those credits to its West pool, where the traded credits would be worth 100 

credits in its West pool. IVMs or LVMs must submit written notification for choosing this 

path no later than September 1, 2014. Pooling will be assessed on whether the system 

is working as intended and considered for model years beyond 2021 at a later review of 

ZEV regulation. Regulatory language has been added to subdivisions 1962.1(d)(5)(E)3. 

(and in the incorporated test procedures) and 1962.2(d)(5)(E)3. (and in the incorporated 

test procedures) to reflect this optional compliance path. 

All parties reserve the right to reevaluate this proposal and/or any subsequent 

agreement in the event of other significant changes to California’s proposed regulation, 

including changes to California volume requirements. Any changes would need to be 

addressed in a subsequent rulemaking. 
9 

GHG-ZEV Over-Compliance 

The Board directed staff to advance the final application date for manufacturers 

choosing to use GHG-ZEV over-compliance provision from May 1, 2018 to December 

31, 2016. This will allow staff to consider information on manufacturers’ plans to overcomply with GHG fleet standard in the mid-term review, scheduled to take place in 2017. 

Additionally, as provided in “Attachment E" which was made available at the Board 

Hearing, staff’s modifications include a provision which states that the GHG-ZEV overcompliance provision is only available if the Board accepts compliance with the Federal 

GHG fleet standard as compliance with the California GHG fleet standard. 

Partial Allowance Zero Emission Vehicle (PZEV) Certification 

Staff’s modifications include allowing manufacturers to certify 2014 model year PZEVs 

to the new LEV III standards (Third Generation Lower Emission Vehicle Program), 

which include the super-ultra-low-emission vehicle (SULEV) 20 certification. This 

modification reflects what is allowed under the LEV III regulation. Additionally, staff’s 

modifications allow 2015 model year through 2019 model year vehicles (PZEVs, 

advanced technology PZEVs, and TZEVs) to certify to LEV II (Second Generation 

Lower Emission Vehicle Program) exhaust and evaporative emission standards to 

conform to with what is allowed under the LEV III regulation. 

Same Year Method for Calculating the Number of Vehicles to Which the 

Percentage ZEV Requirement is Applied 

Staff’s changes modify the criteria by which the Executive Officer is to make a decision 

allowing a manufacturer to use the same year method, as opposed to the previous 

second, third, and fourth model year average, when a manufacturer experiences a 30 

percent drop in sales rather than 40 percent drop in sales. 

Staff analyzed manufacturers’ sales data from periods in which there were significant 

drops in vehicle sales. Based on this analysis, staff considers a 30 percent decline from 

one model year to the next represents a significant impact to a manufacturer, and is an 

appropriate threshold for allowing a manufacturer to choose the same year method to 

determine its ZEV requirements. 

TZEV Credit Calculation for 2018 and Subsequent Model Years 

It has been brought to staff’s attention that the use of actual charge depleting range 

(Rcda) for TZEV credit determination might be “gamed” with vehicles equipped with 

battery systems that may not maintain sufficient power output through several urban 

dynamometer drive schedule (UDDS) driving cycles to meet the acceleration 

requirements on electric power alone, and that equivalent all electric range (EAER) 
10 

would better reflect usable battery capacity. Without the proposed change, blended 

PHEVs would earn the same credit as PHEVs that could maintain higher power 

throughout a UDDS range test, where test results would show EAER equal to Rcda. The 

modified calculation bases credit on EAER instead of Rcda. This modification will not 

result in a change in credit for most PHEVs, and will allocate credit proportional to the 

amount of usable energy available on a particular PHEV, a more appropriate metric for 

PHEV performance in the ZEV regulation. 

Definition Changes 

At the January 2012 hearing, the Board directed staff to resolve remaining 

inconsistencies regarding the timing of when manufacturers are subject to the large 

volume and intermediate volume ZEV requirements as a result of changing size 

definition categories for any reason, including change of ownership situations. Staff 

modified regulatory language in section 1962.1, CCR, and in the incorporated test 

procedure, to ensure manufacturers changing size due to change of ownership would 

be subject to stepped-up requirements starting in 2018. 

Delivered for Sale and Placed in Service 

Staff’s modifications allow manufacturers to earn both delivered for sale and placed in 

service credits for a ZEV, as long as ZEV is delivered for sale in either California or a 

Section 177 state, and placed in service in California or a Section 177 state. Frequently, 

among Section177 states in the Northeast, dealers trade vehicles across state lines and 

manufacturers have little control over where the vehicles are placed in service. 

Additionally, staff’s modifications specify that the total credit for the vehicle (meaning the 

delivered for sale credit plus the placed in service credit) will be earned in the state in 

which ZEV is originally delivered for sale. 

Hydrogen Internal Combustion Engine Vehicles 

Staff’s modifications include adding back subdivision 1962.1(c)(3)(B) and subdivision 

C.3.3(b), CCR, which allow hydrogen internal combustion engine vehicles to qualify for 

zero-emission vehicle miles traveled (VMT) PZEV allowance. Manufacturers have 

indicated interest in hydrogen internal combustion engine vehicles, and those vehicles 

will continue to qualify as TZEVs in 2012 and subsequent model years. 

Alternative Charge Connector 

Staff’s modifications include an alternative approval process in section 1962.3, CCR, for 

vehicles with Society of Automotive Engineers (SAE) J1772 AC “equivalency” when 

equipped with a manufacturer provided, safety-listed adapter. This provides flexibility 

for manufacturers as a direct current (DC) fast charge connector standard is being 

developed and adopted. 
11 

Upstream Emissions and Harmonizing with Federal Regulations 

The Board directed staff to have manufacturers include upstream emissions associated 

with ZEVs and TZEVs in their calculation of GHG-ZEV over compliance credits in 2018 

through 2021 model year. When staff subsequently updates the regulation to 

harmonize with the Federal standard, it will make appropriate changes to the regulatory 

language to ensure upstream emissions associated with ZEVs and TZEVs are included 

in a manufacturer’s calculation of GHG-ZEV over compliance credits. 

Minor Modifications 

Other post-hearing conforming modifications were made to the regulation for 

clarification and simplification: 

Minor modifications for Section 1962.1 and the incorporated Test Procedure 

1962.1(b)(1)(B)2. and C.2.1(b)(2): References to light-duty truck “2” (LDT2) have been 

removed from this section because the phase in of LDT2s in manufacturer’s applicable 

sales volumes will be completed after model year 2011. 

1962.1(c)(3)(A) and C.3.3(a): References to the “California Exhaust Emission 

Standards and Test Procedures through 2017 Model Zero-Emission Vehicles, and 

Hybrid Electric Vehicles, in the Passenger Car, Light-Duty Truck and Medium Duty 

Vehicle Classes” have been updated, as well as the reference to the equation used to 

determine the utility factor manufacturers are to use to calculate a zero-emission VMT 

allowance. 

1962.1(d)(5)(E)1. and 2., and C.4.5(e)(1) and (2): Regulatory language has been 

clarified to specifically apply the provision to LVMs and IVMs, which are the only 

manufacturers with a ZEV requirement. Additionally, language in subdivisions 

1962.1(d)(5)(E)1.b. and C.4.5(e)(1)(B) has been clarified to match the regulatory 

language in subdivisions 1962.1(d)(5)(E)1.a. and C.4.5(e)(1)(A). 

1962.1(g)(2)(A) and C.7.2(a): Regulatory language has been clarified to accurately 

reflect how ZEV credits are calculated. Additionally, language has been added to 

specify how credits are calculated for model years 2015 through 2017. 

1962.1(g)(2)(B) and C.7.2(b): Regulatory language has been clarified to accurately 

reflect how PZEV credits are calculated. Additionally, language has been added to 

specify how credits are calculated for model years 2015 through 2017. 
12 

1962.1(g)(2)(A) and (B), and C.7.2(a) and (b): Regulatory language has also been 

clarified to reflect that manufacturers may use the LDT2 non-methane organic gas 

(NMOG) fleet average when calculating the amount of credits earned by LDT2 PZEVs 

and ZEVs in model year 2009 through 2011. For 2012 through 2014 model years, 

manufacturers are only allowed to use their passenger car (PC) and light-duty truck “1” 

(LDT1) NMOG average when calculating PZEV and ZEV credits. 

1962.1(g)(5)(A) and C.7.5(a): Regulatory language has been clarified to specify that 

transportation system credits for 2009 through 2011 ZEVs can qualify for the travel 

provision. The language has been corrected to show that TZEVs, Type I.5x vehicles 

and Type IIx vehicles can earn transportation system credits through model year 2017. 

1962.1(g)(5)(C)2. and C.7.5(c)(2): The language has been clarified to specify how the 

cap for transportation system credits earned by TZEVs applies if a manufacturer 

chooses to comply with the optional Section 177 state compliance path. 

1962.1(g)(6)(A) and C.7.6(a): The language has been clarified to specify how the cap 

for both 2001 through 2005 neighborhood electric vehicles (NEV) and 2006 and through 

2017 NEVs applies if a manufacturer chooses to comply with the optional Section 177 

state compliance path. 

1962.1(i)(5) and B.1: A definition for “conventional rounding method” has been added 

to clarify how credits are rounded in the ZEV bank and when doing ZEV calculations. 

1962.1(i)(6) and B.1: A definition for “East Region pool” has been added due to the new 

optional Section 177 state compliance path. 

1962.1(i)(7) through (18): These subdivisions have been renumbered due to the 

addition of new definitions. 

1962.1(i)(17) and B.1: A definition for “West Region pool” has been added due to the 

new optional Section 177 state compliance path. 

Section D.3: A sentence was added to Section D in the 2009 through 2017 

incorporated test procedures in staff’s initial proposal, but was not properly underlined. 

The new sentence, which requires manufacturers to update their annual NMOG reports 

if their production numbers on their ZEV reports have been updated, has been indicated 

by a double underline. 
13 

Section F: The section F title in the 2009 through 2017 incorporated test procedure has 

been modified to reflect that section F applies to 2012 through 2017 model ZEVs and 

hybrid electric vehicles. Additionally, a reference has been corrected in the first 

paragraph of this section due to renumbering of test procedure sections. 

Section G: The section G title in the 2009 through 2017 incorporated test procedures 

has been modified to reflect that section G applies to 2012 through 2017 model offvehicle charge capable hybrid electric vehicles, which are commonly referred to as 

PHEVs. Additionally a new section G.12 has been added to establish the calculations 

that must be used to determine the GHG emissions values attributable to PHEVs for the 

2017 model year. 

 

Minor Modifications for 1962.2 and the Incorporated Test Procedures 

1962.2(a) and C.1: The language has been clarified to reflect that GHG emissions from 

a vehicle’s air conditioning system will not exclude the vehicle from counting as a ZEV. 

1962.2(c)(3)(A)1. and C.3.3(a)(1): The language has been corrected with the 

appropriate acronym for all electric range, which is AER, not Rcda. Additionally, the 

reference to the “California Exhaust Emission Standards and Test Procedures for the 

2018 and Subsequent Model Zero-Emission Vehicles, and Hybrid Electric Vehicles in 

the Passenger Car, Light-Duty Truck, and Medium Duty Vehicle Classes” has been 

corrected. 

1962.2(d)(5)(E) and C.4.5(e): The language has been clarified to specifically apply the 

provision to LVMs and IVMs, which are the only manufacturers with a ZEV requirement. 

1962.2(d)(5)(G) and C.4.5(g): The minimum range qualification has been corrected 

from 80 miles range to 75 miles range for range extended battery electric vehicles 

(BEVx) to match the minimum requirements for BEVxs in 2012 through 2017. 

1962.2(g)(2)(A) and C.7.2(a): The language has been clarified for how ZEV credits are 

calculated if a manufacturer chooses to comply with the optional Section 177 state 

compliance path. 

1962.2(g)(2)(B) and C.7.2(b): The language has been clarified for how TZEV credits 

are calculated if a manufacturer chooses to comply with the optional Section 177 state 

compliance path. 
14 

1962.2(g)(5)(C)1 and C.7.5(c)(1): The language has been clarified to specify how the 

cap for transportation system credits earned by ZEVs applies if a manufacturer chooses 

to comply with the optional Section 177 state compliance path. 

1962.2(g)(5)(C)2 and C.7.5(c)(2): The language has been clarified to specify how the 

cap for transportation system credits earned by TZEVs applies if a manufacturer 

chooses to comply with the optional Section 177 state compliance path. 

1962.2(g)(6)(A) and C.7.6(a): The language has been clarified to specify how the cap 

for discounted PZEV and Advanced Technology Partial Zero Emission Allowance 

Vehicle (AT PZEV) credits and NEV credits applies if a manufacturer chooses to comply 

with the optional Section 177 state compliance path. 

1962.2(g)(6)(B)2.a and C.7.6(b)(2)A.: The language has been corrected to reference 

the correct subdivision within section 1961.3. 

1962.2(i)(3) and B.1.: A definition for “conventional rounding method” has been added 

to clarify how credits are rounded in the ZEV bank and when doing ZEV calculations. 

1962.2(i)(5) and B.1.: A definition for “East Region pool” has been added due to the 

new optional Section 177 state compliance path. 

1962.2(i)(4) – (19): These subdivisions have been renumbered due to the addition of 

new definitions. 

1962.2(i)(17) and B.1.: A definition for “West Region pool” has been added due to the 

new optional Section 177 state compliance path. 

1962.2(j): Some abbreviations have been removed because they no longer apply nor 

are used in the regulatory text. 

Section B.1: Definitions for discounted PZEVs and AT PZEV credits, energy storage 

device, hydrogen fuel cell vehicle, and hydrogen internal combustion engine vehicle 

have been added to the 2018 and subsequent model year test procedures to reflect 

definitions included in section 1962.2. 

Section F: The section F title has been modified in the 2018 and subsequent model year 

incorporated test procedures to reflect that section F applies to 2018 and subsequent 

model ZEVs and hybrid electric vehicles. Additionally, a sentence has been removed 

that stated manufacturers may certify 2009 through 2011 model year ZEVs and hybrid 
15 

electric vehicles because the sentence will not apply in the 2018 and subsequent model 

year timeframe. 

 

Section G: The section G title has been modified in the 2018 and subsequent model 

year incorporated test procedures to reflect that section G applies to 2018 and 

subsequent model ZEVs and hybrid electric vehicles. Additionally, a sentence has been 

removed that stated manufacturers may certify 2009 through 2011 model year PHEVs 

because the sentence will not apply in the 2018 and subsequent model year timeframe. 

Section J: Section J has been deleted from the 2018 and subsequent model year 

incorporated test procedures because the test procedures for 2009 through 2011 model 

ZEV and hybrid electric vehicles no longer apply. 

 

Other Modifications 

Modifications that correspond with those described for the regulations were also made 

to the incorporated test procedures. For both the regulations and the test procedures, 

ARB also made other non-substantial modifications for clarification such as correcting 

typographical, grammatical or numbering errors, and correcting references and cross 

references. 

III. MODIFICATIONS MADE SUBSEQUENT TO THE 15-DAY PUBLIC 

COMMENT PERIOD 

Subsequent to the release of the 15-day notice, staff noticed a couple of inconsistencies 

in the proposed modified regulatory language and test procedure language. These nonsubstantive mistakes to the test procedure language, described below, have been 

corrected in the final versions of this document. 

Non-Substantive Corrections to the Regulations 

In a 45-day comment, it was brought to staff’s attention that the use of Rcda for TZEV 

credit determination might be “gamed” with vehicles equipped with battery systems that 

may not maintain sufficient power output through several UDDS driving cycles to meet 

the acceleration requirements on electric power alone, and that EAER would better 

reflect usable battery capacity. Changes were made throughout subdivision 

1962.2(c)(3)(A) to reflect this change. The final regulation text had However, Rcda was 

erroneously not removed from the title row of the table in subdivision 1962.2(c)(3)(A) 

and replaced with EAER. The final, adopted regulations correct this error. 
16 

Minor non-substantive corrections were also made to the final regulation text in 

title 13, section 1962.1, subsections (c)(3)(A), (h)(1), (i)(3), and (j), in order to match the 

regulation text as published in the California Code of Regulations. 

Non-Substantive Corrections to the 2009 through 2017 Test Procedures 

1. In response to a 45-day comment, in the regulatory text accompanying the 15 -day 

notice, language in subdivision 1962.1(c)(2)(A) was modified to allow manufacturers to 

certify 2014 model year PZEVs to the new LEV III exhaust standards and allow 2015 

model year through 2017 model year PZEVs to certify to LEV II exhaust emission 

standards. Language that should be identical to this section of the regulations also 

appears in section C.3.2(a) of the test procedures. However, when the proposed 15-

day changes to the test procedures were released, the language was not updated in 

section C.3.2(a). The final, adopted regulations correct this oversight and maintain 

consistency by updating the language to reflect the official regulatory language in 

section C.3.2(a). 

2. In response to a 45-day comment, in the regulatory text accompanying the 15-day 

notice, regulatory language in subdivision 1962.1(c)(2)(B) was modified to allow 

manufacturers to certify 2014 model year PZEVs to the new LEV III evaporative 

standards and allow 2015 model year through 2017 model year PZEVs to certify to 

LEV II evaporative emission standards. Language that should be identical to this 

section of the regulations also appears in section C.3.2(b) of the test procedures. 

However, when the proposed 15-day changes to the test procedures were released, the 

language was not updated in section C.3.2(b). The final, adopted regulations correct 

this oversight and maintain consistency by updating the language to reflect the official 

regulatory language in section C.3.2(b). 

3. Throughout the 2009 through 2017 model year test procedure, references to 

sections E and F were updated, due to a new section E being added to the test 

procedure. However, references made to the correct sections were not updated in 

section D.2.6(c). The final adopted regulations correct this oversight and correctly 

reference the updated section numbers in section D.2.6(c). 

Non-Substantive Corrections to the 2018 and subsequent Model Year Test 

Procedures 

1. As in the regulations, in a 45-day comment, it was brought to staff’s attention that the 

use of Rcda for TZEV credit determination might be “gamed” with vehicles equipped with 

battery systems that may not maintain sufficient power output through several UDDS 
17 

driving cycles to meet the acceleration requirements on electric power alone, and that 

EAER would better reflect usable battery capacity. Changes were made throughout 

subdivision C.3.3(a) to reflect this change. However, Rcda was erroneously not removed 

from the title row of the table in subdivision C.3.3(a) and replaced with EAER. The final, 

adopted regulations correct this error. 

2. References in section D.2.6(c), D.2.10, and D.2.11 erroneously refer to the incorrect 

sections within the 2018 and subsequent model year test procedures. The final 

adopted regulations correct this oversight and correctly reference the corrected section 

numbers in sections D.2.6(c), D.2.10, and D.2.11. 

The changes listed above do not materially alter any requirement, right, responsibility, 

condition, prescription, or other regulatory element of any California Code of 

Regulations provisions. 

IV. CORRECTION TO REFERENCES 

Staff identified several typographical errors and other minor problems in some of the 

references that were listed in the ISOR. For clarity, the following is an identification of 

these errors and the necessary corrections. 

1. In Chapter 1, “Introduction”, page 4, the reference for ARB, 2009a erroneously 

refers to the May 19, 2009, update as the date of the Climate Change Scoping 

Plan. This is the incorrect date. The correct date is December 2008. The 

correct reference should be as follows: 

ARB, 2009a. California Air Resources Board. December 2008. “Climate 

Change Scoping Plan” 

http://www.arb.ca.gov/cc/scopingplan/document/adopted_scoping_plan.pdf 

2. The references contained in the reference list on page 12 in Chapter I, 

“Introduction” were corrected as follows: 

In Chapter 1, “Introduction,” page 12, the reference for Honda, 2011 erroneously 

refers to an article with an incorrect title. The correct title should be “Honda at 

the Los Angeles Auto Show: Fact Sheet.” The correct reference should be as 

follows: 

Honda, 2011. Honda Motor Company, LTD. Press Release, November 17, 2010. 

“Honda as the Los Angeles Auto Show” 
18 

http://www.hondanews.com/channels/honda-automobilesconcepts/releases/honda-at-the-los-angeles-auto-show-fact-sheet 

In Chapter 1, “Introduction,” page 12, the reference for USA TODAY, 2010 

erroneously refers to the March 18, 2010, as the date of the USA Today article 

“GM vow production-ready hydrogen fuel cell by 2015.” This is the incorrect date. 

The correct date is March 17, 2010. 

USA TODAY, 2010. Chris Woodyard, USA TODAY. March 17, 2010. “GM vows 

production-ready hydrogen fuel cell by 2015” 

http://content.usatoday.com/communities/driveon/post/2010/03/gm-vowsproduction-ready-hydrogen-fuel-cell-by-2015/1. Accessed November 5, 2011 

3. In Chapter 2, “Summary of Proposed Amendments,” page 16, the reference for 

ARB, 2009d erroneously refers to an incomplete website URL to the White Paper: 

Summary of Staff’s Preliminary Assessment of the Need for Revisions to the 

Zero Emission Vehicle Regulation. The correct reference should be as follows: 

ARB, 2009d. California Air Resources Board. “White Paper: Summary of Staff’s 

Preliminary Assessment of the Need for Revisions to the Zero Emission Vehicle 

Regulation,” www.arb.ca.gov/msprog/zevprog/2009zevreview/zevwhitepaper.pdf 

4. The reference (ARB, 2009a) cited in the paragraph on page 16 in chapter 2 was 

corrected for an incorrect date, (see correction 1). 

5. In chapter 5, “Economic Impacts”, page 66 the reference for PluginCars, 2011 

erroneously refers to an article with an incorrect title. The correct title should be 

“Ford Pushes Key Marketing Message for Electric Cars: Lower Maintenance 

Costs.” The correct references should be as follows: 

PluginCars, 2011. PluginCars.com. Zach McDonald. February 9, 2011. “Ford 

Pushes Key Marketing Message for Electric Cars: Lower Maintenance Costs.” 

http://www.plugincars.com/ford-pushes-key-marketing-message-electric-carslower-maintenance-costs-106793.html. Accessed September 26, 2011. 

6. In chapter 5, “Economic Impacts”, page 68, the reference for UC Davis, 2010 

erroneously uses the incorrect acronym for “Reflexive Layers of Influence” which 

should be RLI, not RFI. The correct references should be as follows: 
19 

UC Davis, 2010. University of California, Davis. J.Axsen and K.Kurani. July 2010. 

“Reflexive Layers of Influence (RLI): A model of social influence, vehicle 

purchase behavior, and pro-societal values.” 

7. In chapter 5, “Economic Impacts”, page 69, the reference for Coulomb, 2011 did 

not include a specific reference to information on the website. The correct 

reference should be as follows: 

Coulomb, 2011. Coulomb ChargePoint America. Website. “ChargePoint America 

Program Info” http://chargepointamerica.com/program-info.php. Accessed 

September 20, 2011 

8. The reference (ARB, 2009a) included in the list of references in chapter 10, page 

107, was corrected for an incorrect date, (see correction 1). 

9. The reference (ARB, 2009d) included in the list of references in chapter 10, page 

107, was corrected for a typographical error, (see correction 3). 

10. The reference (Coulomb, 2011) included in the list of references in chapter 10, 

page 109, was corrected to be more specific, (see correction 7). 

11. The reference (Honda, 2011) included in the list of references in chapter 10, 

page 110, was corrected for a typographical error, (see correction 2). 

12. The reference (PluginCars, 2011) included in the list of references in chapter 10, 

page 111, was corrected for a typographical error, (see correction 5). 

13. The reference (UC Davis, 2010) included in the list of references in chapter 10, 

page 112, was corrected for a typographical error, (see correction 6). 

14. The reference (USA TODAY, 2011) included in the list of references in chapter 

10, page 113, was corrected for an incorrect date, (see correction 2). 

V. SUMMARY OF COMMENTS MADE DURING THE 45-DAY, THE 

BOARD HEARING, AND SUPPLEMENTAL COMMENT PERIOD 

AND AGENCY RESPONSES 
20 

Below is a list of those who submitted comments during the 45-day comment period, at 

the January 26 and 27 Board Hearing, or gave oral testimony at the Board Hearing: 

Commenter Affiliation 

Alegria, Lydia private citizen (Alegria) 

Altman, Daniel private citizen (Altman) 

Amedeo, Felisa Ferrari S.p.A. (Ferrari) 

Anair, Don Union of Concerned Scientists (UCS) 

Arguello, Martha Physicians for Social Responsibility (PSR) 

Avery, William private citizen (Avery) 

Babik, Robert* General Motors (GM) 

Baker-Branstetter, Shannon* Consumers Union (CU) 

Barrera, Andrew Los Angeles Metro Hispanic Chamber of Commerce 

(LAMHCC) 

Barrett, Will American Lung Association of California (ALAC) 

Baumhefner, Max Natural Resources Defense Council (NRDC) 

Beinenfeld, Robert * American Honda Motor Company, Incorporated 

(Honda) 

Boesel, John CalStart (CalStart) 

Cabaniss, John * Global Automakers (Global) 

Campbell, Susan Jaguar Land Rover North America, LLC (JLR) 

Carmichael, Tim* California Natural Gas Vehicle Coalition (CNGVC) 

Carney, Chris Union of Concerned Scientists (UCS) - 159 signees 

Caroll, Sean* Environment California (EC) 

Cassidy, Robert Nissan (Nissan) 

Chew, Yuli private citizen (Chew) 

Clark, Darrell Sierra Club (Sierra) 

Conibear, Robert private citizen (Conibear) 

Cuevas, Yolanda Los Angeles Unified School District Asthma Program 

(LAUSD) 

De Leon, Kevin California Senator De Leon (Senator De Leon) 

Douglas, Steven * Alliance of Automobile Manufacturers (Alliance) 

Druffel, Allis* California Interfaith Power & Light (CAIPL) (Written 

Testimony included 10 signees) 

Eckerle, Tyson* Energy Independence Now (EIN) 

Ehlmann, Jim General Motors (GM) 

Esty, Daniel Connecticut Department of Energy & Environmental 

Protection (CT) 

Friedland, Jay* Plug-In America (PIA) 
21 

Friedman, David* Union of Concerned Scientists (UCS) 

Friedman, David Union of Concerned Scientists (UCS) 

Frost, Jonathan Johnson Matthey Fuel Cells (JMFC) 

Gillis, Jack 

Consumers Union.org, Consumers for Auto Reliability 

and Safety, and Consumer Federation of America 

(Consumers) (Written Testimony included 3 signees) 

Gillis, Jack* Consumer Federation of America (CFA) 

Ginsburg, Andrew* Oregon Department of Environmental Quality (OR) 

Gomez, Cruz private citizen (Gomez) 

Greenberg, Stephen private citizen (Greenberg) 

Greuel, Wendy City of Los Angeles Controller (LA) 

Hamasaki, Lee United States Green Vehicle Council (USGVC) 

Hines, Barbara QueensCare Family Clinics (QFC) 

Hogo, Henry* South Coast Air Quality Management District 

(SCAQMD) 

Holmes-Gen, Bonnie American Lung Association of California (ALAC) 

Illades, Jane private citizen (Illades) 

Jack, James Emission Control Technology Association (ECTA) 

Jackson-Ervin, Cathy Operation Free (OF) 

James, Wendy* California Clean Cars Campaign (CCCC) 

James, Wendy State Advocates (SA) - 22 Signees 

Johnson, Stuart* Volkswagen Group of America, Inc (VW) 

Jonasson, Elizabeth Coalition for Clean Air (CCA) 

Jordan, Thomas* San Joaquin Valley Unified Air Pollution Control District 

(SJVUAPCD) 

Kelsey-Lamb, Anne Regional Asthma Management & Prevention (RAMP) 

Kelsey-Lamb, Anne Community Action to Fight Asthma and Regional 

Asthma Management & Prevention (CAFA) 

Khalili, Azita Bayerische Motoren Werke of North America, LLC 

(BMW) 

Klosterman, Peter private citizen (Klosterman) 

Klugescheid, Andreas Bayerische Motoren Werke of North America, LLC 

(BMW) 

Land, Klaus* Mercedes-Benz (Mercedes) 

Lee, Michael private citizen (Lee) 

Lerner, Eric private citizen (Lerner) 

Lloyd, Alan* International Council on Clean Transportation (ICCT) 

Lord, Michael* Toyota Motor North America, Inc (Toyota) 

Lord, Michael Large Volume Manufacturers, including BMW, 

Chrysler, Ford, GM, Honda, Mercedes, Nissan, and 
22 

Toyota (LVM) 

Love, Michael Toyota Motor North America, Inc (Toyota) 

Lyou, Joe Coalition for Clean Air (CCA) 

Mars, Dan** private citizen (Mars) 

Martens, Joe State of New York Department of Environmental 

Conservation (NY) 

Marz, Loren** private citizen (Marz) 

Mattioli, Giacomo Ferrari of Beverly Hills (FBH) 

McEldowney, Ken Consumer Action (CA) - 28 signees 

Messina Schkolnick, Karen Bay Area Air Quality Management District (BAAQMD) 

Minor, Greg Ferrari of San Francisco (FSF) 

Mitchell, Judy City of Rolling Hills Estates, City Council (RHE) 

Mitchell, Judy California Clean Cars Campaign (CCCC) 

Modlin, Reginald* Chrysler Group LLC (Chrysler) 

Morehouse, Erica Environmental Defense Fund (EDF) 

Morrison, Jonathan California New Car Dealers Association (CNCDA) 

Mui, Simon* Natural Resources Defense Council (NRDC) 

Miyasato, Matt South Coast Air Quality Management District 

(SCAQMD) 

Nocera, Barbara* Mazda North American Operations (Mazda) 

Norton, Kevin 

 

International Brotherhood of Electrical Workers, Local 

11 (Local11) 

Ntuck, Uduak Operation Free (OF) 

O'Brien, Michael Hyundai America (Hyundai) 

O'Connell, Diarmuid* Tesla Motors (Tesla) 

O'Grady, Elaine Vermont Air Pollution Control Division (VT) 

Ong, Michael* American Lung Association of California (ALAC) 

Pantoja, Ernesto Local 1300 (Local1300) 

Patterson, David* Mitsubishi Motors North America and Mitsubishi Motors 

Corporation (Mitsubishi) 

Pennino, Summer Electric Vehicles International (EVI) 

Perry, David private citizen (Perry) 

Prasad, Shankar* Coalition for Clean Air (CCA) 

Provenzano, James Clean Air Now (CAN) 

Rivas, Mario Operation Free (OF) 

Rodriguez-Lynn, Rebekah Office of Senator Fran Pavley (Senator Pavley) 

Ross, Charles private citizen (Ross) 

Rudy, Sara* Ford Motor Company (Ford) 

Rudy, Sara Large Volume Manufacturers, including BMW, 

Chrysler, Ford, GM, Honda, Mercedes, Nissan, and 
23 

Toyota (LVM) 

Salmi, Chris State of New Jersey Department of Environmental 

Protection (NJ) 

Schefter, Kellen Fisker Automotive (Fisker) 

Schneider, Emily* Professional Engineers of California Government 

(PECG) 

Scully, Janet Asthma Coalition of Los Angeles County (ACLAC) 

Shears, John* Center of Energy Efficiency and Renewable 

Technologies (CEERT) 

Shields, Susan private citizen (Shields) 

Sladek, Aaron private citizen (Sladek) 

Sloustcher, Matt CODA Holdings, Inc (CODA) 

Stein, Ronald private citizen (Stein) 

Stewart, Sandra Green Chamber of Commerce (GCC) 

Strada, Michael private citizen (Strada) 

Summers, Robert Maryland Department of the Environment (MD) 

Swaffer, Miriam 

Union of Concerned Scientists (UCS) – (Two letters 

submitted. Letter submitted on 1/25/2012 (9:33): 4220 

signees. Letter Submitted on 1/25/2012 (10:34): 116 

signees 

Tapia, Rudy* Vision Motor Corporation (Vision) 

Tator, Erin private citizen (Tator) 

Tovar, Jessica Long Beach Alliance for Children with Asthma (LBACA) 

Tran, Lloyd Cleantech Institute (CI) 

Tutt, Eileen* California Electric Transportation Coalition (CalETC) 

Vinetz, Robert* Asthma Coalition of Los Angeles County (ACLAC) 

Wallerstein, Barry South Coast Air Quality Management District 

(SCAQMD) 

Woodard, Tracy* Nissan (Nissan) 

Yehl, Katherine Volvo Car Corporation (Volvo) 

The commenters listed above with a single asterisks (*) submitted written comments 

and gave oral testimony at the January 26 and 27 Board Hearing. Summary of 

comments and ARB response for commenters listed above with a double asterisks (**) 

can be found in Attachment A, “Responses to Comments on the Advanced Clean Cars 

Environmental Analysis.” ARB received multiple comments from various commenters 

with the same affiliations. All comments with the same affiliation have been grouped, 

regardless of the commenter. 
24 

The following is a list of form letters received during the 45-day comment period, how 

they are referred to in ARBs response to the comments, the organization responsible for 

the comment letter, and the approximate number of form letters received: 

Form Letter #1 CREDO 1075 

Form Letter #2 Consumer Union Advocacy 4493 

Form Letter #3 American Lung Association in California 664 

Form Letter #4 Coalition for Clean Air 12 

Form Letter #5 Natural Resources Defense Council 1999 

Form Letter #6 no affiliation 479 

 

During the 15-day supplemental comment period, the Board received written 

comments from: 

Commenter Affiliation 

Atkinson, John Virginia Natural Gas (VNG) 

Bienenfeld, Robert American Honda Motor Company, Incorporated 

(Honda) 

Bienenfeld, Robert American Honda Motor Company, Incorporated 

(Honda) 

Krich, Frank Chrysler Group, LLC (Chrysler) 

Mattioli, Giacomo Ferrari of Beverly Hills (FBH) 

Minor, Greg Ferrari of San Francisco (FSF) 

Nordberg, David Oregon Department of Environmental Quality (OR) 

Rudy, Sara Ford Motor Company (Ford) 

Rugge, John Fuji Heavy Industries USA, Inc. (Subaru) 

ARB received a comment outside the supplemental comment period from Mitsubishi 

Motors North America and Mitsubishi Motors Corporation (Mitsubishi), submitted by 

David Patterson. ARB has included responses to this Mitsubishi comment. 

Set forth below is a summary of each objection or recommendation made regarding the 

specific adoption, amendment, or repeal proposed, together with an explanation of how 

the proposed action has been changed to accommodate each objection or 

recommendation, or the reasons for making no change. Only objections or 

recommendations directed at the agency’s proposed action or the procedures followed 

by the agency in proposing or adopting the action are summarized as permitted by CCR, 

title 2, section 11346.9. Repetitive or irrelevant comments have been aggregated and 

summarized as a group. A comment is “irrelevant” if it is not specifically directed at the 

agency’s proposed action or to the procedures followed by the agency in proposing or 

adopting the action. The comments have been grouped by topic whenever applicable. 
25 

When comments have been grouped, a brief summary of the comment is given to relay 

the content of all the comments in the group. All other comments are taken verbatim 

from documents submitted during the 45-day and 15-day comment periods, or from the 

January 26 and 27, 2012 Board Hearing transcript. Acronyms exclusively used by 

commenters have been defined by [brackets] throughout this section. 

COMMENTS AND TESTIMONY PRESENTED PRIOR TO, OR AT THE JANUARY 26 

AND 27, 2012 HEARING 

Part I. Non-Specific Regulatory Comments 

Comments grouped in this section refer generally to the proposal presented in the ISOR, 

but to not specifically speak to the proposed for ZEV regulation. Other comments in this 

section refer to parts of the regulation which were not modified in this rulemaking. 

A. Support 

1. Comment: ARB received several comments expressing strong support for the 

proposed vehicle and fuel policies, and specifically for the Advanced Clean Cars 

standards, and for the Board to adopt the Advanced Clean Cars standards. 

(ACLAC, ALAC, BAAQMD, CAFA, CAN, CCA, CCCC, CEERT, CT, CU, CalETC, 

CalStart, EC, ECTA, EDF, EIN, GCC, ICCT, Klosterman, LA, Lerner, Local11, 

Local1300, NY, OF, PECG, RAMP, RHE, SCAQMD, SJVUAPCD, Senator De 

Leon, Senator Pavley, Sierra, Strada, UCS, VT) 

We support your regulations and greenhouse gas regulations. (Alliance, Oral 

Comment, Douglas) 

Agency Response: ARB appreciates support for the Advanced Clean Cars 

regulation. The Board adopted the final Advanced Clean Cars regulations at its 

March 22, 2012 Hearing. 

2. Comment: ARB received several comments expressing strong support for the 

California Clean Cars Campaign. (CIPL, LAUSD, LBACA, QFC)

Agency Response: The Clean Cars Campaign is an informal alliance of state, 

local, and national health and environmental organizations working together to 

promote cleaner motor vehicles. The Clean Cars Campaign promoted ARB’s 
26 

Advanced Clean Car standards throughout the rulemaking process. See 

response to Comment 1. 

3. Comment: ARB received several comments expressing strong support for the 

ZEV regulation, the efforts to strengthen the ZEV regulation, and for the 

proposed amendments to the ZEV regulation. (Alegria, EIN, ICCT, JMFC, 

Nissan, Sierra, UCS) 

Agency Response: ARB appreciates support for the modifications to the ZEV 

regulation. The Board adopted the final Advanced Clean Cars standards, which 

included the ZEV regulation at its March 22, 2012 hearing. 

4. Comment: We support these efforts to reduce global warming emissions, 

improve the fuel efficiency of our vehicles, reduce our dependence on oil, and 

protect public health by ensuring drivers have more choices for clean cars and 

light trucks through the use of strong, cost-effective standards. (UCS) 

Agency Response: ARB appreciates support for the efforts and goals of the 

Advanced Clean Cars standards. The Board adopted the final Advanced Clean 

Cars regulations at its March 22, 2012 hearing. 

5. Comment: I’d like to first acknowledge and thank you for the trailblazing work 

your agency has done in developing the LEV program and the ZEV requirements. 

We are indebted to you for establishing these programs, and we consider 

ourselves partners in your agency’s longstanding commitment to the 

development of vehicles that do not harm human health and the environment. 

(OR) 

Agency Response: ARB appreciates support for its efforts in developing the LEV 

and ZEV requirements. Section 177 states, like the commenter, have helped 

strengthened ARB’s position to require stringent standards for light-duty vehicles. 

6. Comment: General support for Advanced Clean Car goals. (CNGVC) 

Agency Response: ARB appreciates support for its Advanced Clean Car goals. 

The final Advanced Clean Cars standards as approved by the Board at its March 

22, 2012 hearing, set California on a path towards achieving the goals of costeffectively reducing criteria pollutant and GHG emissions, pushing ZEV 

commercialization by 2025, and ensuring sufficient infrastructure is available to 

support the most advanced vehicles in the regulations. 
27 

7. Comment: I am writing to strongly support the goals of the ZEV program to 

achieve the health base air quality standards and the GHG emission goals. 

(Chew) 

We strongly support the goals of the ZEV program and applaud programs that 

provide needed economic incentives to help achieve California’s health based air 

quality standards and aggressive GHG emission goals. (EVI) 

Agency Response: ARB appreciates support for its ZEV program goals. The 

final modifications to the ZEV regulation, as approved by the Board at its March 

22, 2012 hearing, set California on a path towards achieving the goal of pushing 

ZEV commercialization by 2025. 

8. Comment: Toyota also supports the roles of the ZEV program and the ARBs 

continuing efforts to accelerate the commercialization of advanced technology 

vehicles. (Toyota) 

Agency Response: ARB appreciates support for the role of the ZEV regulation. 

The final modifications to the ZEV regulation, as approved by the Board at its 

March 22, 2012 hearing, strengthen the role of the ZEV regulation, and continue 

to accelerate the commercialization of advanced technology vehicles. 

9. Comment: Support for including TZEVs and BEVs into ZEV regulation. These 

vehicles use technologies and infrastructure that will advance the 

commercialization of ZEVs. (Mercedes) 

Agency Response: ARB appreciates support for the inclusion of TZEVs and 

BEVs into the ZEV regulation. The final modifications to the ZEV regulation, as 

approved by the Board at its March 22, 2012 hearing, help push advanced 

vehicles toward commercialization by 2025. 

B. General Opposition 

10. Comment: Don’t be draconian with the regs. We can still have our autos and not 

have to rely only on electric cars as they pollute too just in a different way. 

Please remember this point as you’re making your vote look like a shell game. 

(Perry) 

Agency Response: ARB recognizes there are upstream emissions associated 

with ZEVs and TZEVs. However, both BEVs and FCVs are still less polluting on 
28 

a well to wheel basis than conventional vehicles (see ZEV ISOR, page 75-77) 

and they can be powered by fuels created from 100 percent renewable energy. 

Additionally, the ZEV program has become even more important for California in 

meeting goals under the Global Warming Solutions Act of 2006 (Assembly Bill 

(AB) 32) and meeting California’s 2050 GHG emission reduction goals. No 

gasoline technology can contribute equivalent criteria or GHG emission 

reductions necessary for meeting long term air quality goals. 

11. Comment: I am writing to oppose strengthening the “advance clean cars” 

proposal to increase the numbers of ZEVs on California roads. False science is 

being used by the Lung Association and others to fool the populace. Electric 

cars are essentially coal-powered and this measure increases, rather than 

reduces, net air pollution. Please reject strengthening the “advance clean cars’ 

proposal. (Ross) 

Agency Response: The Board believes the ZEV program is necessary to 

meeting California’s environmental goals. Both BEVs and FCVs are still less 

polluting on a well to wheel basis than conventional vehicles (see ZEV ISOR, 

page 75-77). Additionally, California’s electricity is generated mainly from natural 

gas, not coal, with aggressive targets set for increasing renewable energy 

produced. Zero emission technologies can greatly reduce or even eliminate 

some of the persistent environmental problems from motor vehicle emissions. 

See response to Comment 10. 

C. General Board Requests 

12. Comment: ARB received several comments urging the Board to adopt the 

strongest possible Advanced Clean Cars standards, including the strongest 

possible motor vehicle emission standards. (ACLAC, ALAC, Avery, CA, CFA, 

Consumers, EC, Form Letter #2, Form Letter #4, LAUSD, LBACA, Lerner, PSR, 

QFC, Sladek) 

Agency Response: In adopting new passenger car standards, the Board must 

consider the cost effectiveness, consumer acceptance, and environmental 

impacts of the proposed amendments. The Board adopted the Advanced Clean 

Car standards which achieve 75 percent reduction in criteria pollutant emissions, 

30 percent reduction in GHG emissions, and requiring over 1.4 million ZEVs and 

PHEVs to be delivered for sale in California by 2025, while taking into 

consideration vehicle cost and consumer payback periods. The Board will review 

the Advanced Clean Car standards in 2017 to assess the overall stringency for 

the 2022 through 2025 model year timeframe, and will consider further 
29 

modifications to the program as appropriate to properly align the Advanced Clean 

Car standards with California’s GHG and air quality long term goals. 

13. Comment: I urge you to adopt the proposed amendments, with the strongest 

possible provisions and timing for both the ZEV and LEV III advanced clean car 

regulations. (Avery) 

Agency Response: The phase-in schedule for both the ZEV and LEV regulations 

is aggressive and will require innovative GHG reduction technologies between 

2017 and 2025 model years. See response to Comment 12. 

14. Comment: ARB received several comments calling for the Board to strengthen 

the ZEV regulation, in some cases beyond staff’s proposal or for the Board to 

adopt a strong ZEV regulation. (ALAC, LAUSD, Lerner, NRDC, QFC, 

SJVUAPCD) 

We need the deployment and acceleration of these clean technologies. We need 

them at an accelerated pace, even faster than what's proposed in the ZEV 

regulation. (SCAQMD) 

Agency Response: The Board considered four alternatives, including the staff 

proposal, during this rulemaking. Three alternatives (not including the staff 

proposal) were rejected for various reasons, including compliance costs, 

likelihood of ZEV commercialization, and reliance upon non-zero emission 

technologies. The Board adopted a simplified, improved, and aggressive ZEV 

regulation, beginning in model year 2018. Overall, the amendments help to 

simplify and strengthen the ZEV regulation, pushing zero and near zero emission 

technologies towards commercial levels by model year 2025. 

15. Comment: ARB received several comments urging the Board to adopt the 

strongest possible and highest possible ZEV standards and strongest possible 

requirement for advanced technology. (Avery, Form Letter #1, Form Letter #3, 

Form Letter #5, Greenberg, UCS) 

Agency Response: The Board adopted staff’s proposed modifications to the ZEV 

regulation, with the direction to modify the amendments in specific ways to stay 

on track with meeting the overall goal of ZEV commercialization. ARB 

considered four alternatives when developing the ISOR proposal. Three 

alternatives (not including the staff proposal) were rejected for various reasons, 
30 

including compliance costs, likelihood of ZEV commercialization, and reliance 

upon non-zero emission technologies. 

16. Comment: Vehicle emission (sic) is a sizable contributor to global warming. 

Signs of global warming are everywhere. Look no farther than the current 

drought in California. The fear is that this is not a one year aberration, but a long 

term trend. The cost of doing nothing is enormous. What happens if Santa 

Barbara burns every year due to the lack of rain? This list goes on and on. Do 

what we can now to stem global warming. (Lee) 

Agency Response: Overall, the Advanced Clean Cars program as adopted by 

the Board will help reduce GHG emissions from the light-duty vehicle sector 30 

percent by 2050, preventing hundreds of millions of metric tons of GHG emission 

from entering the atmosphere. 

17. Comment: We urge you to also consider the global impact of these regulations. 

The ZEV program has successfully driven down cost of advanced vehicle 

technology since its inception, which, in turn, has helped to and will increasingly 

facilitate the deployment of clean vehicles far beyond our state and national 

borders. (CODA) 

Agency Response: The Administrative Procedure Act only requires ARB to 

consider "reasonable" alternatives (Gov. Code section 11346.2(b)(4)(A)) to the 

regulation as proposed. Considering global impacts would not be a reasonable 

alternative as California has limited ability to control behavior beyond its borders. 

18. Comment: ARB needs to closely monitor the sales of ZEVs and make necessary 

revisions to ensure that the full emission reduction benefits are achieved. 

(SCAQMD) 

Agency Response: Comment noted. ARB will constantly review the status of the 

ZEV regulation and the amount of advanced vehicles resulting from the 

regulation. 

19. Comment: Closely monitor the amount of credits generated and their use in 

producing vehicles that do not necessarily meet applicable criteria pollutant or 

GHG standards. (SCAQMD) 

Agency Response: Any vehicle receiving credit through the ZEV regulation must 

be certified to California’s most stringent tailpipe standards for light duty vehicles. 
31 

This means any near-ZEV must be certified to SULEV tailpipe standards and 

zero evaporative emissions. Credits are not awarded to vehicles that do not 

meet applicable criteria pollutant or GHG standards. 

20. Comment: I urge you to adopt the most health protective program possible. 

(CCA) 

Agency Response: In Resolution 12-11, the Board found that the Advanced 

Clean Cars program will not cause California motor vehicle emission standards, 

in the aggregate, to be less protective of public health and welfare than 

applicable federal standards. 

21. Comment: As you meet later this month to consider the next phase of your 

landmark ZEV Program, we urge you to continue to support the states that have 

stood beside you in this effort over the years. The Sec. 177 states and states 

that may choose to join the program in the future should be seen as important 

partners in your vital clean air effort. We urge you to work closely with these 

states to ensure that they receive significant deliveries of ZEVs in the near term 

and a guaranteed increase in the number of vehicles to be delivered in the next 

decade. (SA) 

Agency Response: Comment noted. ARB worked closely with the Section 177 

states throughout the rulemaking process. The optional Section 177 state 

compliance path is a result of many months of negotiations between Section 177 

states, manufacturers and ARB. Numerous Section 177 states submitted 

comments in favor of the Advanced Clean Car standards, modifications to the 

ZEV regulation, and the optional Section 177 state compliance path. 

D. Regulatory and Compliance Flexibility 

22. Comment: Given the technology forcing nature of the ZEV regulations, as well 

as the task for the automotive industry to develop, produce, and sell vehicles that 

future customers will accept, BMW recommends the implementation of early 

additional phase-in flexibility to address the ambitious ramp-up rate of the 

requirements and the inclusion of the well-timed reviews before 2018 to validate 

industry-wide technology development, customer demand for advanced clean 

cars, and the development of an adequate refueling infrastructure necessary for 

vehicles in the ZEV program. (BMW) 

Agency Response: The Board adopted various flexibilities for BMW and other 

transitioning IVMs before 2018 model year to help ease the burden of 2018 
32 

model year LVM requirements. These flexibilities include a decreased 

requirement between 2015 and 2017 model years and a less burdensome 

discount factor on PZEV credits used for compliance towards the TZEV category 

starting in 2018 model year. Additionally, IVMs may participate in the optional 

Section 177 state compliance path, and reduce their overall requirement in the 

Section 177 states in 2018 through 2020 model years. 

23. Comment: Increase compliance flexibility by providing credit for the sale of 

hybrid vehicles. (CNCDA) 

Agency Response: Manufacturers may produce conventional hybrids, meeting 

SULEV and zero evaporative emission standards, through 2017 model year for 

ZEV credit, which can be used towards meeting a portion of their overall ZEV 

requirement. Starting in 2018 model year, the Board approved removing those 

vehicles from the ZEV regulation, as conventional hybrids are reaching 

commercial levels and no longer need to be mandated. 

24. Comment: I would suggest that all mitigation credits should not reduce the 

current mandate by an aggregate to a maximum of 50 percent, both for the ZEV 

and TZEV portions. (Chew) 

Agency Response: Comment noted. The regulation is currently silent on how 

caps for various credits should be applied to a manufacturer’s requirement, and 

how the caps would limit spending of credits toward certain portions of a 

manufacturer’s requirement. When ARB harmonizes its regulations with EPA, 

staff will propose a new method for applying caps to a manufacturer’s 

requirement in any given year, to ensure manufacturers must still produce some 

advanced vehicles in compliance with their yearly requirement. 

E. Heavy Duty ZEVs 

25. Comment: We urge the ARB to allow Vision Motor Corp’s zero emission heavyduty class eight truck to become eligible to earn credits under the ZEV credit 

program on the following merits: letters of interest from OEMs, potential air 

quality benefits to California, help spur technology and market development of 

zero emission heavy-duty vehicles, and attaining ZEV credit status would have a 

huge economic impact to Vision and to the zero emission trucking effort, both 

locally and state-wide. The ability to earn ZEV Credits will serve as a financial 

catalyst that will help speed the early market introduction of zero emission heavy 

duty trucks in California. (Vision) 
33 

Refining the ZEV program to include ZEVs over 14,000 pounds would achieve 

the greatest tons per dollar reductions associated with the program and 

accelerate the program’s health benefits. Allowing the ZEV program to include 

larger vehicles will leverage private dollars to help modernize the fleet and 

eliminate toxic diesel emissions, cleaning the air and alleviating toxic exposures. 

To support the expanded development of California ZEV technologies and 

associated California jobs, we ask that California-manufactured, zero emission, 

heavy-duty vehicles be allotted credit under the ZEV Program to help sustain 

new job creation within our state and provide market-based incentives to 

accelerate the replacement of large, dirty diesel vehicles. We strongly believe 

that allowing heavy-duty vehicles the ability to earn ZEV Credits will serve as a 

financial catalyst that will help speed the early market introduction of zero 

emission heavy duty trucks in California. (EVI) 

Agency Response: ARB does not see the benefit of allowing light and mediumduty manufacturers to purchase credits earned from heavy-duty ZEVs. Light and 

medium-duty manufacturers have a ZEV requirement because they contribute a 

substantial amount of criteria and GHG emissions to California through sales of 

passenger vehicles. Allowing manufacturers to purchase credits from a different 

on-road transportation sector would not further the light duty vehicle subsector to 

meet its own long-term criteria pollutant and GHG emission reduction goals. 

ARB does however believe it is appropriate to explore ZEV regulations for heavyduty vehicles. 

26. Comment: Replacing one diesel-powered big rig with a Vision Class 8 truck has 

the air quality benefit of removing the tailpipe emissions created by 64 passenger 

vehicles. Credits that would be earned by the sale of our heavy duty truck should 

be of larger value than those of a passenger vehicle manufacturer based on the 

great emission reductions. (Vision) 

Allowing auto manufacturers to purchase ZEV credits from manufacturers of 

larger ZEVs and allowing these credits to fulfill light-duty manufacturers’ ZEV 

requirements will provide a substantial net air quality benefit. (EVI) 

Agency Response: ARB agrees there are significant emissions benefits 

associated with heavy-duty ZEVs. However, ARB does not see the benefit of 

allowing light and medium-duty manufacturers to purchase credits earned from 

heavy-duty ZEVs. See response to Comment 25. 

F. Alternative Regulatory Approaches 
34 

27. Comment: I am concerned that the Board has lost some focus that being too tied 

to the detail clouds the objective. The objective being to reduce GHG’s in the 

quickest possible time and to do so in the most efficient manner energy and costwise. Use energy efficiency as the base criteria with rewards for greater 

efficiencies and penalties for less. Set up an independent non-profit fund to 

guarantee loans to order large quantities of vehicles that use little fuel or no fuel, 

and guarantee assembly line production of vehicles that meet the defined 

standard. Spend the fund on rebates, added, replacing and/or superseding the 

present rebates. Pay for the fund by usage fee on each gallon of gasoline 

thereby making the users pay for fuel efficient vehicles and reward them and the 

country by low to nil future costs of fuel with the new vehicle at no extra capital 

costs to the buyer. No more studies, experimental funding, etc, just buy them. 

Independently set up general standard based on efficiency of the drive system. 

(Conibear) 

Agency Response: ARB does not have the authority to set vehicle fuel economy 

standards. ARB also does not have the authority to impose a gas fee or tax. 

Such authority would require California Legislative action. The ZEV regulation 

has resulted in over 1 million PZEVs, over 300,000 conventional hybrids, and 

thousands of ZEVs being placed on California’s roads. With a goal of 

commercializing ZEVs, using zero emission miles as a metric for crediting 

vehicles for compliance provides an appropriate nexus between technology and 

vehicles for achieving our goals. Once commercialized, the new vehicle 

standards under the LEV program can continue to drive down the vehicle fleet 

emissions of criteria and GHG emissions utilizing these technologies. For this 

reason, ARB believes zero emission miles are sufficiently appropriate to credit a 

vehicle’s environmental benefit. 

28. Comment: We have concerns regarding the use of credits in such a manner that 

may lead to greater sales of vehicles that do not meet the applicable standards. 

We recommend that the Board consider establishing optional emission standards 

for zero and near zero and alternative fueled vehicles that could be benchmarked 

for incentive programs in California. We believe such an approach can lead to 

earlier and greater penetration of ZEVs and alternative fueled vehicles in 

California and provides an incentive to have greater number of vehicles on 

California roads. (SCAQMD) 

Agency Response: ARB does not see the need to establish optional zero and 

near-zero certification standards for any purpose, including for incentives. The 

current certification standards for zero and near-zero emission vehicles ensure 
35 

vehicles meet the most health protective criteria pollutant standards. Currently, 

only PHEVs qualifying as enhanced AT PZEVs, meaning the vehicle is certified 

to SULEV standards and zero evaporative emissions, with a 15-year/150,000 

mile emission warranty, and 10 year/150,000 mile warranty on the vehicle’s 

energy storage system, and certified ZEVs qualify to receive monetary incentives 

through ARBs Clean Vehicle Rebate Project. Additionally, it is not clear how 

establishing optional standards will help greater penetration of ZEVs and 

alternative fueled vehicles. 

G. ZEV Review 

29. Comment: Require a full review of the ZEV regulations prior to 2018 model year 

to evaluate the market, state of technology, and infrastructure development with 

the goals of ensuring that the regulations are in alignment with projected market 

demand and replacing the mandate with performance-based standards. (Ford) 

The LVMs believe a review early enough to examine the 2018 and subsequent 

model year requirements is needed. Therefore, in addition to the formal midterm review, the LVMs request that the Board direct staff, in the form of a 

resolution, to continually monitor the technological progress and market 

acceptance of ZEV technologies by conducting more frequent informal ZEV 

reviews. (LVM) 

Total ZEV percent requirement 2018-2025 is very ambitious and strongly 

dependent on various external frame conditions. We recommend implementing 

an additional review before 2018 to examine industry-wide compliance status 

and the development of infrastructure necessary for vehicles in the ZEV program. 

(BMW) 

The revision to the ZEV regulations contains a very aggressive ramp up of the 

ZEV requirement in 2018 model year. Toyota would like to request that the 

Board continually monitor the pace of technology development and acceptance 

in the market to insure the assumptions on which these regulations are based 

are correct. This is in addition to working with EPA and NHTSA on the mid-term 

review contained in the GHG one national program agreement. (Toyota) 

Agency Response: Comments noted. ARB is committed to constantly reviewing 

the ZEV program, and assessing the need to update the regulation as necessary. 

Additionally, ARB will include a ZEV review as part of the GHG regulation midterm review in 2017. 
36 

30. Comment: Chrysler supports a more frequent review of the ZEV Program. 

Manufacturers have announced plans for many electric vehicles which will launch 

over the next several years. This first major move towards plug-in vehicle 

commercialization will yield many lessons in both vehicle technology and market 

acceptance of these vehicles. Chrysler recommends that ARB undertake a 

biennial review process which examines critical technology, cost, and market 

considerations and to recommend changes to the ZEV Program to the Board as 

needed based on these reviews. (Chrysler) 

Agency Response: Comment noted. ZEV program staff is constantly reviewing 

the status of the ZEV regulation, the development of technology, and are 

participating in numerous complementary policy efforts to help foster ZEV 

technology. Staff will recommend modifications to the Board as appropriate and 

necessary. 

31. Comment: ARB staff has previously stated its intent that for 2026 and beyond 

the ZEV program will be incorporated into the LEV program GHG fleet average, 

with no technology-specific requirements. ICCT notes that the proposed 

regulation order does not include any such sunset, but rather continues the 2025 

requirement indefinitely into subsequent model years. Although there are 

indications that longer term sales volumes and technology development as well 

as GHG and criteria pollutant standards could result in a self-sustaining market, 

we agree with CARB staff that picking a sunset date is premature at this time. 

We suggest re-evaluating the status of these factors and progress towards 

achieving a self-sustaining market over time at a future date. (ICCT) 

Agency Response: Comment noted. See response to Comment 29 and 30. 

H. ISOR Analysis 

32. I want to say I've been incredibly impressed by the thoroughness of research, 

analysis and the public process involved with these Advanced Clean Car 

proposals. This is how regulations should be done. (UCS) 

Agency Response: ARB appreciates support for the methodology and strategy 

used to develop the Advanced Clean Car standards. 

33. Comment: CalETC supports a data-driven approach to regulation and ARB 

staff's commitment to studying PEV [plug-electric vehicle] data with the intention 

of improving the current methodology for ZEV credits. The next few years will be 

critical to better understanding PEV [plug-electric vehicle] driving patterns and 
37 

behavior. Some of the data gathered to date indicates that annual ZEV miles 

driven by a plug-in hybrid vehicle do not differ significantly from annual ZEV miles 

driven by a pure battery-electric vehicle. Further, there is a significant body of 

data that shows that pure battery-electric vehicles with a 100-mile range can 

meet 75-90 percent of driving needs for vehicle owners and that younger drivers 

are more willing to consider car-share programs. The collection of this kind of 

data could result in improvements in the ZEV credit methodology. (CalETC) 

Agency Response: ARB appreciates the support for staff’s data-driven approach 

to the regulation and the future commitment to studying PHEV and BEV data. 

34. Comment: Although we largely agree with the methodology that CARB staff 

utilized, we are concerned that the incremental price associated with plug-in 

electric vehicles out to 2025 is not reflective of a number of price mitigating 

technology factors and policies at the state and national level. Although the ARB 

staff has indicated that there are factors that mitigate price, none of these factors 

were included in the ARB assessment. The result is an incremental price that is 

significantly higher than CalETC believes is accurate. Some benefits of PEVs 

that have been assessed include: 

A pure ZEV fleet of vehicles would save about $1.6 Billion per year in 

societal damages, relative to a fleet of vehicles meeting current standards. 

This equates to about $3K-$4K per vehicle over the lifetime of the vehicle. 

The federal government does not count upstream emissions when 

calculating the corporate average fuel economy (CAFE) rating for PEVs. 

The incremental value of the PEV CAFE benefit is approximately $4,200 

per battery-electric vehicle. 

Intensive analysis of the retail market for vehicles allowed access to highoccupancy vehicle lanes, even when there is only one passenger, 

indicates that such vehicles command a premium of $4K. These studies 

also indicate an incentive effect of 20 percent higher aggregate demand 

due to the HOV access. 

 

Reduced vehicle maintenance costs for pure battery-electric vehicles are 

approximately $1,200 per vehicle over its lifetime. 

The Low Carbon Fuel Standard credit value for electricity used in PEVs 

must be passed on to PEV owners as a result of CARB’s adopted 
38 

amendments in December, 2011. The value of this credit ranges from 

$75-$300 per vehicle per year, $750-$3,000 over the life of a PEV. 

CalETC recommends the CARB staff include the value of these and other 

benefits associated with PEVs when assessing the incremental price associated 

with PEVs. (CalETC) 

Agency Response: ARB agrees that ZEV technology may offer net benefits that 

could be far greater than those presented in the ZEV and LEV III ISORs. 

However, staff notes that adoption of all the “price-mitigating technology factors” 

as suggested could amount to an unconventional evaluation of the benefits. The 

ARB does quantify the emission-reduction benefits of reactive organic gases 

(ROG), oxides of nitrogen (NOx), and particle matter (PM) 2.5 (see LEV III ISOR, 

p. 177-178), but simply does not monetize those into avoided societal damage. 

Staff does, however, quantify the monetized GHG benefits under varied 

assumptions about the social cost of carbon (see LEV III ISOR, p. 203-207). 

However, due to the reduction of fleet average criteria and GHG pollutant 

standards (i.e., simultaneously including ZEV and non-ZEV vehicles) through 

2025 model year, it is not clear how to allocate such benefits to any particular 

types of vehicle technologies. In addition, although these types of impacts exist 

and can be monetized, these external benefits do not directly fit within the 

accounting of “cost of compliance” (experienced by the regulated auto makers) or 

the direct “consumer impacts” (experienced by the vehicle user) and therefore 

were not expressed in such per-vehicle terms. 

It is even less clear how the other benefits should be included in ARBs regulatory 

assessment of ZEVs. The suggested “$4,200” federal regulatory upstream 

incentive impact is not necessarily going to translate into such a cost decrease in 

any given zero-emission technology vehicle (and, to the extent that such an 

incentive exists, it would be inherently quantified in U.S. EPA’s OMEGA modeling 

of federal fleet-wide compliance). Although ARB acknowledges that ZEV owners 

may continue to experience high-occupancy vehicle (HOV) lane access benefit 

for some time, there is no assurance that HOV access would be continued 

through 2025 at adequate volume to support vehicles resulting from the ZEV 

regulation, so this benefit was conservatively excluded. Maintenance benefits 

were also conservatively excluded, in the absence of definitive supporting data to 

compare long-term conventional and battery-electric maintenance costs. Finally, 

the suggested low carbon fuel standard (LCFS) benefits are not included, as 

these would amount to a monetary transfer within the California economy (in this 

case, from regulated fuel providers). 
39 

35. Comment: Changing to at least some more realistic assumptions and analyzing 

the most likely scenario would indicate consumer costs that are a few hundred to 

several thousand dollars lower per car and benefits that are thousands of dollars 

higher per vehicle. Incorporating just some of these changes would raise the net 

lifetime savings for electric cars in 2025 to $5,000 to $10,000 compared to 

today’s typical car. Specifically, we recommend the adopting of an electricity 

price significantly less than 15 cents per kWh for electricity to account for future 

accessibility of time of use rates and off-peak battery charging. We estimate that 

switching to 10 cents per kWh would increase lifetime savings for a battery 

electric car by as much as $2,000. (UCS) 

Agency Response: ARB agrees that changing the projected electricity rate from 

$0.15/kWh to $0.10 would generally increase the BEV and PHEV consumer 

benefit by roughly $1000 to $2000 per vehicle. However, as discussed in 

Appendix C of the ZEV ISOR, current and projected electricity rates vary widely. 

There are a number of prevailing uncertainties including: when electric vehicle 

consumers will charge, future time-of-use and possibly special electricity rates 

and metering for electric vehicles set by utilities, the frequency of public fast 

charging at a premium price, increased local distribution costs from greater 

electricity demand, and changing future electricity costs with implementation of 

California’s Renewable Portfolio Standard. Additionally, state and/or local 

governments may potentially need to impose future road use taxes for electric 

vehicles and other alternative fuel vehicles to address possible fuel tax revenue 

shortfalls that would effectively increase operating costs of electric vehicles. Due 

to these uncertainties and currently available data, assuming $0.15/kWh as the 

basis for future electric vehicle charging rates is reasonable at this time. Staff will 

incorporate any new data, as it becomes available, regarding the actual 

electricity rates that electric vehicle users are experiencing in future analyses. 

36. Comment: A lower hydrogen price should be adopted in staff’s economic 

analysis. (UCS) 

Agency Response: Staff has reevaluated the economic impacts using the more 

conservative retail hydrogen fuel price assumption presented in the CFO ISOR, 

i.e. a constant $8/kg price, and used throughout the Advanced Clean Car 

economic analysis. The change in hydrogen fuel price assumption means that 

consumers would be expected to pay less per kilogram of hydrogen fuel in the 

near-term, but more per kilogram in the long-term when compared to the 

previous price assumption. However, due to the relatively low levels of hydrogen 
40 

consumption assumed in the timeframe of the analysis, this change has a 

negligible impact on statewide fuel expenditures, expected fuel savings, or 

overall economic impacts from the regulation, in many cases producing results 

within the rounding error. Staff’s overall conclusions that the Advanced Clean 

Cars program will produce small, positive economic impacts remain unchanged. 

37. Comment: Adoption of a higher gasoline price of $4.02 per gallon by 2025. 

Californians are regularly experiencing $4 per gallon gasoline today. We 

estimate that switching to $4.50 per gallon would increase lifetime savings for a 

battery or fuel cell electric car by more than $2,000. (UCS) 

Agency Response: ARB understands and agrees that increases in the assumed 

gasoline fuel prices would result in proportional increases in fuel savings from 

each of the vehicle technologies, as indicated by the comment. Accordingly, 

decreases in the fuel price (e.g., to average 2008-2010 gasoline prices) would 

proportionally decrease each vehicle technology’s projected consumer benefit. 

In light of the uncertainty of future gasoline fuel prices, staff linked its regulatory 

assessment of consumer impacts to the average of the California Energy 

Commission’s (CEC) high and low projections for fuel prices in order to utilize the 

State’s data source that ARB staff deems to be the most authoritative and most 

consistent with other state-wide energy and transportation planning. However, 

acknowledging that higher gasoline prices would affect fuel savings calculations, 

Section IX.E of the LEV III ISOR presented consumer and economy-wide effects 

from the entire Advanced Clean Cars program (including ZEV) assuming fuel 

prices 30 percent higher than the CEC average, or in the $5-6 per gallon range.

38. Comment: An ICM [indirect cost multiplier] of 1.33 for ZEV technologies, which 

staff highlighted as the most likely case, is not used in the analysis. ARB staff 

estimates that using an ICM [indirect cost multiplier] of 1.33 would bring down 

battery and PHEV cost by $1,000 to $3,000 per vehicle and fuel cell electric car 

costs by $200 to $1,500 per vehicle. Based on ARB data and UCS calculations, 

using the correct ICM [indirect cost multiplier] would cut the cost of the ZEV 

program by nearly $2 billion, bringing it to $3 billion. At a minimum, the ICM 

[indirect cost multiplier] for battery electric and certain types of plug-in hybrid 

electric technologies should be reduced to the same level as that for fuel cell 

electric vehicles as they are of similar complexity. (UCS) 

Agency Response: ARB acknowledges the considerable uncertainty regarding 

this issue of determining the appropriate indirect cost multiplier (ICM) for 

advanced technologies like BEV and PHEV in the 2015-2025 model year time 
41 

period. As a result, staff analyzed relatively high ICM values that were consistent 

with the federally adopted ICMs by technology, as well as analyzing the lower 

1.33 ICM case. ARB agrees that the approximate cost reductions in the ZEV 

program that would result from adopting the constant 1.33 ICM factor are 

approximately as indicated by the commenter. However, ARB ultimately adopted 

the higher ICMs to build a conservative data basis into the analysis to 

acknowledge the inherent uncertainty in these emerging technologies and how 

their indirect costs will compare with conventional technologies. In addition, the 

higher ICMs were maintained for consistency with the cost assumptions used by 

the federal regulatory agencies. ARB intends to continue to study this issue as 

further data becomes available, and it is likely that an improved database will be 

available for the 2017 mid-term review. 

39. Comment: While the proposed federal rules are not final and could change, 

ICCT recommends that CARB staff eventually provide an assessment of how the 

staff estimates of the net cost and emission impact would be affected by 

compliance under the proposed federal rules once they are finalized. (ICCT) 

Inclusion of an analysis of the costs associated with the ZEV program in the most 

likely scenario where automakers choose to comply with federal GHG standards 

in place of LEV III-GHG. We estimate that the incentives provided to electric 

cars in the federal GHG standards are about $3,000 to $6,000 per battery or fuel 

cell electric vehicle, depending on the year and the actual vehicle upstream 

emissions from 2018 through 2021, with significant incentives still available in 

2022 through 2025 depending on how many electric cars automakers produce. 

Accounting for these incentives would further lower the cost of the ZEV program 

by about $1 billion, bringing it to $2 billion. ARB has not looked at the case 

where automakers choose to use federal GHG compliance in place of LEV IIIGHG. Unless key provisions in the federal GHG standards are altered, 

automakers will receive significant incentives for selling electric cars through a 

federal provision that excludes upstream emissions from producing electricity 

and hydrogen and that can up to double the credit electric cars receive towards 

meeting federal GHG standards. Because these incentives are, appropriately, 

not included in the California LEV III program, they have not been accounted for 

in ARB staff estimates of the costs of the ZEV program. (UCS) 

Agency Response: ARB agrees that the federal provisions for upstream 

accounting and multipliers for electric-drive vehicles provide incentives that are 

included in the California LEVIII-GHG proposal. Without fore knowledge about 

the final federally proposed electric vehicle incentive provisions, staff could not 
42 

definitively analyze such a scenario. ARB acknowledges that the regulatory 

incentive can be loosely translated into a relative financial incentive based on the 

reduced deployment of non-electric vehicle technology. However, ARB finds this 

type of cost accounting (i.e., essentially assuming a cost credit for ZEVs) to be 

uncertain and unconventional in assessing such forgone technology costs in the 

California rulemaking based on presumed federal incentive provisions. The 

federal rulemaking analysis (e.g., via United States Environmental Protection 

Agency’s, or U.S. EPA’s, OMEGA modeling of automaker compliance) does 

explicitly analyze these provisions for electric vehicles – and therefore its overall 

projected compliance costs per vehicle do factor these incentives. Staff’s 

analysis reflects the regulated automakers’ compliance with the California 

regulation. To the extent that automakers choose to comply with final federal 

GHG regulations in lieu of California’s, the differing compliance costs would be 

reflected and analyzed in the U.S. EPA final rulemaking assessment, which is 

expected in July of 2012. 

40. Comment: The staff is perhaps overly optimistic about the opportunity for a 

dramatic cost reduction in batteries over the course of this decade and into the 

next. (Toyota) 

Agency Response: Staff’s cost projections for automotive battery packs are 

based on the best available science and are well in line with many industry 

estimates. The cost projections for batteries – at about $200-250/kWh for full 

electric, $300-400/kWh for plug-in hybrid and $550-700/kWh for hybrid batteries 

in the 2025 timeframe – are based on expertise of Argonne National Laboratory’s 

(Argonne) state-of-the-art battery modeling efforts and have gone through an 

extensive peer-review by battery and automotive industry experts. The Argonne 

battery assessment is the most rigorous, transparent, and relevant study of the 

pertinent lithium-ion battery technologies that are emerging. In addition, ARBs 

(and U.S EPAs and NHTSAs) battery pack cost estimates appear to be largely 

consistent with a number of consulting studies on future battery costs, and the 

costs tend to be higher than a number of battery manufacturing companies’ 

recent press releases. 

Part II. Regulatory Comments 

Comments grouped in this section are specific to Staff’s suggested modifications and 

the regulatory language presented at the January 26 and 27, 2012 Board Hearing. 

I. ZEV Production Requirement 
43 

41. Comment: ARB received support for the proposed ZEV credit requirement. 

(Fisker, ICCT, Tesla) 

Auto companies may be fighting the proposed ZEV standards, but it is vital to 

update and stick to stringent emissions standards in order to promote zeroemissions technology and force auto manufacturers to improve their designs. 

(Shields) 

Agency Response: ARB appreciates support for the ZEV credit requirement as 

proposed in the ISOR. The Board adopted staff’s modified ZEV credit 

requirement as proposed. 

42. Comment: ARB received several comments calling for two million electric-drive 

vehicles, electric vehicles, and clean vehicles on the road by 2025. (Form Letter 

#3, Form Letter #5, Shields) 

Agency Response: The Board considered four alternatives, including the staff 

proposal, during this rulemaking. Three alternatives (not including the staff 

proposal) were rejected for various reasons, including compliance costs, 

likelihood of ZEV commercialization, and reliance upon non-zero emission 

technologies. The Board adopted staff’s ZEV requirement as proposed in the 

ISOR. The ZEV requirement is meant to act as a minimum requirement. Staff 

developed a likely compliance scenario, in which manufacturers were likely to 

place 1.4 million ZEVs and TZEVs in compliance with the modified ZEV 

requirements. The actual number of ZEVs and TZEVs that will be placed is 

highly dependent on the type of ZEVs and TZEVs produced, the model years in 

which those vehicles are produced, and how many manufacturers are required to 

comply in each model year. Additionally, in previous years most manufacturers 

have over-complied with mandated ZEV requirements. Therefore, it is possible 

that compliance with the increased ZEV requirements could result in far greater 

numbers of ZEVs and TZEVs than those in staff’s likely compliance scenario. 

43. Comment: ARB received several comments calling for 1.8 million electric cars, 

battery, fuel cell, and PHEVs on the road by 2025. (Alegria, EIN, Form Letter #1, 

Illades, Klosterman, PIA, UCS) 

Agency Response: See response to Comment 42. 
44 

44. Comment: Strengthen the credit requirement by 30 percent in a manner similar 

to staff alternative B, but with a smaller increase between 2017 and 2018. This 

will significantly increase the chance of meeting California’s long term climate 

and public health goals. (UCS) 

Agency Response: Alternative B, as presented in the ISOR, was considered 

during development of staff’s proposal. Alternative B was rejected due to the 

steep jump in volume requirement between model year 2017 and 2018 

requirements and increased overall compliance costs. Additionally, see 

response to Comment 42. 

45. Comment: Reduce the mandated percentage of ZEV and TZEV vehicles that 

must be produced and delivered for sale in California to reflect a goal that is 

realistic and attainable. (CNCDA) 

Agency Response: The purpose of the ZEV regulation is to require 

manufacturers to produce advanced vehicles in increasing levels to reach 

commercial levels. Failure to adopt stringent ZEV requirements would mean 

California would likely not reach the goal of ZEV commercialization and cost 

reductions that come from greater production volumes. The Board adopted 

numerous flexibilities that allow manufacturers to customize their compliance with 

the ZEV requirements. 

46. Comment: While we feel that the regulation goals are important, we are 

concerned that the ramp-up rate of the requirements in 2018 and later could 

outpace market demand for such large volumes of advanced technology vehicles 

and that additional flexibility is needed to better align with the goals of the 

program. (LVM) 

The proposed ZEV mandate will not align with market demand, especially in the 

more distant years. The proposal goes beyond commercialization of the 

technology to mandating consumer choice. The current proposal amounts to a 

command-and-control regulation in which government dictates what 

manufacturers must produce and what consumers must buy. The proposed ZEV 

mandate seeks to impose ZEV sales volumes far surpassing those of hybrids, 

and well beyond the volumes needed for the launch of commercial ZEV 

technology. (Ford) 

Agency Response: To assist with the development of a ZEV market, the Board 

did not modify the ZEV requirement for LVMs in 2012 through 2017, to allow 
45 

manufacturers six model years to prepare for increasing requirements starting 

2018 model year. ARB adopted flexibilities that allow manufacturers to use 

multiple compliance paths to meet the increased ZEV requirements, including the 

optional Section 177 state compliance path, the GHG-ZEV over-compliance 

provision, unlimited carry forward for all credits starting in 2012 model year, 

extending the travel provision through 2017 for BEVs, and extending travel for 

FCVs until sufficient hydrogen infrastructure is available in the Section 177 

States. 

47. Comment: We believe that greater penetration of ZEVs and AT PZEVS can 

occur if ARB requires additional sales of these advanced technology light-duty 

vehicles in the near-term. (SCAQMD) 

Agency Response: The Board adopted an aggressive ramp up rate of ZEVs and 

TZEVs between 2012 and 2025 model years. ARB adopted flexibilities written in 

the ZEV regulation that allow manufacturers to start ramping up production of 

ZEVs and TZEVs in the near term in order to smooth the ramp up in the later 

model years. Also, see response to Comment 42. 

48. Comment: CNCDA is concerned with the impact that the aggressive ZEV 

requirements will have upon the market prior to the technology being perfected 

and universally accepted by consumers. When pricing BEVs and FCVs for the 

California market, the ZEV regulations will impose artificial market forces on 

affected manufacturers, who will be faced with choosing between two basic 

pricing strategies: (1) price the vehicles at or above cost, sell what they can, and 

then either ration the sales of their traditional vehicles or face enforcement 

efforts, or (2) price ZEVs under their cost and subsidize the loss by increasing 

the price of their traditional vehicles. The latter approach, which CNCDA 

believes likely, will have the perverse effect of artificially decreasing new car 

sales and making used cars more attractive purchase options in California. 

(CNCDA) 

Agency Response: ARB agrees that manufacturers may employ various pricing 

strategies in order to ensure that their fleets comply with the ZEV (and LEV) 

amendments. To allow for the possibility that some of the costs of ZEVs may be 

displaced onto non-ZEVs as well as other pricing mechanisms, the supplemental 

economic analysis that evaluates potential sales impacts assumes a uniform 

price increase for all vehicle configurations within a given model year, which 

includes the additional costs associated with ZEVs (see Appendix T of the LEV 

ISOR). Staff utilized a model which simulated purchasing behavior, and included 
46 

the option to purchase a used vehicle. Using this model, staff’s results showed 

that new vehicle sales would not decline relative to the baseline scenario. ARB 

will be closely monitoring technological progress, consumer acceptance and new 

vehicle sales during the implementation of the Advanced Clean Cars standards 

to identify any opportunities to encourage growth of the emerging ZEV market.

49. Comment: The proposed regulations require that large volume vehicle 

manufacturers manufacture and deliver for sale a fleet of vehicles that consists of 

15.4 percent ZEVs and TZEVs in model year 2025: a mere 13 model years 

away. This 13 model year time period is the same length of time that hybrid 

electric vehicles have been available to the public (beginning with the 1999 

Honda Insight). After 13 years of heavy marketing and incentivization (sic) 

(including state and federal tax credits and several years of access to carpool 

lanes), hybrid sales made up approximately 2.1 percent of sales nationwide in 

2014 (down from a high of 2.7 percent in 2009), and approximately 4.3 percent of 

sales in California. Unlike with ZEVs or TZEVs, purchasers of hybrid vehicles 

required absolutely no change in driving or fueling behavior (meaning that there 

is no impediment to consumer adoption). If after 13 model years of hybrid 

vehicle availability, marketing, and incentivization (sic), adoption is in the low 

single digits, we fear that the adoption rate will be even lower for ZEVs and 

TZEVs which will require dramatic changes in consumer driving and fueling 

behavior. Rather than setting vehicle manufacturers, new car dealers, and 

alternative vehicles themselves up for another predictable failure, ARB should 

adjust the mandate to reflect a goal that is realistic and attainable. (CNCDA) 

Agency Response: ARB adopted the 2018 through 2025 model year ZEV 

requirements as proposed by staff in the ISOR. ARB sees public benefits in ZEV 

technologies to the consumer, including fuel savings, lower cost of ownership, 

and environmental benefits. ARB sees the new ZEV requirements for 2018 

through 2025 model years as stringent, but attainable. The ramp-up rates were 

based on considering technology cost curves and future GHG fleet standards. 

As production volumes increase, costs decline due to economies of scale. The 

ramp-up rates are necessary to increase volumes and bring costs down so that 

ZEV commercialization can be realized in California. The GHG fleet standard 

absent the ZEV regulation would result in only 6 percent ZEVs by 2025. This 

level of penetration would not likely achieve the cost reductions needed for 

commercialization in the timeframe needed to meet long term emission reduction 

goals. Additionally, most manufacturers have production plans that include 

various zero and near-zero emission vehicles. However, staff is planning to reevaluate the ZEV regulation during the 2017 mid-term review and review the 
47 

progress of the regulation toward meeting the goal of ZEV and PHEV 

commercialization. 

J. ZEV and TZEV Crediting 

50. Comment: Toyota supports the increase in the FCV credit value in 2015 model 

year as a way to achieve the appropriate credit balance between BEV and FCV 

with the extension of BEV travel to 2017 model year. (Toyota) 

Agency Response: ARB appreciates support for the increase in Type V ZEV 

credits in 2015 through 2017 model year. 

51. Comment: Support for tying the amount of credits by each ZEV exclusively to 

the vehicle’s UDDS range, thereby incentivizing long-range ZEVs. (Tesla) 

Agency Response: ARB appreciates support for the new credit mechanism for 

ZEVs in the 2018 and subsequent model year timeframe. The Board adopted 

this credit structure in Resolution 12-11. 

52. Comment: We believe that limiting the portion of a manufacturer’s ZEV 

requirement that may be met with TZEVs sufficiently prioritizes ZEVs over TZEVs; 

in other respects, Fisker believes these credits could be treated the same. 

Specifically, Fisker would urge ARB to treat credits arising from ZEVs and TZEVs 

equally with respect to travel provisions, banking, and carry forward provisions. 

(Fisker) 

Agency Response: TZEVs are a transitional technology to ZEVs. Staff’s 2009 

analysis showed ZEVs will need to be 100 percent of new vehicle sales by 2040 

in order to meet the reductions necessary in the light duty vehicle sector to reach 

the 2050 GHG emission reduction goals. TZEVs able to achieve 10 miles all 

electric range on the US06 drive schedule are credited using the same credit 

equation as used for ZEVs. Additionally, PHEVs are able to run sufficiently 

without electric infrastructure, which is not true of ZEVs, and thus do not qualify 

under the travel provision. However, TZEV credits can be banked indefinitely for 

use toward subsequent model year ZEV requirements. 

53. Comment: In 2018MY [model year], the staff is proposing to reduce the credit 

value for ZEV and TZEV by half or more compared with the current regulation. 

The LVMs are concerned about how this causes a “step change” in the required 

number of vehicles and proposes that the new credit values be phased-in over 

five years beginning in the 2018MY [model year]. This is more in line with the 
48 

expected gradual improvement in ZEV and TZEV technologies and their 

acceptance in the marketplace. (LVM) 

The staff proposal dramatically reduces the credit values for vehicles between 

2017 and 2018. A 2018 PHEV with 20 miles electric range (PHEV20) receives 

approximately 1/3rd (one‐third) the credit value that the identical car receives the 

year before. A 2018 BEV with 100 miles range (BEV100) receives 1⁄2 the credits 

that the identical car receives the prior year. All other things being equal, this 

requires OEMs [original equipment manufacturer] to triple their PHEV volumes 

and double their BEV volumes between one year and the next. Honda strongly 

urges the Board to consider phasing in these dramatic, single year credit 

changes over a short, three year period. Simply put, we would keep the 2018 and 

later formulate for BEVs and PHEVs but add a multiplier that would phase‐out 

over three years. Our proposal is to multiply the new credit values by 1.7 in 2018, 

1.5 in 2019 and 1.3 in 2020. This concept has the sanguine effect of phasing‐in 

the credit reductions by 30 percent in 2018, 50 percent in 2019 and 70 percent in 

2020. Overall volumes would be modified slightly (‐4.2 percent reduction in 

BEVs and ‐8.5 percent for PHEVs) over the 2018 – 2025 period of this program. 

Considering that the CARB staff proposal will obligate OEMs [original equipment 

manufacturer] to build millions of vehicles over the same period, this relatively 

small phase‐in of credits seems reasonable to us, worthy of the Board’s support. 

(Honda) 

Agency Response: While the credit per vehicle is being reduced significantly 

between model year 2017 and 2018, manufacturers’ ZEV requirements in terms 

of credit percentages are also being reduced significantly over what was required 

starting in 2018 model year in the previous rule. There are various mechanisms 

that can be altered to affect the number of vehicles a manufacturer must make in 

a certain year. ARB adopted staff’s proposed credit structure for TZEVs and 

ZEVs starting in 2018, as well as staff’s proposed credit values for 2018 and 

subsequent model years. 

54. Comment: Revise the range-based ZEV and TZEV credit structure to include an 

attribute-based factor which will encourage ZEV technology on a broader range 

of vehicles. The proposed range-based credit structure makes it more difficult to 

earn credits for these heavier larger vehicles. Increasing the mandate to include 

heavier light-duty trucks, without putting appropriate credit structure in place, has 

the practical effect of doubling the percentage requirements for full line 

manufacturers, from approximately 15 percent of the fleet to 30 percent of our 

passenger cars and small MPVs. Without an attribute based credit structure, we 
49 

believe most manufacturers will choose to put the ZEV technology on small subcompact cars. This could flood this already small market with ZEV technologies. 

Meanwhile, the technology may not be offered on larger vehicles needed by 

families, farmers, commercial applications, etc. During the 2008 ZEV rulemaking 

(resolution 08-24) the Board directed Staff to redesign the 2015 model year and 

beyond ZEV program to look at blended plug-in hybrid credit being based on 

different parameters, rather than just range. We do not believe the current 

proposal accomplishes this objective. Ford believes an attribute-based credit 

factor is necessary and appropriate to encourage ZEV technology on a broader 

range of vehicles and to not disadvantage full line manufacturers that produce 

larger vehicles that provide the utility that consumers need and want. (Ford) 

Chrysler urges staff to carefully examine plug-in vehicle market trends over the 

next several years. In the current regulation and ISOR, ZEV credit is provided 

based on plug-in vehicle electric range. Electric range-based credits encourage 

manufacturers to build smaller vehicles (thereby minimizing battery costs needed 

to achieve the desired range). Additional attribute-based metrics (e.g., vehicle 

footprint or passenger volume) could encourage manufacturers to build a wider 

variety of vehicle types and sizes, increasing ZEV marketability. (Chrysler) 

Agency Response: Staff considered including a vehicle’s size in a future credit 

system, which might have had the effect of placing ZEV technologies in larger 

platforms. However, staff dismissed such an approach because longer range 

vehicles are generally on larger platforms, which reduced the need to credit the 

vehicle’s footprint as well as its range. Additionally, such an approach would 

incentivize larger vehicle platforms, which is not necessarily the goal of the ZEV 

regulation. The environmental benefit is more directly linked to the vehicle’s zero 

emission miles rather than its platform. The goal of the ZEV regulation is to 

commercialize ZEVs in California. The Board adopted a credit structure in the 

2012 rulemaking that is appropriate for this timeframe for technology neutrality. 

55. Comment: If CARB increases credits for Type V (300 mile FCV) ZEVs to 

appropriately incentivize this future technology, it should immediately include 300 

mile BEVs into the Type V category, given that DC [direct current] Fast Charging 

infrastructure is being deployed at a fraction of the cost of hydrogen infrastructure. 

(PIA) 

Agency Response: Comment noted. A BEV with 300 mile range and the ability 

to refill to 90 percent in 15 minutes or less is eligible to receive Type V ZEV credit. 
50 

56. Comment: All true ZEVs should have premium value over non-ZEVs – careful 

consideration of new concepts should not devalue true ZEVs. (Mitsubishi) 

Agency Response: Pure ZEVs can be used with no restriction throughout the 

ZEV regulation. All non-ZEVs, including the new BEVx category, are limited in 

how a manufacturer may use those credits toward meeting its ZEV requirement. 

Though credit values may be similar, credit treatment is more preferential 

towards pure ZEVs. 

57. Comment: All ZEVs should have similar credit value – large multipliers are not 

logical – one car replaces one car. (Mitsubishi) 

Agency Response: Comment noted. ARB considered simplifying the credit 

structure but was concerned that awarding all vehicles the same credit would 

encourage manufacturers to produce low performance vehicles that would not be 

attractive to consumers. The least costly way to satisfy a “one-ZEV to one-credit” 

requirement would be to build vehicles with the minimum capabilities needed to 

meet the threshold. There would be no incentive to add additional zero emission 

range. The Board adopted a credit structure in the 2012 rulemaking that is 

appropriate for this timeframe for technology neutrality. 

K. Range Extended Battery Electric Vehicles (BEVx) 

58. Comment: ARB received support for the creation of the BEVx (Type I.5x and 

Type II vehicle) category. (BMW, Chrysler, PIA, SCAQMD, VW) 

Agency Response: ARB appreciates support for the new BEVx vehicle category. 

The Board adopted BEVx vehicle category in the ZEV regulation at its March 22, 

2012 hearing. 

59. Comment: ARB received comments that a BEVx has the ability to pollute, and 

therefore is not a BEV. (ICCT) 

Agency Response: Comment noted. ARB limited the use of BEVxs toward 

meeting a manufacturer’s pure ZEV requirement due to the fact that a BEVx is 

not a pure ZEV. 

60. Comment: Re-evaluate the BEVx credit treatment because it is overly generous, 

thus picking a technology “winner”. Furthermore, if this technology is treated like 

a pure-ZEV, then driver inducements to discourage operation on the auxiliary 

power unit should be required. Because this technology can be used to offset 50% 
51 

of the pure-ZEV requirement, a manufacturer may avoid producing pure-ZEVs by 

using this technology in conjunction with the GHG over-compliance option that 

may also be used for up to 50% of the pure-ZEV requirement. The ZEV 

regulations should not provide some non-full-line manufacturers with an escape 

hatch from the production of pure ZEVs, particularly when the absence of an 

attribute-based approach gives full-line manufacturers such an enormous ZEV 

task. (Ford) 

Agency Response: Using the same credit methodology for determining credits 

for BEVs and BEVxs is in line with ARBs treatment of a BEVx. BEVs are similar 

to BEVxs, and likely will be driven more similarly to a BEV than a PHEV. It is 

appropriate to place a cap on how BEVx credits may be used to satisfy a 

manufacturer’s requirement, rather than use a different methodology for 

determining BEVx credit. Additionally, the same crediting method is being used 

for US06 capable TZEVs as is being used for ZEVs and BEVxs. A different 

crediting method that would result in less credit for BEVxs would overly 

complicate the regulation. The BEVx category is not targeted for a specific 

manufacturer, and may be used by any manufacturer to generate credit in the 

ZEV program. Also, in regards to caps, see response to Comment 24. 

61. Comment: ICCT encourages CARB to determine the appropriate regulatory 

treatment of BEVx based on two fundamental ZEV program purposes: (1) 

encouraging battery/fuel cell production and electric miles traveled and (2) 

creating a transition to pure zero tailpipe emission vehicles. ICCT sees the 

potential for BEVx to contribute toward the first goal by providing an additional 

option for consumers seeking a vehicle with a large battery pack and a gasoline 

powered range that is no greater than the battery electric range. ZEV credit 

values for BEVx range beyond the 80 mile cap imposed on TZEVs are 

reasonable as they reflect the potential for greater utility of these vehicles and 

their contribution towards battery production volume. On the other hand, the 

types of vehicles and applications that would occur under the proposed 

regulation and their real-world usage patterns are unclear. Thus, we encourage 

ARB to restrict the proposal to grant the BEVx pure ZEV credits to the 2014-2017 

compliance period only, with the option to extend later based on the percent of 

pure electric driving and total electric miles compared to BEVs and FCEVs with a 

comparable range. (ICCT) 

Agency Response: Comment noted. ARB adopted staff’s proposal to include 

BEVxs through 2025 model year. However, Resolution 12-11 includes direction 

for staff to return to the Board with in-use data for BEVxs and TZEVs, and if 
52 

warranted, proposed changes to the regulation in regards to treatment of these 

vehicle types. 

62. Comment: CEERT recognizes that vehicles under this new category within the 

ZEV regulation have the potential to allow drivers to achieve greater zero‐

emissions miles by helping to address their range‐anxiety. However, based on 

the criteria proposed to define this vehicle category – through to the 2025MY 

[model year]– and the creative ability of the engineers for the automobile 

manufacturers, it is unclear what approaches a manufacturer might develop for 

these vehicles and what their applications might be in real‐world use. We feel it 

essential that ARB require that any automobile manufacturer introducing one of 

these vehicles into the market, especially before the year 2017, be required to 

participate in a monitoring and verification program that would allow ARB to 

develop a performance or attribute‐based approach to credit generation for these 

vehicles. The simplest approach might be to award credits to the vehicles based 

on a statistically rigorous analysis of their actual real‐world performance. ZEV 

credits for these vehicles would thus be based on the proportion of zero‐emission 

vehicle miles driven relative to the pure‐ZEV version of the same vehicle. ARB 

should continue to monitor developments in this vehicle category beyond the 

year 2018 to ensure that these vehicles are being designed and built in a manner 

consistent with the program goals. (CEERT) 

Establish a rigorous monitoring program for automakers to provide data to ARB 

on Type I.5x, Type IIx and BEVxs use so that ARB can adjust credits received or 

the criteria used to qualify as a BEVx based initial data on their real-world allelectric-miles versus gasoline miles. (UCS) 

Agency Response: Comments noted. Though no formal verification program 

was adopted by the Board, Resolution 12-11 includes direction for staff to return 

to the Board with in-use data for BEVxs and TZEVs and, if warranted, proposed 

changes to the regulation in regards to treatment of those vehicles. 

63. Comment: The following changes will more properly align the BEVx category 

between the ZEV and TZEV categories: 

a. The minimum range requirement for BEVx should be more no more than the 

minimum range requirement for the ZEV category of 50 miles. 

b. The limit on the range for the range extending engine will limit both the market 

acceptance of BEVxs and the total all electric miles traveled. We propose that 

there be no limit on the range of the APU [auxiliary power unit]. 
53 

c. There should be some flexibility in not allowing the APU [auxiliary power unit] 

to start under any user-selectable driving mode unless the energy storage 

system used for traction power is fully depleted. For example, the Volt has a 

“Mountain Mode” switch that allows the driver to preserve battery energy needed 

for climbing a mountain so that the driver is not limited by the less powerful APU 

[auxiliary power unit]. We believe switches such as Mountain Mode make the 

Volt more desirable to a broader cross-section of customers, a goal that we all 

need to strive for with our ZEV program vehicles. (GM) 

Agency Response: The Board specifically rejected moving the minimum range 

threshold for BEVxs from 75 miles to 50 miles, and did not include an additional 

vehicle category similar to the BEVx, but with lower minimum range and longer 

auxiliary power unit (APU) range, that would be allowed to count towards a 

manufacturer’s minimum pure ZEV requirement. 

ARB believes that the BEVx is a relatively high-electric range BEV to which an 

APU is added. If the BEVx category were modified to (a) reduce the minimum 

electric range, (b) remove limitations on gasoline APU range, and (c) allow 

unrestricted use of the gasoline APU, these vehicles would no longer have any 

features to distinguish them from conventional PHEVs. The objective of the 

BEVx is not to develop a PHEV with universal appeal, but rather, to expand the 

market for BEVs by adding an option for a “backup” APU and enable a class of 

near-ZEVs that achieve greater than 90 percent zero-emissions VMT. 

However, Resolution 12-11 includes direction for staff to return to the Board with 

in-use data for BEVxs and PHEVs and, if warranted, proposed changes to the 

regulation. Researchers will be modeling and studying BEVx driver behavior in 

the coming years to assess the electric range fraction achievable with BEVxs. 

64. Comment: We have heard arguments that the BEVx’s APU is really intended to 

address range anxiety by being just powerful enough to provide a “limp-home” 

mode, but not powerful enough to intentionally use on longer trips that will involve 

APU operation. This is intended to result in a high fraction of a BEVx’s miles 

being electric vehicle (EV) miles, making it similar to a BEV where 100 percent of 

its miles are EV miles. While this may result in a high percentage of the BEV’s 

miles being electric for that one vehicle, it does not mean a high percentage of a 

given household’s miles will be electric. For household’s (sic) that own such a 

BEVx, or a BEV, we believe most will need a second vehicle which will most 

likely be a conventional gasoline vehicle for the foreseeable future. This 
54 

conventional vehicle, which may even be an older high emitter, will be used for 

the many trips that the limp-home BEVx or pure BEV cannot be used for. Our 

proposed BEVx criteria (discussed in Comment 63) the BEVx can be the single 

vehicle for the household, and can be used for all trips. We believe that even 

though the percentage of EV miles may be lower on our BEVx, the total EV miles 

for the household will be greater. And it is the total EV miles that are a direct 

indication of the fleet-wide GHG emissions reduced and petroleum displaced. 

(GM) 

Agency Response: ARB recognizes that further study is necessary to determine 

how BEVs or BEVxs will eventually be integrated into multi-car families or “microfleets” of vehicles. However, without these relevant studies of driver behavior, it 

is not yet possible to predict vehicle type and choice behavior with any degree of 

confidence. Until driver behavior data is available, a case could also be made 

that households which can afford an early-market BEVx are more likely to also 

have a later model and therefore cleaner and more efficient “second” vehicle in 

their garages. It is even reasonable to propose that the second vehicle in such a 

household is likely to be a PHEV that is used by another family member routinely, 

or, by the entire family for long trips. Until BEVx drivers are studied and a better 

case can be made, ARB believes that credit should be allocated according to an 

individual vehicle’s actual performance instead of the performance of a 

combination that includes an unknown second vehicle. 

L. Transitional Zero Emission Vehicles (TZEV) 

65. Comment: Carefully consider how vehicles that achieve high levels of electric 

miles fit within the ZEV regulation categories, so that vehicles such as the Volt 

are appropriately credited and incentivized. (GM) 

Agency Response: ARB has considered the higher percentage electric VMT 

capability of vehicles like the Volt, and believes that the extra credit assigned to 

US06-capable TZEVs appropriately reflects this increased percentage electric 

VMT capability as well as the Volt’s important place in the transition towards full 

ZEVs in the future.

66. Comment: The proposed credit for TZEVs is lower than previously proposed (e.g. 

0.5 for TZEV20 versus 0.7), which greatly impacts the volumes mandated. The 

LVMs requested that the 0.3 additive factor in the TZEV credit equation be 

changed to 0.5 to restore TZEV credit levels to be more in line with those 

previously proposed. Thus the LVMs recommend the following TZEV equation: 

TZEV Credit= [(0.01*EAERudds) + 0.5] 

Plus 0.2 additional credit for 10 miles US06 all electric range capability 
55 

Minimum EAERudds ≥ 19 miles (No AERudds minimum) 

Maximum credit = 1.1 at 80 miles or 1.3 including 0.2 US06 allowance 

Where: EAERudds – ERF * Rcdaudds

 (BMW, LVM) 

Agency Response: When developing the credit structure for ZEVs, ARB chose 

to strike a balance between competing vehicle technologies and stakeholder 

recommendations. If the suggested proposal to increase the credit for the 

minimal PHEV was implemented, then stakeholders that favor US06 drive 

schedule (US06) capable PHEVs would, in turn, argue for additional credit for 

these vehicles relative to the increased minimal PHEV. These US06 capable 

PHEVs would end up earning more credit than allocated for ZEVs in spite of the 

fact that they do not achieve the same emissions reductions. However, 

Resolution 12-11 includes direction for staff to return to the Board with in-use 

data for BEVxs and PHEVs, and if warranted, proposed changes to the 

regulation.

67. Comment: Staff is now proposing to limit the use of this technology PHEV with a 

new AER requirement on the assumption that battery technology will improve 

such that vehicles should naturally be able to operate in EV only mode at higher 

speeds and loads. While Toyota agrees that battery technology will improve for 

future generation PHEVs, we strongly object to this requirement because it limits 

the market flexibility in the following manner: battery improvements can be used 

to reduce cost rather than increase range and the market should determine if 

more EV operation or less cost is more important; this requirement may 

unnecessarily restrict PHEV to smaller vehicles and the customer will ultimately 

determine the success or failure of PHEVs as a mass market technology. All 

automakers are trying to build this market and it’s inappropriate for ARB to 

determine winners and losers and reduce flexibility at this very early stage. 

 

We believe that these plug-in Prius can and should play a large role in the ZEV 

regulation. They should not be viewed as transitional. They will be a key part of 

electrification for the fleet for the foreseeable future because it can reach a 

broader public due to the ability to cover all customer driving use at a lower cost. 

Specifically, we believe the current staff proposal may limit the potential for plugin hybrids. One, they are proposing additional minimum hour requirements that 

would dictate the circumstances when an engine of a plug-in hybrid turns on. 

This may limit the expansion of plug-in technology to larger heavier vehicles of 

more cost sensitive models. We believe that there should be a single minimum 
56 

requirement, which is the EAER, and I believe staff has proposed some change 

on part of that. (Toyota) 

Agency Response: ARB agrees with this first suggestion, and adopted staff’s 

suggested modifications as provided at the 2012 January hearing to change 

TZEV credit determination based on EAER instead of AER. 

ARB also believes that a minimum 10 mile AER requirement for all PHEVs was 

appropriate and necessary. This requirement ensures all PHEVs receiving credit 

through the ZEV regulation in 2018 and subsequent model years have some 

zero-emission capability, which results in GHG and criteria pollutant benefits to 

California. The current model Prius PHEV easily exceeds the 10 mile AER 

threshold requirement for TZEVs, and most, if not all other manufacturer 

proposed PHEV models also exceed the proposed minimum requirement. 

Additionally, ARB believes this minimum AER requirement is necessary to 

continue to drive this technology to commercialization. ARB is hopeful that the 

Prius PHEV will become a success and play a significant role in the ZEV 

regulation. ARB also expects that battery performance and cost effectiveness 

will continue to improve so that this same 10 mile AER capability can then 

become commonplace in mid-sized PHEVs, and later on, in large PHEVs. 

68. Comment: In order to be eligible for TZEV credits from 2018MY, staff is 

proposing to include a new requirement that a TZEV achieve a minimum 10 mile 

AER (i.e., a minimum 10 mile drive on the UDDS test cycle without the engine 

starting). This minimum requirement is independent of minimum 10 mile AER on 

the US06 test cycle which earns an additional 0.2 credits/vehicle. The LVMs are 

concerned that this new constraint may inhibit the expansion of plug in 

technology to larger vehicles and more cost sensitive vehicle segments thereby 

further limiting market expansion. We believe that this proposed minimum AER 

requirement should be replaced with the current requirement for a minimum 

EAER. (LVM) 

Change the TZEV credit structure for blended operation PHEVs (e.g. replace 

AER with EAER) so that this technology is not discouraged before it has even 

been introduced and we learn how customers will use their vehicles. Ford 

recommends that the minimum range be based on EAER, in conjunction with 

change the zero emission VMT TZEV allowanced from Rcda to EAER. (Ford) 

Agency Response: The new, optional, TZEV category is intended to encourage 

development and production of vehicles that are much more ZEV-like than the 
57 

vehicles developed for the former AT PZEV option. In order to further transition 

towards ZEVs, vehicles will require increases in both (1) electric drive system 

power and (2) energy storage capability. An EAER-only requirement with no 

threshold for minimum electric drive system power would only address energy 

storage capability, and would not necessarily result in vehicles with a desirable 

“balance” of electrical power and energy. An EAER-based threshold would also 

require an additional, separate, and more complex power requirement in 

combination with the EAER energy-only requirement. Setting a minimum 10 mile 

AER threshold appropriately combines the electric drive system power and 

energy storage capability requirements. 

69. Comment: Minimum PHEV/TZEV qualification of 10 miles AER (versus 

"equivalent" AER) – The automakers will tell you that they need this compliance 

path, yet we need to scale the number of all electric VMT as quickly as possible. 

PIA believes that a minimum of 20 miles of AER should be the baseline 

requirement going forward, with the potential to scale up an additional 5 miles 

AER each year. (PIA) 

Agency Response: The Board adopted a 10 mile AER requirement for the 

minimum TZEV threshold that will still encourage development of larger PHEVs. 

Adopting a minimum 20 mile AER might discourage development of PHEVs 

across all vehicles classes and platforms. The Board directed staff in Resolution 

12-11 to study electric VMT across various vehicle technologies and adjust 

credits as appropriately award advanced vehicles. 

70. Comment: Staff is proposing to reduce the portion of the credit requirement that 

can be met with TZEVs from slightly over 50 percent in 2018MY to 28 percent in 

2025. The LVMs are concerned about this proposed phase-down and believe 

that the TZEV credit share should remain at 50 percent. Retaining the 50 percent 

credit requirement share will give the market more latitude in choosing between 

ZEVs (BEVs and FCEVs) vs. TZEVs (PHEVs), thereby increasing the overall 

chances of success in the marketplace. It also provides OEMs [original 

equipment manufacturers] more flexibility in meeting the ZEV mandate allowing 

them to better align their choices of ZEV program vehicles with their product 

plans. (LVM) 

In order to better reflect projected customer demand on electric vehicles, we 

propose to increase the flexibility for manufacturers to meet total ZEV 

requirement with 50 percent TZEV credits. (BMW) 
58 

Toyota is concerned with this phased-down and believes that the TZEV credit 

share should remain at 50 percent. Retaining the 50 percent credit requirement 

share will give the market more latitude choosing between ZEVs (BEVs and 

FCVs) vs. TZEVs (PHEVs), thereby increasing the overall chances of success in 

the marketplace. It also provides OEMs [original equipment manufacturers] more 

flexibility in meeting the ZEV mandate by allowing them to better align their 

choices of ZEV program vehicles with the directions of the market. If BEVs are 

more preferred, the requirements would allow them to satisfy a greater share and 

vice versa. Finally, as the attached battery analysis indicates, TZEVs can 

provide substantial benefits, and given the lower credit value of TZEVs vs. ZEVs, 

allowing a greater portion of TZEV compliance might actually result in greater 

petroleum savings (as well as reductions in GHGs) due to a much larger total 

volume of vehicles. (Toyota) 

Agency Response: ARB agrees that TZEVs will play a role in the next ten years 

of advanced vehicle commercialization and increased zero emission VMT in 

California. Allowing manufacturers to meet up to half of their requirement with 

credits from TZEVs could result in more vehicles, but fewer pure ZEVs. Staff’s 

2009 analysis showed that pure ZEVs ultimately are needed to help California 

reach its 2050 GHG emission reduction goals. The pure ZEV requirement will be 

evaluated along with other aspects of the regulation at a later ZEV review. 

71. Comment: In the proposed zero-emission VMT allowance calculation we still see 

some room for ambiguities which should be avoided by explicitly describing the 

calculation of EAERu as follows: 

10 miles ≤ Urban equivalent all electric range (EAERu) ≤ 40 miles 

VMT allowance credit = EAERu * (1-UFRcda)/11.028 

EAERu = ERF * Rcda 

EAERu > 40 Miles: 

VMT allowance credit = EAERu * (1-UFRcda)/11.028 

EAERu = ERF * Rcda 

Rcda (EAERu40) depends on ERF [electric range fraction] and presetting of 

EAERu40 = 40 miles 

(BMW) 

Agency Response: The comment appears to make use of, and restate, a 

definition for electric range fraction (ERF) that already exists in the ARB PHEV 

test procedure. ERF is a derived value that is not commonly used by the industry. 
59 

When possible, ARB prefers to directly reference the test procedure results, 

EAER and Rcda, and not to introduce additional derived values. 

M. Neighborhood Electric Vehicles (NEV) 

72. Comment: Do not implement retroactive restrictions on previously earned credits 

(e.g. NEVs) that were earned in good faith because it discourages manufacturers 

from taking early action. (Ford) 

Agency Response: There were no retroactive restrictions placed on previously 

earned NEV credits in this rulemaking. All changes made affected model year 

2015 through 2025. 

73. Comment: The proposal to extend NEV credits (page A-3-7 of post-2018 

regulation) would indefinitely detract from the unique focus of the California ZEV 

program on development of mainstream ZEVs. Lead-acid batteries are a welldeveloped technology (as vehicle starter batteries and as the primary energy 

source for over 100 million 2 and 3 wheeled vehicles in China) and are not a 

pathway to full performance zero emission vehicles. Encouraging NEVs for 

neighborhood transportation could also be inconsistent with California’s goals of 

encouraging VMT reductions through walking, cycling, and public transit. If 

CARB staff do include NEV credits, limiting their availability as much as possible 

would be beneficial. (ICCT) 

Agency Response: NEVs produce zero emissions and are useful in limited 

applications. ARB adopted limitations for 2018 and subsequent model years 

which limit the use of NEV credits to 25 percent of the portion of a manufacturer’s 

requirement that may be met with TZEVs, and has reduced the amount of credit 

new NEVs earn from 0.30 credits to 0.15 credits. 

74. Comment: In regards to subdivision 1962.1(g)(6)(A), Use of NEV credits, and 

allowing up to 50 percent NEV credits to meet TZEVs and AT PZEV credits for 

2012 – 2017, I think that allowing NEV credits to meet up to 50 percent of TZEV 

credit requirements is too high, it should be reduced to just at 25 percent level to 

encourage the growth of this TZEV technology sector. (Chew) 

Agency Response: NEVs produce zero emissions and are useful in limited 

applications. It is appropriate to allow NEVs to fulfill the same amount of a 

manufacturer’s requirement that may be met with non-ZEVs in 2012 through 

2017 model years. 
60 

N. Travel Provision 

75. Comment: Extending the travel provision for BEVs through 2017MY is a logical 

flexibility for manufacturers. This extension reflects the higher market uncertainty 

and infrastructure development in ZEV Program states outside of California. This 

extension provides additional time for infrastructure and market demand to 

develop in these states. It also respects product plans developed by 

manufacturers based on the information shared by ARB staff in multiple public 

workshops. At these workshops, no opposition to this flexibility extension was 

voiced. (Chrysler) 

Agency Response: ARB appreciates support for extending the travel provision 

for BEVs through 2017 model year. 

76. Comment: ICCT supports the extension of travel for FCVs, recognizing the 

significant effort needed to install necessary infrastructure. (ICCT) 

Agency Response: ARB appreciates support for extending the travel provision 

for FCVs until sufficient infrastructure is available in the Section 177 states. 

77. Comment: BMW appreciates ARBs staff proposal to extend compliance flexibility 

concerning the new BEVx category and the travel provision. The extension of 

this provision to all qualified BEV and BEVx types through model year 2017 will 

help all LVMs and transitioning LVMs to prepare and expand their BEV offerings 

to other section 177 ZEV states, where the markets for EVs [electric vehicles] 

haven’t yet matured in the same way as the California market. (BMW) 

Agency Response: ARB appreciates support for including BEVxs in the travel 

provision through 2017 model year. 

78. Comment: BEVx are not subject to infrastructure requirements in the same way 

as ZEVs. TZEVs with similar refueling patterns do not benefit from the travel 

provision and thus travel for BEVx vehicles does not appear to be justified. 

(ICCT) 

Agency Response: Throughout the ZEV regulation, BEVs and BEVxs are 

treated similarly. The intent for allowing BEVx credits to travel is because BEVxs 

are expected to be operated like BEVs, and dependent on electric infrastructure 

to be truly useful and fully functional vehicles. This vehicle has substantially 

more electric range than currently announced PHEVs, and with electric range 

comparable to full function BEVs. 
61 

79. Comment: Please ensure in the regulation text the understanding of ARB that in 

the 2009 to 2011 model years, the 1:1 travel provision is applicable for IVMs. 

Proposed language should only affect model years 2012 through 2017. (BMW) 

Agency Response: It is not necessary to clarify this language, since the 

interpretation is of subdivision 1962.1(d)(5)(E) is well documented, and all IVMs 

have been informed in a letter dated December 17, 2011, that proportionality will 

not apply to those manufacturers through model year 2011. 

80. Comment: Restore the travel provision for all ZEVs and TZEVs. (CNCDA) 

Agency Response: The Travel Provision will remain in effect for BEVs through 

2017 model year, and for FCVs until sufficient hydrogen infrastructure is 

available in the Section 177 states. ARB believes that by 2018, Section 177 

states will be ready to support BEVs in increasing numbers. This is evidenced by 

the optional Section 177 state compliance path, a provision forged by eager 

Section 177 states and manufacturers to ensure ZEVs are placed in those states 

prior to 2018 model year. The travel provision has never been available for 

TZEV credits. 

81. Comment: The reason for this, according to the ISOR, was that an OEM would 

have to sell 3 BEVs (average 9 ZEV credits) to be of the same value as 1 FCV. 

However, BEVs are proposed to travel until 2017. The Section 177 states would 

also like to set a reasonable and achievable level of pool for the compliance, with 

the acceptance from the OEMs [original equipment manufacturers]. As such, 

there is no urgency for this argument. The Type V FCV will stay as it is to get 7 

credits, with 1 credit per 50 mile range. (Chew) 

Agency Response: If travel expired for BEVs after 2014 model year, as was in 

the 2008 version of the regulation, there would be an advantage to produce 

FCVs during the 2015 through 2017model year timeframe, since the 

manufacturer would not have to produce as many FCVs as BEVs in compliance 

with California and Section 177 state ZEV requirements. Because staff proposed 

to extend the travel provision for BEVs through 2017 model year, the incentive to 

produce FCVs is less. Therefore ARB adopted an increase in Type V ZEV 

credits (300 mile FCVs) from 7 credits to 9 credits to ensure FCVs are 

appropriately incentivized in the 2015 through 2017 timeframe. 
62 

82. Comment: In regards to subdivision 1962.2(d)(5)(E), counting specified ZEVs 

placed in service in a Section 177 state and in California, ARB should encourage 

the early deployment of FCVs by encouraging that only after a minimum level of 

FCV in the North East Region / Section 177 state before any excess credits can 

be traveled. The minimum level should also account for the placement of the 

battery electric vehicles. In short, only after the minimum quantities of BEVs and 

FCVs, that any excess FCV credits can be traveled. (Chew) 

Agency Response: The purpose of the travel provision is to allow manufacturers 

to focus demonstration efforts in centralized locations and to help manufacturers 

place ZEVs in areas prepared with sufficient complementary policies such as 

infrastructure and incentives. Starting in 2018 model year, the travel provision 

will no longer apply to BEVs, and therefore Section 177 states can expect 

vehicles to be placed outside of California, without requiring a minimum number 

to be placed. It is difficult to justify requiring a minimum number of FCVs in the 

Section 177 states without sufficient hydrogen infrastructure to support those 

vehicles. However, through the optional Section 177 state compliance path, 

manufacturers will have the option to place a minimum number of BEVs or FCVs 

in the Section 177 states, and will not be able to travel credits associated with 

those vehicles. 

83. Comment: Since travel provisions remain a controversial aspect of the 

regulation, ARB could propose subordinating travel to credit trading. That is, a 

manufacturer would only be able to “travel” its credits after demonstrating that it 

could not meet its requirement in a given state through the procurement of 

credits from other manufacturers. (Fisker) 

Agency Response: The ZEV requirement is a performance standard which may 

be met in many ways. ARB will not require manufacturers to purchase credits 

towards compliance with their ZEV requirements. Each manufacturer chooses a 

compliance strategy to meet its ZEV requirements. Such a change would 

reduce flexibility for manufacturers. 

84. Comment: It is proposed that the “Travel Provisions” be limited to 

“Manufacturers with a ZEV requirement producing ZEVs.” Our understanding is 

that a manufacturer not subject to the ZEV mandate (e.g. small volume 

manufacturer (SVM)) would not be allowed the “travel” credits. If the SVM 

provides that credit to an LVM, then the LVM would decide whether to “travel” 

that credit. However, the regulatory language is not very clear and should be 

clarified. (LVM) 
63 

The ISOR states that the travel provision only applies to manufacturers that have 

a requirement. Fisker would ask ARB to clarify that credits procured from a 

manufacturer without a requirement, then used by a different manufacturer with a 

requirement, would be allowed to travel. (Fisker) 

Agency Response: Comment noted. ARB clarified the regulatory language to 

ensure IVMs and LVMs may travel ZEV credits. Only IVMs and LVMs may travel 

credits because these are the only manufacturers with a requirement, and the 

travel provision specifically helps a manufacturer comply with other Section 177 

state requirements, and is not meant to act as a credit banking provision for all 

manufacturers. This was the intent of the language proposed in the ISOR. The 

Board approved the final travel provision language at its March 22, 2012 hearing. 

85. Comment: ARB Staff has included (ISOR Section 2.1.2, “Travel Provision”) 

specific clarifying language to prohibit travel provision credits for iLVM 

[independent low volume manufacturer] OEMs [original equipment 

manufacturers] such as Mitsubishi Motors through 2017MY. As discussed above, 

this is detrimental considering we must fully comply with ZEV 2.0 in 2018MY 

without sufficient credits. Previously, ARB Staff stated that iLVM [independent 

low volume manufacturer] OEMs [original equipment manufacturers] are not 

allowed to gain travel provision credits. When asked to identify the regulatory 

language that prohibits iLVM [independent low volume manufacturer] travel 

provision credits, ARB staff stated that it was the “intention” of the regulation. 

ARB Staff mentioned they are concerned that non-traditional OEMs (EV-only 

OEMs) [electric vehicle-only original equipment manufacturers] would utilize the 

travel provision to gain credits for sale. 

Therefore, this additional regulatory language is added to legitimize their 

previous finding without regard to the regulated parties. Regardless of OEM 

[original equipment manufacturer] size, ZEV vehicles and the credits generated 

from these vehicles are highly valuable. ARB Staff action devalues ZEV credits 

from all iLVM [independent low volume manufacturers] OEMs [original equipment 

manufacturers]. Given that iLVMs [independent low volume manufacturers] will 

be reclassified in 2018MY, these credits may be necessary for compliance and 

therefore, very valuable to transitioning iLVMs [independent low volume 

manufacturers] such as Mitsubishi Motors. Allow OEMs [original equipment 

manufacturers] required to comply in 2018MY to bank Travel Provision credits. 

This will eliminate ARB Staff’s problem of non-traditional OEMs [original 

equipment manufacturers] from stockpiling credits for sale and allow current 
64 

iLVMs [independent low volume manufacturers] to transition to IVM status in 

2018 model year. (Mitsubishi) 

Agency Response: The Travel Provision applies only to manufacturers with ZEV 

requirements. The intent of the Travel Provision is compliance. Subdivision 

1962.1(d)(5)(E)1.a., b., and 2. all state “ZEVs....may be counted towards 

compliance...” which implies the credits may only be traveled by a manufacturer 

using the credits towards compliance with a requirement. Independent low 

volume manufacturers (ILVM) and small volume manufacturers (SVM) are free to 

deliver for sale and place in service ZEVs in any Section 177 state, and may 

bank those credits for use in a future year. ILVMs have no ZEV requirement in 

any state which is sufficient compliance flexibility. 

86. Comment: ZEVs should not be required in areas not prepared to develop 

sufficient infrastructure –this affects the Travel Provision and ZEV Compliance 

Pools. (Mitsubishi) 

Agency Response: The Clean Air Act allows other states to adopt California 

vehicle emission standards including the ZEV regulation. ARB does not have 

authority to change the Clean Air Act, nor any authority over states which adopt 

California’s regulations. The Travel Provision will remain in effect for BEVs 

through 2017 model year, and for FCVs until sufficient hydrogen infrastructure is 

available in the Section 177 states. ARB believes by 2018, Section 177 states 

will be ready to support BEVs in increasing numbers. This is evidenced by the 

optional Section 177 state compliance path, a provision forged by eager Section 

177 states and OEMs to ensure ZEVs are placed in those states prior to 2018 

model year. 

87. Comment: PIA has been consistent in its opposition to the Travel Provision in 

the ZEV regulations. At best it dilutes the overall number of plug-in (sic) 

available to the market. At worst it creates a mechanism for automakers to 

produce fewer vehicles and negatively impacts the other states who have 

adopted ZEV regulations. Simply stated it encourages gaming the system and 

should be phased out immediately. (PIA) 

Agency Response: Comment noted. The travel provision has allowed 

manufacturers to focus demonstration efforts in centralized locations and helped 

manufacturers to place ZEVs in areas prepared with sufficient complementary 

policies such as infrastructure and incentives. The travel provision is scheduled 

to be phased on in model year 2017 for BEVs, and will continue until sufficient 
65 

hydrogen infrastructure is available for FCVs. Additionally, the optional Section 

177 state compliance path will bring ZEVs earlier to the Section 177 states, in 

2016 and 2017 model years. This shift in the travel provision reflects the growing 

number of ZEVs available for sale and increasing support for ZEVs in the Section 

177 states, which is necessary for ZEV commercialization. 

88. Comment: Global Automakers fully supports pooled compliance with the Section 

177 States under the LEV III and GHG regulations, and also believes that such a 

provision would add additional flexibility under the ZEV program. We 

recommend that ARB and Section 177 States adopt a pooling provision for the 

ZEV program, too, to facilitate ZEV manufacturer compliance while not unduly 

penalizing a manufacturer that may have a shortfall in one state but has overcomplied in another, so long as overall required volumes are met. (Global) 

With respect to compliance flexibility and softening the required ramp-up of BEV 

sales in the Section 177 ZEV states, BMW recommends the implementation of 

an additional pooling provision option. This option could be phased-in during 

model years 2015 to 2017 and continued from 2018 and subsequent model 

years, when travel for qualified BEVs and BEVx types expires. (BMW) 

Agency Response: Manufacturers have the option to qualify for pooling for ZEV 

and TZEV credits in the Section 177 states if they choose to participate in the 

optional Section 177 state compliance path. The Section 177 states will monitor 

how pooling affects the placement of vehicles within the East and West Region, 

and make a determination at a later date on whether pooling is appropriate for all 

manufacturers and vehicle types. 

O. Section 177 State Optional Compliance Path 

89. Comment: ARB received support for the optional Section 177 state compliance 

path, or for an option which gradually introduces ZEV technologies into the 

Section 177 states. (BMW, CT, Ford, GM, Global, Honda, LVM, MD, NJ, NY, 

Nissan, OR, Toyota, UCS, VT) 

Agency Response: ARB appreciates support for the new optional Section 177 

state compliance path. The Board approved the final ZEV regulation, including 

regulatory language for the optional Section 177 state compliance path on March 

22, 2012. 

90. Comment: Chrysler believes that among others, the following principles must 

continue to be preserved if such an agreement with the Section 177 states 
66 

regarding early placement of ZEVs is reached and staff develops appropriate 

regulatory text to implement the agreement. 

Regulatory text implementing such an agreement must respect the identicality 

requirements of the Clean Air Act. Chrysler’s legal staff will be reviewing 

changes proposed to implement such an agreement and we reserve our legal 

rights to challenge any provision which infringes upon these requirements. 

Chrysler notes that it does not, by omission of any potential legal or policy 

objection to any aspect of this ARB proposal, waive its right to raise any legal or 

policy objection to any future ARB proposed or final regulatory action, regardless 

of whether such future objections are the same or similar to those that Chrysler 

might be able to raise with respect to this proposal. 

Any agreement must be an overlay of the ZEV Program as proposed by ARB 

staff in the ISOR. Aside from the particular additional and reduced requirements 

in such an agreement, the principles upon which those requirements were 

developed, and additional flexibilities offered, ZEV provisions such as credit 

banking, vehicle credit values, etc. must continue to form the underlying structure 

of Section 177 state compliance. 

Any agreement must provide equal opportunity (and risk) to all manufacturers, 

regardless of compliance strategy. Of particular concern is ensuring that any 

ZEVs in excess of the early introduction credit requirement continue to receive 

the flexibility to utilize the travel provision through the 2017 model year including 

the use of traveled ZEV credits to cover compliance requirements in the TZEV, 

AT-PZEV, and PZEV categories. 

The agreement must be optional. Manufacturers must be able to make use of 

the provisions as proposed by staff in the ISOR and approved by the Board. If 

the agreement introduces additional compliance flexibilities, such as pooling of 

compliance provisions, these flexibilities should be extended to all manufacturers 

after the time period of the optional agreement. For example, a pooling provision 

should be extended to all manufacturers in the 2021 model year after all 

manufacturers are subject to the same requirements again. (Chrysler) 

Agency Response: It is expected that the Section 177 states adopting the ZEV 

regulation, as modified by this rulemaking, will adopt the language as written, and 

therefore “identicality” requirements will likely not be an issue. Additionally, the 

optional Section177 state compliance path is intended to work within the confines 

of the ZEV regulation, and only changes the provisions as noted in subdivisions 
67 

1962.1(d)(5)(E)3. and 1962.2(d)(5)(E)3. It is also the intent of the optional 

Section 177 state compliance path to allow manufacturers who wish to fulfill other 

portions of their requirement with credits from ZEVs to be able to do so, as 

allowed by subdivisions 1962.1(g)(6) and 1962.2(g)(6). Also, this is an optional 

compliance path for any IVM or LVM. The Section 177 state optional compliance 

path only applies through 2020 model year. Any flexibilities under this provision 

will not continue in the ZEV regulation until a review of the effects of such 

flexibilities is brought before the Board and reconsidered. 

91. Comment: LEV III developed the CA and 177 state pool starting in 2018 model 

year to adapt to each state’s unique vehicle purchase patterns while requiring 

overall fleet compliance. ZEV 2.0 eliminates the travel provision in 2018 model 

year (in effect, pools the results of all states) which returns ZEV compliance to a 

state by state basis. Considering the lack of electric vehicle infrastructure 

development, this could force electric vehicle sales in states unprepared for 

electric vehicles. On January 24, 2012, Tom Cackette notified our staff that the 

LVM OEMs had concluded their negotiations for an Optional Compliance Path to 

creating two compliance pools outside of California. While Mitsubishi Motors 

generally agrees to the concept, none of the details for iLVM/IVM compliance 

were discussed with the affected OEMs [original equipment manufacturers]. 

ARB, 177 and iLVM/IVM OEM [original equipment manufacturers] staff should 

work to establish specific details to ensure iLVM/IVMs may participate in this 

Optional Compliance Path. (Mitsubishi, 45-Comment 76) (Mitsubishi, Oral 

Comment, Patterson) 

Agency Response: IVMs may participate in the optional Section 177 state 

compliance path. IVMs have requirements in the Section 177 states, and it is 

appropriate for them to participate in such a program. However, ILVMs have no 

requirement in the Section 177 states but are allowed to bank all credits 

generated in those states for future compliance. ILVMs have no ZEV 

requirement in any state, which is sufficient compliance flexibility in the Section 

177 states. 

P. GHG-ZEV Over Compliance 

92. Comment: ARB received several comments asking the Board to reject the ZEVGHG over-compliance provision, which was also referred to as a loophole for 

some manufacturers because the provision sends the wrong signal to 

manufacturers, it provides unequal treatment of manufacturers, and the provision 

does not achieve the objective of the ZEV regulation. ARB also received several 

objections and opposition to the ZEV-GHG over-compliance provision. (CCA, 
68 

CEERT, CODA, CalETC, Chrysler, EIN, Fisker, Ford, Form Letter #5, Form 

Letter #6, GM, Mercedes, NRDC, PIA, Tator, Tesla) 

Agency Response: The Board approved the GHG-ZEV over-compliance 

provision in Resolution 12-11, standing by its commitment made in a July 28, 

2011, letter to the U.S. EPA and National Highway Traffic Safety Administration 

(NHTSA). However, the Board did strengthen the provision by requiring 

manufacturers to commit to using such a provision by December 31, 2016, and 

requiring upstream emissions from ZEVs to be included in calculating a 

manufacturer’s GHG-ZEV over-compliance credits. 

93. Comment: ARB received several comments in support of the ZEV-GHG overcompliance provision, urging the Board to adopt such a provision that provides 

manufacturers flexibility. (Global, Honda, Hyundai, Mazda, NY) 

Agency Response: ARB appreciates support for the GHG-ZEV over-compliance 

provision. The Board approved the GHG-ZEV over-compliance provision in 

Resolution 12-11, standing by its commitment made in a July 28, 2011, letter to 

U.S. EPA and NHTSA. 

94. Comment: ARB received requests to require manufacturers to account for the 

upstream emissions for any ZEVs manufacturers use in determining their fleet‐

average GHG emissions average for GHG over‐compliance in 2018‐2021MYs. 

(CEERT, EIN, ICCT, UCS) 

Agency Response: Comment noted. The Board strengthened the GHG-ZEV 

over-compliance provision by requiring manufacturers to include upstream 

emissions in their calculation of over-compliance with the GHG fleet standard. 

ARB will refine the language in a subsequent rulemaking when harmonizing with 

the federal GHG standards and ensure such emissions are counted. 

95. Comment: ARB received requests to limit or place a cap on the participation 

under the ZEV-GHG over-compliance provision. ARB received specific requests 

on the appropriate percentage cap for the industry, between 10 percent and 50 

percent. (ALAC, CCA, CEERT, CODA, EIN, ICCT, NRDC, UCS) 

Agency Response: The Board approved the GHG-ZEV over-compliance 

provision in Resolution 12-1, standing by its commitment made in a July 28, 2011, 

letter to U.S. EPA and NHTSA, and did not place a cap on the number of 

manufacturers allowed to participate in this provision. The Board received many 
69 

comments in opposition to this proposal asserting such a provision creates an 

unfair playing field between regulated manufacturers. Such a cap could 

potentially create an unfair playing field by only allowing some manufacturers to 

participate in the provision and prohibiting other manufacturers, and would create 

administrative challenges. However, the Board strengthened the provision by 

requiring manufacturers to commit to using such a provision by December 31, 

2016, and requiring upstream emissions to be included in calculating a 

manufacturer’s over-compliance credits. 

96. Comment: ARB received requests that the Board increase the GHG fleet 

average over-compliance requirement from two grams per mile to between four 

and five grams per mile. (ALAC, CCA, CEERT, EIN, UCS) 

Agency Response: The Board approved the GHG-ZEV over-compliance 

provision in Resolution 12-11, standing by its commitment made in the July 28, 

2011, commitment letter to the U.S. EPA and NHTSA, and did not increase the 

threshold over what was proposed in the ISOR. Due to caps placed on the 

amount of GHG-ZEV over-compliance credit allowed to be used towards 

compliance in one model year, and not allowing any GHG-ZEV over-compliance 

credits to be carried forward to the next model year, increasing the threshold 

beyond two grams per mile would potentially generate more credits that would be 

able to be used in any year towards meeting ZEV requirements. However, the 

Board strengthened the provision by requiring manufacturers to commit to using 

such a provision by December 31, 2016, and requiring upstream emissions to be 

included in calculating a manufacturer’s over-compliance credits. 

97. Comment: ARB received requests to clarify the intent of the ZEV-GHG overcompliance provision to be temporary and to not represent an inherent link 

between the ZEV program and national GHG program. (EIN, UCS) 

Agency Response: The ISOR and commitment letter to the U.S. EPA and 

NHTSA, dated July 28, 2011, makes it very clear that this provision would be 

limited to 2018 through 2021 model years as is now specified in the regulatory 

text. 

98. Comment: Absent elimination of the GHG-over compliance, the following actions 

can help limit the losses to the ZEV program including monitoring the provision 

over 2014 to 2025 model year, and report every two years back to the Board on 

the number of manufacturers intending to participate, their market share, and the 

number of ZEV or TZEV vehicle losses for the program. (EIN) 
70 

The combination of the use of built-in staff compliance credits and GHG ZEV 

over-compliance credit provisions seem to have a significant impact on the 

number of ZEV vehicles that will be deployed in California in the years 2018 

through 2021. In reviewing this provision, we have some concerns that the 

combination of both of these credit mechanisms may reduce the number of ZEVs 

deployed in California. While ARB staff has assured us that there is only a 

remote chance that a significant number of auto manufacturers will avail 

themselves of this option, we request that your Board consider including a 

provision that would give you an option to review and assess the impacts of 

these credits on the ZEV regulation of deployment targets going forward. 

(BAAQMD) 

If the GHG-ZEV over-compliance provision is not eliminated, we recommend that 

the ARB monitor the use of the provision and report back on the losses in ZEVs 

and TZEVs due to the provision. (UCS) 

Agency Response: Comment noted. The Board directed in Resolution 12-11 

staff to report back every two years on the manufacturers’ use of the GHG-ZEV 

over-compliance provision, and on avoided ZEVs and TZEVs in California. 

99. Comment: If the GHG-ZEV over-compliance provision is not eliminated, we 

recommend that the ARB reduce the uncertainty of the program by moving up 

the date for signing on to December 31, 2016 instead of May 1, 2018, which is 

after the program would be generating credits. (UCS) 

Agency Response: Comment noted. The Board strengthened the overcompliance provision by requiring manufacturers to commit to using such a 

provision by December 31, 2016. 

100. Comment: We agree with the proposal to require a commitment from OEMs 

[original equipment manufacturer] to opt in for all four years for the overcompliance provision, but encourage CARB to set an earlier date for OEMs 

[original equipment manufacturers] to notify CARB of opting in. A commitment 

from OEMs [original equipment manufacturers] to exceed regulatory standards 

would reinforce the technical feasibility of the standards during the mid-term 

review of the federal GHG/fuel economy program. Thus it should be required in 

2017, in time for consideration in the mid-term review due April 1, 2018. The 

proposed regulation sets an opt-in notification date of May 2018 which is after 

the mid-term review is concluded. (ICCT) 
71 

Agency Response: See response to Comment 99. 

101. Comment: We understand that CARB staff intends to prohibit the use of hybrid 

truck and EV [electric vehicle] “supercredits” to meet the 2 g/mile 

“overcompliance” benchmark required to participate in overcompliance. We 

agree that these prohibitions should be included in the final regulation even for 

manufacturers that otherwise comply with the federal GHG program in lieu of 

the California GHG program. We note that federal regulation language may be 

needed to recognize cancellation of federal PV [plug-vehicle] GHG credits used 

for “overcompliance”, as it is unclear whether CARB would have binding 

authority to cancel federal credits. (ICCT) 

Agency Response: Comment noted. ARB appreciates support for such 

restrictions placed on this GHG-ZEV over-compliance provision. ARB is 

committed to ensuring extra credits earned for PHEVs and BEVs will not be 

used in calculating manufacturer’s over-compliance with the GHG regulation, 

and will refine the language as needed in a subsequent rulemaking when 

harmonizing with the federal GHG standards. 

102. Comment: In its Letter of Commitment dated July 28, 2011, ARB committed "to 

propose that its revised ZEV program for the 2018-2021 MYs [model years] 

include a provision providing that over-compliance with the federal GHG 

standards in the prior model year may be used to reduce in part a 

manufacturer's ZEV obligation in the next model year." As we discussed during 

our meeting, the Alliance of Automobile Manufacturers opposes this proposal. 

By offsetting the number of ZEVs based on GHG performance, the proposed 

change would reduce the number of ZEVs in California and those states that 

have adopted California's ZEV regulations. To our way of thinking, this is 

inconsistent with ARB's long-held position that a "critical mass" is needed for 

ZEVs to become cost-effective, viable technologies. If ARB truly believes that 

the number of mandated ZEV s should be lower-a view that our members 

would share-the appropriate response would be to reduce the mandated ZEV 

volumes accordingly, not to allow a subset of manufacturers to reduce their 

volumes based on their status under a completely different program. It is 

critical that the burden of the ZEV mandate be borne equally by all "largevolume" manufacturers as defined in California's regulations. In as much, as 

this proposal would allow certain manufacturers to eliminate a significant 

portion of their ZEV requirements, it would undermine this level playing field, 

giving such manufacturers a significant competitive advantage. As an aside, 

allowing credits to be transferred out of the Single National Program and into 
72 

ARB's ZEV program is also likely to reduce the GHG credits available for 

purchase, thereby reducing the flexibility of the Federal GHG standards for MYs 

[model years] 2018-2021. (Alliance) 

Agency Response: The Board approved the GHG ZEV over compliance 

provision in Resolution 12-11, standing by its commitment made in a July 28, 

2011, letter to the U.S. EPA and NHTSA. ARB concluded that this provision 

was valuable to both the ZEV program and the GHG program as it results in a 

net GHG emissions benefit and it was one element needed to secure support 

for the national GHG standards. ARB recognizes that such a provision could 

result in fewer ZEVs during the 2018 through 2021 model year timeframe. ARB 

does not expect all manufacturers to use this provision and it is a 

manufacturer’s choice to participate in such a provision. Due to the nature of 

the ZEV regulation, all manufacturers use different provisions to meet their 

requirements. Some manufacturers may choose to purchase credits at a lesser 

cost rather than building their own ZEV technology. The GHG fleet standards 

do not require manufacturers to sell additional GHG credits to other 

manufacturers. It is more probable that any additional GHG credits would be 

banked and subsequently used by the manufacturer earning the credits. 

Therefore, a manufacturer using this provision would be choosing to reduce its 

own flexibility in meeting the GHG standards, just as it is a manufacturer’s 

choice to make extra GHG credits available to other manufacturers. 

103. Comment: We do ask for the elimination or the significant modification to the 

GHG-ZEV over-compliance provision. This provision creates a strong 

economic incentive for car companies to avoid selling up to 40 percent of their 

electric car requirements from 2018 to 2021 in return for over-complying with 

greenhouse gas standards by just one percent, a 40-to-1 exchange rate. But 

let me look at it in terms of dollars and cents. Auto companies using this 

provision would have to invest just 2 to $3,000 into off-the-shelf technology they 

were going to do anyway to avoid selling 10 to $15,000 worth of truly advanced 

technology. That's not a good deal for California, especially in critical years of 

the program for infrastructure development and market ramp-up for battery 

electric and fuel cell vehicles. (UCS) 

Agency Response: The Board approved the GHG-ZEV over-compliance 

provision in Resolution 12-11, standing by its commitment made in a July 28, 

2011, letter to U.S. EPA and NHTSA. ARB recognizes that such a provision 

could result in fewer ZEVs during the 2018 through 2021 model year timeframe. 

However, the Board did strengthen the provision by requiring manufacturers to 
73 

commit to using such a provision by December 31, 2016, and requiring 

upstream emissions to be included in calculating a manufacturer’s overcompliance credits. 

104. Comment: While Chrysler supports the principles of the ZEV Program, 

Chrysler takes exception with the provision that would give a select group of 

manufacturers the opportunity to avoid up to half of their ZEV obligation as a 

result of over compliance with the GHG provisions of the federal or California 

program. Accordingly, this provision should be removed. Chrysler strongly 

believes that the GHG over-compliance ZEV credit provision is inconsistent 

with the Board’s directive to move zero emission drive technology to 

commercialization, undermines the incremental air quality benefit that is lost 

with the avoided zero emission drive vehicles, creates an un-level playing field 

by providing a select group of manufacturers a significantly lower cost of 

compliance, may face considerable legal obstacles, and slows down the much 

needed market acceptance of electric drive vehicles. 

Given the structure of the program and these apparent emissions impacts, 

there may be legal obstacles to California’s adoption of the GHG OverCompliance Provision proposal. First, the proposed GHG Over-Compliance 

Provision may be preempted under Section 209 of the Clean Air Act because (1) 

the proposal could require California to obtain a new waiver under Section 

209(b) of the Clean Air Act for its greenhouse gas standards -- including the 

ZEV program and; (2) those standards could be ineligible for a waiver because 

they would not be consistent with federal greenhouse gas standards under 

Section 209(b)(1)(C). Furthermore, to the extent that California has relied on 

ROG + NOx [reactive organic gases plus oxides of nitrogen] reductions from 

the ZEV program in any Air Quality Management District (AQMD) state 

implementation plan for ozone, these revisions would relax the ZEV program 

and would not be allowed absent EPA [United States Environmental Protection 

Agency] approval of a revised SIP [State Implementation Plan] accounting for 

the resulting ROG + NOx [reactive organic gases plus oxides of nitrogen] 

increase. 

With respect to preemption, Section 209(a) preempts California from adopting 

or enforcing standards related to emissions from new motor vehicles absent a 

waiver from EPA under Section 209(b). EPA [United States Environmental 

Protection Agency] may grant a waiver under Section 209(b) solely where 

California determines (and the determination is not arbitrary and capricious) 

that its standards will be, in the aggregate, at least as protective of public health 
74 

and welfare as federal standards, and the standards are necessary to meet 

compelling and extraordinary conditions. Because California’s proposal would 

relax the ZEV program and thereby may increase ROG + NOx [reactive organic 

gases plus oxides of nitrogen] emissions, compared to the ZEV program for 

which EPA [United States Environmental Protection Agency] granted a waiver, 

EPA [United States Environmental Protection Agency] may be required to 

reevaluate whether the ZEV program -- and it lower ROG + NOx [reactive 

organic gases plus oxides of nitrogen] benefits as revised -- is still required to 

meet compelling and extraordinary conditions, and that the program would not 

fall within a “within the scope” waiver exception. 

In addition, the California greenhouse gas standards (including the ZEV 

requirements), and accompanying enforcement procedures must be consistent 

with Section 202(a) (EPA’s [United States Environmental Protection Agency] 

own greenhouse gas standards). Section 202(a)(3)(A) of the Clean Air Act 

requires EPA [United States Environmental Protection Agency] to establish 

emission standards that “reflect the greatest degree of emission reduction 

achievable through the application of technology which [EPA] [United States 

Environmental Protection Agency] determines will be available for the model 

year to which such standards apply, giving appropriate consideration to cost, 

energy, and safety factors associated with the application of such technology.” 

California’s proposal allows over-compliance with the national GHG standards 

to reduce ZEV obligations. This option undermines EPA’s [United States 

Environmental Protection Agency] GHG standards. This is because the credits 

retired from the national program to reduce ZEV obligations would, in fact, be 

retired, and accordingly not be applied to offsetting under-compliance in the 

federal program. As a result, we would expect overall GHG emissions 

necessarily to be lower than that which would occur absent the California ZEV 

provision. Removing over-compliance credits from the federal GHG program 

makes those credits unavailable in the federal GHG “emissions credit market” 

for automaker’s use in complying with the federal standards. This makes 

compliance more difficult because there are fewer credits to use; as such this 

effectively lowers the passenger car and light duty truck curves. Because EPA 

[United States Environmental Protection Agency] must establish federal 

standards reflecting the greatest degree of emission reduction achievable, this 

California ZEV option -- that makes federal compliance more difficult -- 

interferes with and is inconsistent with the federal standards. Accordingly, the 

California ZEV option would be ineligible for a Clean Air Act section 209 waiver, 

and preempted entirely. 
75 

In addition to these potential preemption issues, to the extent that California 

has anticipated that the ZEV program will achieve ROG + NOx [reactive 

organic gases plus oxides of nitrogen] reductions, it is possible that California 

AQMDs responsible for achieving compliance with the ozone NAAQS [National 

Ambient Air Quality Standards] (and possibly other criteria pollutants) have 

relied on the ZEV program in their State Implementation Plans (SIPs) for 

attainment. The California proposal to allow federal GHG over-compliance to 

satisfy ZEV obligations would reduce the ROG + NOx [reactive organic gases 

plus oxides of nitrogen] benefit (as discussed above). If EPA [United States 

Environmental Protection Agency] has approved AQMD SIPs based on 

assumed ROG + NOx [reactive organic gases plus oxides of nitrogen] 

reductions that would not occur due to the GHG over-compliance option, that 

change cannot be made without approval of a revised SIP that still shows 

attainment. 

If adopted, the Greenhouse Gas Over-Compliance provision will also put 

manufacturers who still need to comply with the full ZEV requirement at a 

competitive disadvantage, causing serious financial harm, compared to those 

manufacturers able to take advantage of the provision with little or no additional 

investment. 

Therefore, Chrysler strongly urges the Board to not adopt the greenhouse gas 

over-compliance ZEV credit provision. (Chrysler) 

Agency Response: At the January 27, 2012, hearing, the Board adopted the 

ZEV regulation, and affirmed its commitment to the GHG-ZEV over-compliance 

provision. The Board stated that this provision recognizes that “we're (meaning 

ARB, manufacturers, and other stakeholders) all in this together in terms of 

trying to get to the ultimate of the cleanest and most efficient and most 

advanced cars possible and that people are on different paths. They're 

(manufacturers) not all going to do it the same way, as we've (ARB) been 

saying over and over again. There are different mixes.” (January 27, 2012 

Transcript pg 26) The GHG-ZEV over-compliance provision is open to all 

manufacturers, and does not include limitations on the number of 

manufacturers that may participate in the provision. 

There is no federal equivalent to the California ZEV regulation. Therefore the 

ZEV regulation will be able to obtain a waiver under Section 202 of the Clean 

Air Act because it is at least as protective of public health and welfare as 

federal standards. In addition a U.S. EPA review for “inconsistency” within the 
76 

Section 202 context looks to issues of technological feasibility and lead time, 

not to consistency between federal and California standards. 

The U.S. EPA (and ARB) curves are set at levels deemed achievable through 

available, cost effective technology. Although credit trading is available to 

manufacturers, it is not assumed that manufacturers would make their extra 

credits available for trading, nor is it assumed in setting the GHG standards at 

the federal level. 

Because this provision is not required, it will not necessarily affect GHG or 

criteria emissions in California. Additionally, ARB does not depend on emission 

benefits from the ZEV regulation to meet its State Implementation Plan (SIP) 

requirements. ARB uses emission reductions from the LEV fleet standards to 

account for the emissions reductions expected from the light-duty vehicle fleet. 

ZEVs are counted toward a manufacturer’s LEV compliance, and therefore are 

adequately accounted for in meeting California’s SIP requirements. 

ARB does not expect all manufacturers to use this provision and it is a 

manufacturer’s choice to participate in such a provision. Due to the nature of 

the ZEV regulation, all manufacturers use different provisions to meet their 

requirements. Some manufacturers may choose to purchase credits at a lesser 

cost than building their own ZEV technology. The GHG fleet standards do not 

require manufacturers to sell additional GHG credits to other manufacturers. It 

is more probable that any additional GHG credits would be banked and 

subsequently used by the manufacturer earning the credits. Therefore, a 

manufacturer using this provision would be choosing to reduce its own flexibility 

in meeting the GHG standards, just as it is a manufacturer’s choice to make 

extra GHG credits available to other manufacturers. 

 

Q. Credit and Requirement Calculations 

105. Comment: It is our understanding that credits are calculated by subtracting the 

ZEV requirement from the ZEV credits that a manufacturer has earned for 

vehicles produced and delivered for sale. We believe the language needs to be 

clarified in subdivision 1962.1 and subdivision 1962.2. (LVM) 

Agency Response: The language as released in the ISOR is correct, and was 

adopted by the Board without modification. ARB does not believe clarification 

is needed at this time. 
77 

106. Comment: “Conventional rounding” should be defined. U.S. EPA and other 

sections of the CCR, reference the rounding-off method specified in ASTM 

[American Society for Testing and Materials] E29, Standard Practice for Using 

Significant Digits in Test Data to Determine Conformance with Specifications. 

We recommend that the same rounding convention be used in the ZEV 

regulation. (LVM) 

Agency Response: Comment noted. The Board adopted the final 

modifications to ZEV regulation, including the conventional rounding definition 

at the March 22, 2012, hearing. The definition recommended by the 

commenter is more appropriate for certification data when dealing with vehicle 

emissions rather than credits, which only go to the third significant digit. 

107. Comment: We believe that an LDT2 ZEV offsets the air quality benefit of the 

LDT2 fleet average NMOG; therefore it is appropriate that the LDT2 fleet 

average NMOG be used in the ZEV NMOG credit calculation. Because light 

duty trucks are larger and heavier than passenger cars, additional energy 

storage is needed on these vehicles to achieve the same range. Using the 

higher LDT2 fleet average to calculate credit based on range, will help equalize 

the cost per credit for heavier light duty trucks compared to passenger vehicles. 

This could encourage manufacturers to design zero emission technology into a 

broader range of vehicles. Furthermore, we do not believe that CARB should 

be making changes retroactively (2009 – 2014 MY [model year]) and should 

provide lead time. Manufacturers plan for compliance years ahead and 

changes that negatively impact those plans should allow for adequate lead time 

for manufacturers to adjust their plans, which may require new supplier 

agreements, increasing capacity constraints, or even new vehicles. (LVM) 

Agency Response: It was never the intent of ARB to allow manufacturers to 

use different NMOG fleet averages when calculating credits earned by various 

vehicle classes. This was brought to ARBs attention in 2009, and ARB 

released a letter dated December 6, 20101

, stating that this was allowed, but 

would be changed for 2012 model year as soon as possible. A vehicle’s credit 

under the ZEV regulation does not necessarily reflect its relative emission 

benefit. A LDT2 PZEV earning more than a PC PZEV is counter-intuitive, 

because both vehicles must meet the same SULEV certification standard. 

108. Comment: We believe that the proposed criteria for applying to the Executive 

Officer to use the current model year method are too stringent. For example a 

 

1

 MSCD Mail-Out #10-55 (December 6, 2010) http://www.arb.ca.gov/msprog/mailouts/mouts_10.htm 
78 

40 percent decline in sales is worse than what was evidenced in the recent 

recession, when it was clearly recognized that relief was needed. What 

happens if there is a 20 percent decline one year and a 30 percent decline the 

next? If all LVMs but one qualify for current model year, and that LVM sales 

declined by 39 percent, this would create a competitive disadvantage for that 

LVM. Staff’s proposal provides two less years of lead time to manufacturers for 

planning purposes. In fact, this modification will result in manufacturers not 

knowing their production requirements with certainty until after the beginning of 

the model year in which they must produce the ZEVs. Also problematic is the 

constraint that qualification must be based on comparison to the prior model 

year. 

The LVMs recommend that the threshold to qualify for the same-year method 

either be removed (as in current regulation) or, if needed to limit use of this 

flexibility, that the threshold be set at 15 percent sales decline as compared to 

the production determined under the prior-year average method. Comparing 

same-year results to prior year average results corrects the concern noted in 

which a manufacturer experiences a multi-year decline exceeding the threshold, 

but would not otherwise qualify if the same-year production was only compared 

to the single prior year. (Chrysler, LVM) 

Agency Response: Comment noted. After further analyzing manufacturers’ 

sales data from periods in which there were significant drops in vehicle sales, 

ARB changed the Executive Officer criteria from 40 percent to 30 percent. 

Additionally, it is not appropriate to compare single model year data with a 

three-year average of data. When making Executive Officer determinations, it 

is best to compare similar data to ensure an unbiased decision is made. A drop 

in sales can happen gradually, but does not have the same effect as a dramatic 

drop in sales from one year to the next, which was the purpose of this 

Executive Officer discretion. 

109. Comment: The requirement to apply to the Executive Officer before using the 

same-year method interjects a subjective decision into what would otherwise be 

an objective, data driven, process. The LVMs recommend that this restriction 

be removed. (LVM) 

Agency Response: The default method is based on a manufacturer’s second, 

third, and fourth year back sales average. A flexibility, which was requested by 

manufacturers, was included to allow a manufacturer to use a same year 

average when a significant decrease in sales occurred between two model 
79 

years due to factors outside of the manufacturer’s control. Therefore, the 

Board adopted a provision by which the Executive Officer will make an 

objective determination of whether or not to allow use of the same-year 

calculation method. The Executive Officer discretion criteria needs to be data 

based as to not be biased in any way when a decision is made. It is 

appropriate for the Executive Officer discretion, as written, to be included in the 

regulation. 

R. Manufacturer Size Definitions 

110. Comment: Support for lowering the threshold for the definition of a LVM in 

order to increase the number of ZEV offerings and ensure a level playing field 

among all the major vehicle manufacturers. (Tesla) 

Agency Response: ARB appreciates support for modified size definitions. This 

change was needed to ensure that major manufacturers compete on a level 

playing field and to assure a variety of ZEVs are available to the consumer. 

111. Comment: VW supports the lead time for IVMs becoming subject to LVM 

requirements starting in 2018. (VW) 

Agency Response: ARB appreciates support for the lead time allowed to IVMs 

subject to LVM requirements due to modification to the size definitions. 

112. Comment: JLR would like to request reconsideration of, and further discussion 

regarding, the proposed lead times for transition between IVM and LVM 

definition. JLR considers the lead time provisions for redefinition of an IVM to 

LVM to be insufficient to initiate and launch the necessary new vehicle 

programs to meet the LVM category requirements. JLR requests consideration 

of a revision of the wording and concept as follows: “A manufacturer with three 

consecutive averages over a size threshold will be subject to the stepped-up 

requirement in the fourth model year following the last year of the third 

consecutive threshold.” This proposed lead time would give sufficient lead time 

to initiate and launch the necessary new vehicle programs to meet the LVM 

category requirements. (JLR) 

Agency Response: Staff sought a simpler way to transition manufacturers in 

and out of size definitions. Allowing lead time after a manufacturer crosses a 

threshold in one average is confusing, and is not clear if the manufacturer 

would still be subject if the manufacturer fell below the threshold in any 

subsequent average during that lead time. Three consecutive averages, or two 
80 

model years, above either the IVM or LVM threshold will be sufficient in proving 

a manufacturer’s relative size, especially when these modifications are being 

made to the regulation in 2012. Additionally, the new lead time is in line with 

the other fleet standard regulations (LEV III criteria pollutant and GHG). 

113. Comment: By any measure – such as market share in California, the U.S., or 

global markets; annual revenue and profitability; global production; number of 

employees; annual R&D [research and development] investment; resources; or 

market capitalization – Mazda is NOT a Large Volume Manufacturer. Mazda is 

very similar to the remaining IVMs and, we respectfully urge, should be similarly 

defined as an IVM. Mazda’s available resources to develop the necessary 

vehicles and technology in the timeframe envisioned are much more limited 

than the current-and newly-defined LVM’s some of which have been working to 

reach this point for 20 years. We do not foresee that our efforts to develop 

electric hybrid and BEVs will enable us to comply with the stringent ZEV 

requirements that are proposed to start in the 2018 model year if we are 

categorized as an LVM. In addition to the significant level of resources required 

to develop advanced technologies for electric vehicles, it is necessary that 

vehicles be not only produced, but sold in numbers sufficient to meet the 

annual credit requirements. However, for companies with limited financial and 

research and development resources, such as Mazda, marketing such vehicles 

is another significant burden. Mazda is at a distinct disadvantage to many of 

our large competitors. Mazda vies the modest flexibilities afforded the IVMs as 

necessary to us in order to achieve compliance with the new requirements. We 

believe that the rate of technology development envisioned by the regulations 

should not exceed individual companies’ abilities to develop, implement and 

market the technologies. We respectfully request that ARB review the 

proposed changes to the LVM definition, specifically as it applies to Mazda. 

We suggest the following changes to the regulatory language for the IVM and 

LVM definitions: 

A manufacturer is classified as an IVM if it has average annual California 

sales for the three previous consecutive model years; 

Between 4,501 and 20,000 per year, or 

Between 20,001 and 40,000 per year and average annual global 

sales of less than1.8 million vehicles per calendar year. 

A manufacturer is classified as an LVM if it has average annual California 

sales for the three previous consecutive model years; 

Exceeding 40,000 per year, or 
81 

Exceeding 20,000 per year and average annual global sales 

exceeding 1.8 million vehicles per calendar year. 

(Mazda) 

Agency Response: Comment noted. The Board adopted staff’s size definitions 

as proposed in the ISOR. However, the Board directed staff to monitor how the 

modification to the size definitions affects manufacturers, especially those 

without the research and development budget necessary to develop ZEV 

technology. Staff will report back to the Board if such a situation arises. 

114. Comment: Staff has proposed new language in the ZEV regulation proposal 

that states whenever an overlap in model years exists, the earlier model year 

takes precedent. This language is specifically applied to situations where a 

change of ownership for a company occurs. Since model years now span a 

wide range of time with both early introductions and extended model years, 

Volkswagen is concerned that the proposed language may result in additional 

unintended consequences and a model year determination could be made 

when the bulk of a manufacturer’s model year has changes to the newer year 

while a small fraction of vehicles are still being produced under the previous 

model year. We request that ARB strike this language and allow each 

manufacturer to be handled on a case by case basis. This gives flexibility to 

both ARB and each individual manufacturer to discuss model year strategy. 

(VW) 

Agency Response: ARB strives to decrease ambiguities that exist in its 

regulations and treat manufacturers fairly. The issue regarding model year and 

ownership has come up numerous times, and it is important that the regulatory 

language be clear for such a situation. Allowing Executive Officer discretion, as 

suggested by the commenter, would not be appropriate in this situation. The 

language as adopted by the Board will provide for fair manufacturer treatment, 

regardless of special circumstances. 

115. Comment: Within the limited time remaining where a four year versus six year 

lead time could apply to company mergers before the 2018 changes are 

enforces, it is possible an IVM may acquire a SVM that has no ZEV 

development program. In this situation the small company would not 

accelerate the development of the larger company’s ZEV compliance plan. VW 

fails to see the technical arguments that support why two smaller companies by 

California definition who do not currently have a ZEV program should be able to 

bring ZEV vehicles to market faster once they are combined. Given the 
82 

backstop of the 2018 start of new definitions and the fact that this regulation will 

not be finalized before the start of the 2013 model year, VW does not see the 

need for continued application of the four year clause. (VW) 

Agency Response: Comment noted. The Board directed staff to correct 

inconsistencies that could bring a manufacturer in under more stringent 

requirements, dependent on how a manufacturer increased in vehicle sales 

volume. The regulation now reflects that if a manufacturer increases in size 

independently or gains ownership of another manufacturer, the manufacturer 

would have a 5 year lead time and be subject in the sixth model year, or in 

2018 model year, which occurs first. 

116. Comment: Mitsubishi Motors was assured the “new” IVM classification would 

have similar requirements to the previous iLVM since the remaining companies 

were mostly iLVMs. This classification is small; ARB Staff’s analysis found all 

“new” IVMs combined sales volume is approximately 3 percent of annual 

California sales and barely affects overall ZEV sales goals. In fact, the 

proposed “ZEV offsets based on over-compliance with the federal GHG 

standards” would have much, much larger effects on ZEV sales volumes than 

all IVMs combined. Mitsubishi Motors and other IVMs met with ARB Staff 

numerous times to discuss a compromise between the current iLVM standard -- 

no ZEV requirement -- and the new LVM standards. In the fall of 2011, ARB 

Staff disclosed their decision -- without sufficient justification -- ending the iLVM 

classification (ISOR 2.2.1, page 27). These the “new” IVM requirements are 

identical to LVM requirements with one exception (“Flexibility”) – IVMs may 

comply with credits generated from TZEVs. 

Unfortunately, this is not a realistic flexibility for two reasons: 1) TZEVs, by 

definition, generate less credit than BEVs or FCVs and therefore IVMs would 

need much larger fleets of TZEVs than BEVs. For example, if overall ZEV 

credit requirement is 12 percent (2021MY), then nearly 24 percent IVM vehicles 

sold would need to be TZEVs to comply. Historically for ZEV compliance, IVMs 

maintained PZEV percentages much higher than LVMs– this would create a 

similar discontinuity for IVMs with TZEVs; and 2) TZEVs do not qualify for the 

travel provision. Therefore, IVMs would be required to comply with ZEV 

Mandate with separate TZEV fleets in CA and Section 177 States – this 

increases the fleet required for compliance significantly. 

Possible Solutions: 1) Return to former iLVM standard – no ZEV Mandate, or 

more appropriately, 2) create a new IVM specific program – for example: allow 
83 

IVMs to comply with the same PERCENTAGE (not credit) requirement of 

TZEVs; and allow IVMs to Travel TZEVs through 2017 model year. 

Most importantly, ARB staff needs to consider an appropriately designed 

program with input from IVM OEMs [original equipment manufacturer]. “One 

size DOES NOT fit all.” (Mitsubishi) 

Agency Response: Requirements for IVMs in 2018 and subsequent model 

years are in line with current requirements for IVMs. Just as IVMs are allowed 

to produce PZEVs, which earn less credits than ZEVs, to fulfill their pre-model 

year 2018 requirements, staff is allowing IVMs in the post-2018 model year 

timeframe to fulfill their requirement with TZEV credits. IVMs are not required 

to produce TZEVs, and may fulfill their requirement with pure ZEV credits. 

Additionally, IVMs are currently allowed to comply in all Section 177 states with 

credits from PZEVs, and will be allowed to comply with credits from TZEVs 

starting in 2018 model year. Continuing the ILVM definition beyond 2018 

model year would not benefit all IVMs equally, as most manufacturers do not 

currently qualify under the ILVM definition. Flexibilities offered to IVMs go 

beyond the ability to fulfill their ZEV requirements with TZEV credits. For 2015 

through 2017 model years, IVMs are allowed to meet a lesser overall 

requirement. Additionally, IVMs are given a less stringent discount factor on 

their banked PZEV credits. In 2018 and 2019 model years, IVMs are also 

allowed to meet their entire requirement with discounted PZEV and AT PZEV 

credits. These flexibilities, including a six year lead time, should provide 

sufficient time for manufacturers to prepare for additional requirements 

beginning in 2018 model year. Additionally, ILVMs currently have the ultimate 

flexibility, as these manufacturers are not required to comply with the ZEV 

regulation in California or any Section 177 states. 

117. Comment: Under the California motor vehicle emissions program, a SVM 

receives certain flexibility in compliance with applicable regulations. The LEV 

III ISOR has proposed that compliance with the LEV III requirements would be 

deferred for SVMs until 2022 model year, during which time SVMs will have 

nationwide sale of 5,000 vehicles or less per year may petition ARB for relaxed 

emission standards. As noted in the ZEV ISOR, SVMs are not required to 

comply with the ZEV regulations, but they may generate, trade, and sell ZEV 

credits. Under 13 CCR § 1900(22) (sic), the definition of SVM includes an 

aggregation requirement that could exclude some manufacturers with very low 

volumes of sales due to their ownership relationship, including Ferrari. These 

manufacturers would thus be subject to the LEV III tailpipe and greenhouse gas 
84 

(GHG) standards and the ZEV regulations to the same extent as larger 

manufacturers, despite their reduced resources and decreased impact to 

criteria and GHG emissions. Therefore, Ferrari is proposing that ARB should 

include in the FSOR a revision to the definition of SVM in 13 CCR § 1900(22) 

(sic). Specifically Ferrari proposed that ARB adopt the operational 

independence criteria that are included in the Proposed Federal Rule. (FBH, 

FSF, Ferrari) 

Agency Response: The Board adopted the final modifications to section 1900 

at its March 22, 2012, hearing, including the modifications requested by the 

commenter. However, it is important to note that U.S. EPA did not include the 

aforementioned language in the regulatory language that was published with its 

Notice of Proposed Rulemaking (NPRM) for the 2017 through 2025 national 

greenhouse gas rule. Rather, this language was merely part of the pre-amble 

to the NPRM. In this pre-amble, U.S. EPA requested comments on the 

appropriateness of including this language in the final rule, but there was no 

commitment on the part of U.S. EPA to do so. 

S. Carry Forward and ZEV Deficit (Carry Back) Provisions 

118. Comment: While Toyota would prefer 2 year carry back from 2018 model year, 

Toyota appreciates the additional flexibility provided by Staff with the return of 

unlimited carry forward and does not object to the 1 year carry back provision. 

(Toyota) 

Support for allowing all manufacturers to earn, bank, and trade model year 

2012 and higher ZEV credits for compliance in later model years without 

artificial expiration limits. (Tesla) 

Agency Response: ARB appreciates support for modifications to the carry 

forward and ZEV deficit provisions. 

119. Comment: CODA proposes that the carry forward provisions be revised to 

incentivize only “cleaner” and “newer” technologies, such as pure ZEVs, while 

the existing limitations in the carry-forward provisions remain in place for older, 

advanced technologies with lower tier credits, i.e. SULEV, NEV, PZEV to allow 

the lower value credits to expire in accordance with current rules. The rules 

should be revised to encourage new clean technology innovations, such as 

pure ZEVs, to be brought to market. If the carry forward provision is removed 

across the board, as currently proposed, the ZEV mandate in the near-term 

model years would be substantially weakened or nullified, and related 
85 

investment and progression will slow down. It is important that the ARB provide 

regulatory certainty for companies, like CODA, who have invested in new 

technologies based, in part, in good faith that existing rules would remain 

substantially intact. (CODA) 

Agency Response: There has never been carry forward provisions for any 

credit categories other than pure ZEVs. Therefore it would be impossible for 

carry forward provisions to remain in place for PZEVs, AT PZEVs, TZEVs, and 

NEVs. 

120. Comment: Chrysler recommends that a credit generated under a given 

allowance be permitted to satisfy a debit generated under that allowance level 

or lower. Allowing these categories of credits to satisfy a prior year credit deficit 

generated in the same or lower compliance category would not degrade the air 

quality benefits that would have been derived by specific vehicle types and 

would require minimal or no additional tracking effort. (Chrysler) 

Agency Response: A deficit may only be incurred when a manufacturer has 

failed to meet a requirement. The only requirement is a manufacturer’s ZEV 

requirement. All other categories (PZEV, AT PZEV, and TZEV) are allowed to 

meet a manufacturer’s requirement, but none of those credit categories are 

required to be produced. Therefore, the only deficit a manufacturer can incur is 

a pure ZEV deficit. Additionally, in the 2008 rulemaking, language was 

specifically removed from subdivision 1962.1(g)(7)(A) that allowed PZEV 

credits to fulfill a manufacturer’s ZEV deficit. 

121. Comment: In clarifying the provisions for satisfying a ZEV credit deficit, staff 

has excluded range extended battery electric vehicles from satisfying a prior 

year deficit. Given that these vehicles can be used to partially satisfy minimum 

ZEV requirements, Chrysler recommends that credits generated by this vehicle 

type be allowed to satisfy a prior year ZEV credit deficit. (Chrysler) 

Agency Response: See response to Comment 120. 

122. Comment: In the future, manufacturers are likely to need more than one model 

year to make up a ZEV deficit. The ZEV requirements significantly increase 

beginning in the 2018 MY [model year] and a full-line manufacturer confronted 

with this significant increase in volume may need more time to react in face of 

an uncertain market. Chrysler recommends that ZEV Program credit carryback remain at two years or be extended to three years. (Chrysler) 
86 

Agency Response: In general, the 2018 and subsequent model year 

requirements are written to ensure ZEVs are placed in increasing numbers 

through model year 2025. The shortening of a manufacturer’s time to make up 

a deficit is in line with the overall direction of the 2018 and subsequent model 

years requirements. Additionally, staff eliminated the carry forward restriction 

for ZEVs after model year 2011, meaning manufacturers will be allowed to use 

credits earned in 2012 and subsequent model years towards meeting any 

future requirement. 

123. Comment: In regards to subdivision 1962.1(b)(1)(B)(1)(g), Carry-over of 

Excess Credits, the clause did not explain explicitly that the elimination of carryover limitations for MY2011 [model year 2011] and later as explained in the 

ISOR. (Chew) 

Agency Response: Subdivision 1962.1(b)(2)(B)1.g. falls under provisions for 

the alternative requirements, which are only available for LVMs from 2009 

through 2011 model years. Additionally, subdivisions 1962.1(g)(6)(B) and (C) 

clearly limits the carry forward provisions to model years 2009 through 2011. 

The language as modified in the ISOR is sufficiently clear that carry forward for 

ZEV credits only applies to those model years. 

T. Delivered for Sale and Placed in Service 

124. Comment: It is our understanding that a vehicle must be placed in a section 

177 state to get credit, but it is overly restrictive to require that the vehicle be 

placed in the same state as the vehicle was delivered, especially considering 

the geography and dealer trades in the Northeast. The proposal should be 

revised to allow credit for a vehicle that is placed in service in a state that 

adopted the ZEV regulation, even if it is not the same state in which the vehicle 

was produced and delivered for sale. (LVM) 

Constraining full ZEV credit to only vehicles which are placed in service in the 

same state in which they are delivered for sale introduces additional uncertainty 

for manufacturers with little to no positive benefit to ZEV Program goals. 

Chrysler recommends that this proposed change not be finalized. (Chrysler) 

Agency Response: Comment noted. ARB clarified the regulatory language to 

be less restrictive and allow manufacturers to earn both delivered for sale and 

placed in service credits for a ZEV, as long as the ZEV is delivered for sale in 

either California or a Section 177 state, and placed in service in California or a 
87 

Section 177 state, even if it is different from the state the vehicle was delivered 

to. This ensures that California and Section 177 states are receiving the 

vehicles required under those state’s regulations. Additionally, the language 

was clarified to specify that the total credit the vehicle will be earned in the state 

in which the ZEV is originally delivered for sale. Therefore a vehicle that ends 

up placed in service in California or a Section 177 state when the vehicle was 

never intended or delivered for sale in California or a Section 177 state does 

not receive either delivered for sale or placed in service credit. 

125. Comment: Under current regulation and unchanged in the ISOR, 

manufacturers cannot generate full credit for a ZEV unless it is placed in 

service. This requirement requires manufacturers and state regulators to track 

each vehicle registration and to compare motor vehicle records from multiple 

states. Even at the three percent minimum ZEV requirement level, this is a 

significant number of vehicles to track. Chrysler recommends simplifying the 

requirement to simply delivering the vehicle for sale. (Chrysler) 

Agency Response: For 2012 through 2017 model years when most ZEVs are 

in demonstration and pre-commercial levels, it is appropriate to require ZEVs to 

be delivered for sale and placed in service in order to receive full credit. 

Additionally, ZEVs are not required to be placed in service. Each ZEV 

delivered for sale earns one credit, and those credits may be used to satisfy a 

manufacturer’s entire requirement. Additional credits are earned for 

placement. In 2018 and subsequent model years, most vehicle types will not 

be required to be placed in service, with only NEVs, and FCVs required to be 

placed in service. This shift away from placed in service is in recognition of the 

increasing requirements starting in 2018 model year and the necessity of the 

vehicles to be leased or sold in order for the manufacturers to continue 

production. 

126. Comment: The ISOR also introduces a change limiting full credit to only 

vehicles which are placed in service before December 31 five calendar years 

after the model year. Although Chrysler expects few ZEVs (if any) will take 

over five years to sell, this seems to be an unnecessary additional constraint. 

Such a constraint implies that a ZEV which will generate the same number of 

zero emission miles regardless to when it is sold, is less valuable to state 

emission goals after an arbitrary period of time. Chrysler recommends that this 

proposed change not be finalized. (Chrysler) 
88 

Agency Response: ARB believes that five years is an appropriate amount of 

time to place a ZEV. There are very few ZEVs that are placed beyond this 

timeframe. However, ARB does believe that establishing a maximum time limit 

is also appropriate to prevent the unlikely situation where a manufacturer 

produces ZEVs never intended for consumers, just to be in compliance with the 

regulation. 

127. Comment: Allowing five years to place a ZEV may be too long and undermined 

the compliance efforts by the regulators. Most of the placed in service ZEV can 

be traced nine months after the end of the model year (as in the current 

regulation allows) from the state motor vehicle registration agencies. If they are 

not sold by the next three years, it would be difficult to imagine that the 

customers would prefer the older models. Concerns should be taken to prevent 

any stakeholders who deliberate (sic) do not submit on time. To allow for this 

length of time will disrupt the smooth flow of data collection and undue 

disruptions for late data later on. I would suggest that for those ZEV that had 

been placed in the model year, they should continue to submit the credits nine 

months after the model year ended. For those ZEV that are yet to be placed, a 

3 years extension would be sufficient. (Chew) 

Agency Response: See response to Comment 126. 

128. Comment: For a multiple state dealership that may sell across different states 

with or without the ZEV mandate, awarding “deliver for sale” credits to all ZEV 

vehicles placed through the chain can be misused. The only evidence may be 

from the delivery receipts or from that evidences from the Manufacturers 

Source of Origin. There may be only a portion of them that will eventually sold 

to the residents in the state and earn the “place in service” credits. The ratio of 

“deliver for sale” to “place in service” may have to be capped, e.g. at 1.2 before 

this provision is being abused. (Chew) 

Agency Response: Placing a cap on the ratio of vehicles delivered for sale to 

vehicles placed in service is unnecessary, especially when most ZEVs that 

have been delivered for sale have been placed in service. Additionally, in 2018 

and subsequent model years, most vehicle types will not be required to be 

placed in service, with only NEVs, and FCVs required to be placed in service. 

This shift away from placed in service is in recognition of the increasing 

requirements starting in 2018 model year and the necessity of the vehicles to 

be leased or sold in order for the manufacturers to continue production. 
89 

U. Discounted PZEV and AT PZEV Credits

129. Comment: Toyota supports the ability to convert excess PZEV/ATPZEV credits 

to TZEV even though the proposed discounting is overly severe. (Toyota) 

Agency Response: ARB appreciates the support for the ability to convert 

excess PZEV and AT PZEV credits to be used towards meeting the portion of a 

manufacturer’s requirement that may be met with TZEVs. 

130. Comment: The proposal includes a reduced discount rate of 75 percent versus 

93.25 percent for PZEVs and a lower requirement for IVMs in the 2015 through 

2017 model years (12 percent versus 14 percent%), in order to prepare IVMs 

for the transition into LVM status starting in 2018 model year. The same 

accommodation should be made for LVMs to prepare for the strong ramp up of 

ZEV volumes beginning in 2018 model year. (LVM) 

Agency Response: ARB is providing certain flexibilities to manufacturers who 

are faced with producing pure ZEVs for the first time starting in 2018 model 

year. Current LVMs have been allowed much flexibility during the course of the 

regulation, which have allowed them to build up banks of credits that can be 

used in future model years. It is not necessary to allow the LVMs flexibilities to 

significantly reduce their requirements, especially during a time when ZEVs are 

reaching pre-commercial levels for many manufacturers. Such flexibilities 

could slow down development and commercialization. 

131. Comment: In order to avoid any ambiguities concerning discounted credits, we 

recommend to ensure in the regulation text that neither banked ZEV credits nor 

banked Enhanced AT PZEV credits from model years 2017 and earlier will be 

discounted and may be used without any carry forward credit limitations. 

(BMW) 

Agency Response: The regulatory language modified in the ISOR clearly 

applies to banked PZEV and AT PZEV credits. It is not appropriate to add 

additional language to further clarify which credits are meant to be discounted 

and applied towards the portion of a manufacturer’s requirement that may be 

met with TZEVs. 

132. Comment: In regards to subdivision 1962.1(g)(2). Converting PZEV and AT 

PZEV Credits after Model Year 2017, I would support that same discount factor 

be applied for both LVM and IVM. How can you prevent a transfer of PZEV 
90 

balance credit from a LVM to a IVM and get a better value and then trade the 

credit back to LVM? (Chew) 

Agency Response: Comment noted. It is each manufacturer’s decision to 

trade or transfer credits based on a variety of reasons. The discount factor will 

be applied to a manufacturer’s PZEV and AT PZEV credits dependent on the 

manufacturer’s size in 2017 model year. If the converted PZEV and AT PZEV 

credits are traded or transferred in 2018 or any subsequent model year, the 

discount factor will not change based on the manufacturer’s size. 

133. Comment: Toyota believes the further limitation of these “converted” TZEV 

credits at 25 percent is overly restrictive. Toyota believes one way to address 

this would be to raise the limit on usage of converted credits to 50 percent from 

25 percent. (Toyota) 

Agency Response: ARB is being generous in allowing manufacturers to use 

converted credits from the PZEV and AT PZEV categories to meet any portion 

of their requirement that may be met with TZEVs. The regulation focuses much 

more on ZEVs and TZEVs becoming a more significant portion of a 

manufacturer’s new vehicle sales in California. Allowing PZEVs and AT PZEV 

credits to meet the portion of a manufacturer’s requirement that may be met 

with TZEVs was a way to allow manufacturers to use credits earned in good 

faith, without resulting in too many vehicle losses in the 2018 and subsequent 

model year timeframe. 

V. Transportation System Credits 

134. Comment: In regard to subdivision 1962.1(b)(2)(D)(4), Use of Additional 

Credits for Transportation Systems, I would propose adding additional ZEV 

types to minimize confusion: ‘Any additional credits for transportation systems 

generated from different categories of ZEVs in accordance with subdivision 

1962.1(g)(5)....” (Chew) 

Agency Response: Comment noted. ARB clarified that ZEVs, Type I.5x and 

Type IIx vehicles, and TZEVs are eligible for transportation system credits. 

135. Comment: I would suggest the elimination of additional credits for the 

transportation project obtained from AT PZEV and PZEV from 2012 and later, 

since it seems that no OEMs [original equipment manufacturer] have to 

participate directly for these vehicles. These vehicle technologies have been in 

the market for a long time and should be phased-out. (Chew) 
91 

Agency Response: In 2008, the Board approved modifications to the regulation 

to sunset transportation system credits for PZEVs and AT PZEVs after 2011 

model year. Transportation system credits for PZEVs and AT PZEVs are no 

longer available to manufacturers after 2011 model year. 

W. Test Procedures 

136. Comment: The hybrid test procedures need to be updated to reflect a common 

approach between EPA [United States Environmental Protection Agency] and 

CARB. EPA [United States Environmental Protection Agency] extensively 

refers to SAE J1711 test procedures. The J1711 test procedures are the result 

of many years of cooperative work between industry and government, which 

includes EPA [United States Environmental Protection Agency] and CARB. If 

this harmonization does not occur, there will be unnecessary additional test 

burdens on the industry as a result of duplication of testing and uncertainty 

concerning the certification requirements. (Volvo) 

“Zero Emissions Vehicles 2012”, appendix A-2 (“... TEST PROCEDURES FOR 

2009 THROUGH 2017 MODEL ZERO-EMISSION VEHICLES AND HYBRID 

ELECTRIC VEHICLES...”) and A-4 (“... TEST PROCEDURES FOR 2018 AND 

SUBSEQUENT MODEL ZERO-EMISSION VEHICLES AND HYBRID 

ELECTRIC VEHICLES...”), basically carry over the circa 2009+ emissions 

testing procedures. These test procedures need to be updated to reflect 

advances in hybrid vehicle electrical propulsion technology plus be harmonized 

with EPA’s [United States Environmental Protection Agency] recent update of 

hybrid vehicle test procedures in the 2011 Fuel Economy Label and Green 

House Gas rulemaking. EPA [United States Environmental Protection Agency] 

now extensively points to SAE J1711. The J1711 test procedures are the result 

of many years of cooperative work between industry and government, which 

included EPA [United States Environmental Protection Agency] and the ARB 

staff. A-2 & A-4 not being harmonized with EPA [United States Environmental 

Protection Agency] (and J1711) creates additional test burden for OEM’s by 

requiring duplication of testing and uncertainty as to the certification 

requirements. (Alliance) 

Agency Response: Comment noted. During the time of this rulemaking, the 

U.S. EPA had not finalized its hybrid vehicle test procedures. ARB will work 

with the U.S. EPA, and harmonize the test procedures where appropriate and 

necessary with the goal to relieve manufacturers of additional test burden. 
92 

137. Comment: In A-4 there is one new section G.12 “The Calculations of the 

Combined Green House Gas Regulatory Rating of Off-vehicle Charge Capable 

Hybrid Electric Vehicles” which has differences with respect to similar equations 

and algorithms in EPA’s [United States Environmental Protection Agency] Part 

600. These differences need to be analyzed further and harmonized where 

possible. (Alliance) 

Agency Response: Comment noted. ARB has modified the language to 

include new section G.12 to the Test Procedures for 2009 through 2017 Model 

Zero-Emission Vehicles and Hybrid Electric Vehicles, as requested by the 

commenter. 

138. Comment: LEV III appendices C and D, and ZEV 2012 appendices A-2 and A4 test procedures (and others) have many references to CFR Part 86, subparts 

B and C test procedures. EPA [United States Environmental Protection Agency] 

is in the process of migrating these subparts B and C to Part 1066. Not being 

harmonized with EPA [United States Environmental Protection Agency] creates 

additional test burden for OEM’s [original equipment manufacturer] by requiring 

duplication of testing and uncertainty as to the certification requirements. 

(Alliance) 

Agency Response: Comment noted. During the time of this rulemaking, the 

U.S. EPA had not finish migrating subparts B and C to Part 1066. ARB will 

work with U.S. EPA, and harmonize the test procedures where appropriate and 

necessary with the goal to relieve manufacturers of additional test burden. 

X. Miscellaneous 

139. Comment: In regards to subdivision 1962.1(b)(4), Requirements for Small 

Manufacturers and Independent Low Volume Manufacturers, additional 

language may be added to clarify that they are only entitled to earn delivery for 

sale and place in service credit in each state, and not traveling credits in the 

177 States. (Chew) 

Agency Response: Comment noted. ARB clarified regulatory language in 

subdivision 1962.1(d)(5)(E) and subdivision 1962.2(d)(5)(E) to specify only 

manufacturers with a requirement are allowed to travel credits to the Section 

177 states. ARB believes this language is clear and sufficient to prevent SVM 

and ILVMs from using subdivision 1962.1(d)(5)(E) and subdivision 

1962.2(d)(5)(E). 
93 

140. Comment: Like it or not, internal combustion engine vehicles still offer 

consumers the best value proposition. They are cheaper, have a long history of 

proven dependability and durability, and have little or no refueling or range 

issues. (CNCDA) 

Agency Response: Comment noted. ARB agrees that the purchase price of 

gasoline vehicles is currently less expensive than PHEVs and ZEVs. Gasoline 

vehicles are commercially available and able to meet stringent criteria pollutant 

and GHG fleet standards. ARB does believe that the total cost of ownership, 

including fuel and maintenance is lower for ZEVs when compared to 

conventional gasoline vehicles. Additionally, according to ARB’s 2009 analysis, 

gasoline vehicles will not be able to meet California’s long term 2050 GHG 

emission reduction goals. Only ZEVs and PHEVs will be able to provide the 

deep reductions in GHG emissions needed to meet California and ARB’s long 

term goals. That being said, up to 2017 model year, manufacturers are allowed 

to produce PZEVs, the cleanest gasoline vehicles, to comply with some, or all, 

depending on the manufacturer’s size, of their ZEV requirement. 

141. Comment: The ZEV requirement is clarified based on the annual NMOG 

production report. However, it would be useful also to clarify if the exempted 

vehicles such as emergency and law enforcement vehicles should be included, 

even if they are certified according to the California certification. To allow for 

any exemption will encourage these vehicles from being properly accounted 

for. (Chew) 

Agency Response: All vehicles that are California certified must be included in 

the annual NMOG production report regardless of whether the vehicles are 

emergency or law enforcement vehicles. However, if they are only federally 

certified, they do not need to be included in the annual NMOG production 

report. This level of detail would be more appropriately addressed in an update 

to Mail Out #95-04 (“Reports Pertaining to Compliance with the California Fleet 

Average Non-Methane Organic Gas (NMOG) Requirements and Zero Emission 

Vehicle (ZEV) Provisions Applicable to Manufacturers of Passenger Cars and 

Light-Duty Trucks”) which identifies what should be included in the annual 

NMOG report. 

142. Comment: We are very frustrated that ARB staff does not see natural gas 

vehicles as the “ultra-clean vehicles” they are. The staff reports are actually 

quite dismissive of the performance and potential for natural gas. Our primary 

concern is the attempt to draw a bright line between “ZEV fuels” and “non-ZEV 
94 

fuels”. The staff reports identify hydrogen fuel cell vehicles and battery electric 

vehicles as ZEVs and ZEV fuels and categorizes CNG [compressed natural 

gas] among the non-ZEV fuels. Curiously the staff reports don’t mention 

biomethane/biogas even though ARB’s own life cycle analysis identifies it as 

one of the cleanest transportation fuels. There is plenty of evidence to suggest 

that biomethane will be used increasingly as a transportation fuel, whether on 

its own or blended with conventionally (sic) natural gas. There is also lots of 

information about near-term engine developments that will reduce natural gas 

engines’ already very low emissions even lower. Given these facts we ask the 

Board to direct staff to work with our industry to take another look at life cycle 

emissions of biomethane and conventional natural gas to see if they are today 

or are likely to be in the time frame of these regulations just as clean as the 

fuels and technologies that ARB currently identifies as zero emission. 

(CNGVC) 

Agency Response: Staff acknowledges the approximately 30 percent lower 

fuel-cycle emission intensity of compressed natural gas (CNG) versus gasoline 

and, therefore, the great potential of this fuel to contribute to reductions in 

climate-related emissions. The ZEV regulation will continue to credit CNG 

vehicles through 2017 model year as AT PZEVs, and manufacturers are 

allowed to use those credits toward meeting their ZEV requirements. As a 

result, the deployment of CNG technology, especially with an increasingly 

efficient powertrain, would offer a strong contribution toward compliance with 

the ZEV regulation or a manufacturer’s GHG standards. 

In 2018 and subsequent model years, the ZEV regulation is focused on PHEVs 

and ZEVs. Staff’s 2009 analysis showed that these technologies are essential 

to meet long term GHG emission reduction goals in California. Additionally, 

fuels for these vehicles can be derived from renewable and zero-carbon 

sources. Bio-methane is very important, but will likely be needed by other 

sectors where pure EV and fuel cell technology may not be as feasible. 

143. Comment: We thought the intent was for the ZEV mandate to go away after 

2025 model year, because by that time the goal of commercialization would 

have been achieved. After the technology has become commercially available, 

other performance-based policy mechanisms should be used to further the 

ARB’s air quality and GHG goals. The LVMs recommend that the ZEV 

program be sunset post-2025 model year because the technology would be 

commercial and the emissions benefits are appropriately considered in the 

performance LEV and GHG regulations. (LVM) 
95 

Ford requested that the Board incorporate the ZEV technologies into the 

performance-based LEV III emission and greenhouse gas program and in the 

post 2025 time frame. (Ford) 

Agency Response: Comment noted. The goal of the ZEV regulation is to 

commercialize near-zero and ZEV technologies, but at this time is it premature 

to pick a sunset date for the regulation. In subsequent reviews of the regulation, 

ARB will assess whether or not it is appropriate to sunset the ZEV regulation in 

exchange for a more stringent fleet average standard if the goal of 

commercialization is met prior to 2026 model year. 

144. Comment: The proposal should be revised to clarify that “or greenhouse gas” 

does not include air conditioning emissions or upstream emissions. The LVMs 

believe that the previous definition of a ZEV based on criteria emissions was 

sufficient to distinguish a vehicle with emissions from a vehicle without 

emissions. However, we understand the ARB’s desire to change the definition 

to focus of the program (sic) on GHG emissions. However this has other 

consequences. The GHG regulations include air conditioning and upstream 

emissions. The intent of the ZEV is not to have zero emission air conditioning 

systems or ZEVs offered without air conditioning systems. Likewise; the 

greenhouse gas regulations include upstream emissions from producing zero 

emission energy. The goal of the ZEV regulations is to commercialize ZEVs, 

not to control the upstream emissions. Adding GHGs to the ZEV Emission 

Standard, could be interpreted as including upstream emissions. Because 

GHGs can be so broad, that there could be consequences that are not 

highlighted here, which could result in the implementation being tied up in 

litigation due to different interpretations. The LVMs recommend retaining the 

current ZEV Emission Standard definition or, at minimum, the proposal should 

be revised to exclude air conditioning and upstream GHG emissions. (LVM) 

Agency Response: Comment noted. ARB clarified the definition of a ZEV to 

reflect that GHG emissions from a vehicle’s air conditioning system will not 

exclude the vehicle from counting as a ZEV. ARB did not consider it 

appropriate to indicate that a vehicle’s upstream emissions should also be 

explicitly excluded from this definition. The definition clearly says “under any 

and all possible operational modes and conditions.” Upstream emissions do 

not occur during vehicle operation, but rather at the electricity plant or at the 

hydrogen production location. 
96 

145. Comment: Staff proposed to require SULEV 20 and/or SULEV 30 vehicles 

starting in the 2015 model year for manufacturers to continue to earn ZEV 

credit for PZEV type vehicles. This change is intended to match the new 

vehicle classifications under the LEV III program that will start in 2015. VW is 

concerned that this requirement may lead to the unintended consequences of 

forcing all manufacturers marketing PZEVs to recertify their PZEV vehicles to 

the new SULEV 20 and SULEV 30 categories for the 2015 model year. We 

believe staff intended that existing LEV II PZEV vehicles can be carried over 

into the new LEV III regulation as an initial compliance option for LEVIII and 

that recertification to final LEV III standards (including new SFTP [supplement 

federal test procedure] requirements and new certification fuel) could occur 

later. We request that CARB evaluate this proposal and ensure that a 

complete changeover of a manufacturer’s PZEV fleet in 2015 model year is not 

required due to this proposed language. (VW) 

The PZEV provisions do not appear to allow carry-over PZEVs from the 

2014MY [model year]. Specifically, §1962.1(c)(2)(A) specifies the LEV III 

exhaust regulations (§1961.2(a)(1)) for 2015-2017MY PZEV exhaust. However, 

this would require recertification on the new certification fuel and certification to 

SFTP [supplement federal test procedure] II. Moreover, the regulation also 

does not recognize early compliance with the LEV III SULEV standards. (The 

LEV III Evap Standards in §1976(b)(1)(G) recognize carryover PZEV evap as a 

LEV III Evap, so no changes are needed for evap.) Allow carry-over LEV II 

SULEV (i.e., §1961(a)(1)) for 2014-2017MYs [model years]. Allow compliance 

with PZEV using LEV III SULEV20 or SULEV30 in 2014MY [model year]. 

(Alliance) 

Volvo recommends that CARB align the following areas in the ZEV regulation 

with the LEV III criteria emission regulations: 1) PZEV carryover from 2014 and 

prior model years: As written, the regulations would require manufacturers to 

recertify all PZEVs using the LEV III (or federal Tier 3) certification fuel and to 

the new SFTP [supplemental federal test procedure] emission standards; 2) 

revise the model year 2009 – 2017 ZEV Regulation §1962.1(c)(2) to allow 

manufacturers to carry over PZEV certification data to model year 2015 and 

beyond; and 3) Similar to Volvo abovementioned request concerning early 

certification to LEV III EVAP [LEV III evaporative standards], Volvo requests 

that equivalent changes be made to §1962.1(c)(2) to allow early certification of 

PZEVs to LEV III. (Volvo) 
97 

Agency Response: ARB agrees that manufacturers should be allowed to 

certify to LEV III SULEV and zero evaporative standards as early as possible, 

and to LEV II SULEV and zero evaporative standards as necessary. ARB 

modified subdivisions 1962.1(c)(2)(A) and (B), as well as subdivisions 

1962.2(c)(2)(A) and (B) to allow manufacturers to certify to LEV III or LEV II 

SULEV and zero evaporate standards as appropriate. 

146. Comment: We've seen the ZEV mandate, which, after decades on the books, 

and enormous publicly-funded subsidies has consistently failed to meet market 

share projections or offer vehicles that can compete with conventional vehicles 

in cost and performance. (Stein) 

Agency Response: Manufacturers have always been in compliance with the 

ZEV regulation. The ZEV regulation has resulted in over 1 million PZEVs, more 

than 300,000 conventional hybrids, and thousands of ZEVs being placed on 

California’s roads. PZEVs and AT PZEVs, the vehicles closest to 

commercialization, are cost competitive with other gasoline technologies. ARB 

believes the ZEV regulation has played an important role in the 

commercialization of these vehicle types, and will use the ZEV regulation to 

spur on commercialization of PHEVs and ZEVs. The regulation has been 

modified in the past to reflect the cost and status of technology (batteries and 

fuel cells). The regulation is being dramatically ramped up with these revisions 

because costs and performance of batteries and fuel cells have or are reaching 

commercial readiness to compete with conventional technologies. 

These amendments will bring vehicle volumes to commercial levels by 2025. 

147. Comment: Create a transparent, expanding ZEV trading market system or a 

third-party system. This expanded system will accurately monetize the credits’ 

value and ensure their liquidity and validity by allowing more trades and more 

frequent reporting of the value of the trades. Additionally, this system has the 

potential to reduce ARB operating costs and legal risks, while retaining its 

enforcement power. Critically, it would provide more transparency and 

certainty for investors committed to the sector, which would complement the 

program’s states goals. ARB staff and the Board have recognized the merits 

such an idea and are currently evaluating and/or establishing something similar 

for the Low Carbon Fuel Standard (LCFS) and the cap-an-trade- program 

under AB32 [California Assembly Bill 32]. Importantly, with the expansion of 

the ZEV program in line with Staff’s current recommendation, credit trading 

among manufacturers will be more commonplace, which makes not an 

appropriate and critical time to consider such measures. CODA proposes that 
98 

the Board adopt a resolution directing staff to develop regulatory language 

governing an expanded or third-party system within six months, or a timeframe 

that the Board deems reasonable. (CODA) 

Agency Response: Manufacturers currently transfer credits directly with other 

manufacturers without the use of a third-party system. This method has been 

successfully used to date for all transactions. The regulatory language is clear 

in stating that only manufacturers can conduct transactions, i.e. third party 

participants are not allowed. ARB believes there is no need to modify an 

effective system successfully in use. 

Y. Incentives 

148. Comment: SCAQMD staff believes that near term increases in the penetration 

of AT PZEVS (sic) and ZEVs can be accommodated through increased 

manufacturer incentives to facilitate their accelerated market introduction. 

(SCAQMD) 

Considering the targets being proposed for transitioning California's fleet to 

zero-emission vehicles and the higher incremental costs of these vehicles at 

least in the early stages of market adoption. We urge the Air Resources Board 

to institute incentive programs that will support mass ZEV adoption over the 

years between now and 2025. We believe such investment is crucial to 

ensuring the market for ZEVs remains robust and to ensuring that air quality 

and greenhouse gas emission. (BAAQMD) 

Provide stronger incentivization (sic) for consumers to purchase ZEVs and 

TZEVs. (CNCDA) 

Agency Response: Comments noted. ARB cannot provide financial incentives 

without authorization resulting from California Legislative action. Therefore, 

these comments are outside the scope of this rulemaking. However, ARB 

remains committed to working through regulations and programs outside of the 

ZEV regulation to provide consumers with incentives to purchase and use 

TZEVs and ZEVs. 

149. Comment: In order to increase the reduction of pollutants from the air that are 

emitted by electric generation plants, regulators must provide incentives to the 

buyers of battery operated ZEVs to install on the property of the ZEV buyers a 

PV system that would provide a minimum daily amount of energy that could be 

used for charging the ZEV. (Gomez) 
99 

Agency Response: The ZEV regulation does not provide monetary incentives 

to vehicle operators for vehicles or infrastructure. Therefore, these comments 

are outside the scope of this rulemaking. However, ARB remains committed to 

working through regulations and programs outside of the ZEV regulation to 

provide consumers with incentives to purchase and use TZEVs and ZEVs, and 

the appropriate infrastructure. 

150. Comment: While the ZEV regulation specifies the requirement for OEMs 

[original equipment manufacturers] to produce ZEV vehicles, it does not 

address the consumers who will make the decision whether or not to purchase 

or lease those vehicles. The volumes specified by the ZEV regulation will 

require a tremendous transformation of the transportation market. In order to 

promote this process, incentives to customers will be essential. These will need 

to include monetary incentives to buy down the higher up-front costs of ZEV 

technology as well as non-monetary incentives which add value to the 

customer such as HOV [high occupancy vehicle] lane access, parking policy, 

etc. (LVM) 

Agency Response: The requests for complimentary policies made by the LVMs 

are not contained within the ZEV regulation and accordingly are outside the 

scope of this rulemaking. 

151. Comment: The SCAQMD staff urges ARB to begin discussions on incentive 

mechanisms that will bring ZEVs and other near-zero emission vehicles into the 

market as early as possible. Such discussions could be part of the discussions 

on the Carl Moyer and AB 118 [California Assembly Bill 118] programs. In 

addition, consumer outreach and promotion of ZEVs and other near-zero 

emission vehicles must be a top priority for ARB in order to ensure strong 

market penetration. SCAQMD staff recommends that the state work with air 

districts to develop mechanisms that could significantly increase incentives to 

facilitate the sales of these cleaner vehicles prior to 2023. (SCAQMD) 

Agency Response: Comments noted. ARB cannot provide financial incentives 

without authorization resulting from California Legislative action. Therefore, 

these comments are outside the scope of this rulemaking. However, ARB 

remains committed to working through regulations and programs outside of the 

ZEV regulation to provide consumers with incentives to purchase and use 

TZEVs and ZEVs. 
100 

Z. Comments Outside the Scope of the Rulemaking 

152. Comment: In order to expand the use of ZEVs regulations must be written to 

facilitate the operation of these vehicles. An owner should not have to get a 

separate metered circuit in order to receive a lower electricity rate. (Gomez) 

Agency Response: The ZEV regulation applies to manufacturers who produce 

new vehicles in California, and does not mandate metered circuits in residential 

or commercial properties. This comment is outside the scope of this 

rulemaking. 

153. Comment: Reaching 75% of all vehicle in California in 2025 can be achieved if 

we include the existing old vehicles which have been converted into electric. 

On behalf of the Cleantech Institute, I hereby request the ARB to subsidize the 

cost of the electric vehicle conversion as part of the amendments to the 

California ZEV Regulation. (CI) 

Agency Response: The ZEV regulation applies to manufacturers who produce 

new vehicles in California. Converted electric vehicles do not receive, nor are 

proposed to receive any credit and accordingly are outside the scope of this 

rulemaking. 

154. Comment: There are over 500 million internal combustion engine (ICE) 

vehicles operating in the US today, approximately 1.5 vehicles per person in 

the U.S. Unless we have a program to not only purchase brand new electric 

vehicles, but to create a network of Green Vehicle Conversion Centers, we are 

not addressing the issue of climate change and meeting California’s AB 32 

mandate. I recommend that ARB pursue an aggressive Cash for EV [electric 

vehicle] Conversion Program. (USGVC) 

Agency Response: The ZEV regulation applies to manufacturers who produce 

new vehicles in California. Converted electric vehicles do not receive, nor are 

proposed to receive any credit and accordingly are outside the scope of this 

rulemaking. 

155. Comment: After reading the proposed emission standards for light duty trucks 

in the Air Resources Board’s Report, I would like to state that objections to the 

proposed standards should be viewed skeptically. First, while automobile 

manufacturers can claim that stricter standards will result in higher costs, the 

overall percentage is minimal because it allows companies to produce vehicles 

that create lower emissions while at the same relying on those same vehicles to 
101 

alter their percentage of vehicles producing carbon emissions. Secondly, while 

corporations tout their production of hybrid vehicles they continue to maintain 

that production of vehicles remains costly. Automobile manufacturers have 

invested in research and development indicating that they believe corporate 

viability can be reached through the implementation of alternative fuels. This 

research alone should result in the implementation of new technology that may 

be expensive at the beginning, but should become less expensive as 

innovations are implemented. A case in point could be used by applying the 

Nissan Leaf and the Tesla Model S. Both rely on battery-powered engines, but 

the cost of the vehicles is significantly different. While the Model S will start 

59,900 after government subsidies, the battery powered LEAF will cost 27,700 

after government rebates. This allows customers as well as corporations to 

produce alternative fuel vehicles while making them available to the public. In 

this sense, as corporations continue to develop in this technology, such 

transitions will allow them to share technology with other vehicles reducing the 

overall cost of production. (Altman) 

Agency Response: This comment addresses the regulated manufacturers and 

not the regulation nor the modifications to the regulation, and accordingly is 

outside the scope of this rulemaking. 

156. Comment: Persuade the state and municipalities to purchase more ZEVs and 

TZEVs. (CNCDA) 

Agency Response: The ZEV regulation requires manufacturers who produce 

new vehicles in California to produce ZEVs. The ZEV regulation does not apply 

to the State of California or municipalities; the comment is outside the scope of 

this rulemaking.

COMMENTS PRESENTED DURING THE POST-BOARD HEARING 

COMMENT PERIOD 

Regulatory Comments

Comments grouped in this section responded to specific changes made available on 

February 22 through March 8, 2012. 

A. GHG ZEV Over-Compliance Provision 
102 

161. Comment: Subaru is supportive of ZEV staff’s proposed GHG-overcompliance ZEV offset option. (Subaru) 

Agency Response: ARB appreciates support for the GHG-ZEV overcompliance provision, including the 15-day modifications made to the 

provision. 

B. Manufacturer Size Definition 

162. Comment: Ferrari of San Francisco urges ARB to make an additional change 

to the regulatory language before finalizing the text. Under the 15-day Notice 

as proposed, Ferrari would immediately become part of a related 

manufacturer’s fleet for the 2013 model year, and would have to begin 

complying with more stringent exhaust and evaporative emission standards 

with little prior notice. Such a requirement at short notice to the companies 

involved could create great logistical and practical difficulties. (FSF) 

Ferrari Beverly Hills and Ferrari of Silicon Valley are concerned about the 

possible lack of a transition period for SVMs under the 15-day Modified Text. 

As we understand the language, model year 2013 and model year 2014 

Ferrari vehicles could have to be counted as part of a related manufacturer’s 

fleet for purposes of the LEV II and III, ZEV, and GHG programs. Ferrari 

immediately would be required to being complying with more stringent 

exhaust and evaporative emission standards without sufficient lead time and 

planning. We hope that ARB clarifies that a transition period is necessary to 

protect correct SVMs from a sudden, drastic change in applicable standards. 

It is my understanding that Ferrari intends to apply to EPA [United States 

Environmental Protection Agency] for SVM status for model year 2013. If 

EPA [United States Environmental Protection Agency] grants this application 

and California does not clarify the applicability of its own provision, Ferrari 

could be considered a SVM for EPA [United States Environmental Protection 

Agency] purposes but not for compliance with California regulations. We 

respectfully request that ARB make some accommodation to resolve this 

issue. (FBH) 

Agency Response: Staff disagrees with the commenters that under the 

current regulations, SVMs would be required to comply with more stringent 

exhaust and evaporative emission standards for the 2013 model year “with 

little prior notice” due to current aggregation requirements. This is because, 

the requirement that manufacturer sales be aggregated under certain 

conditions was first adopted by the Board in 2001, as part of the “Rulemaking 

on the Amendments to the California Zero-Emission Vehicle Regulations 
103 

Regarding Treatment of Majority Owned Small or Intermediate Volume 

Manufacturers and Infrastructure Standardization.” Then, in 2004, the Board 

added aggregation provisions that are applicable to the non-ZEV regulations 

as part of the “Pavley” GHG regulations. In 2009, when Ferrari changed 

status because Fiat (the company that owns Ferrari) acquired a greater than 

10 percent ownership of Chrysler, all three of these manufacturers should 

have been aware of the aggregation requirements and obligations of 

aggregated manufactures. These manufacturers are also aware that the 

onus of compliance for aggregated manufacturers falls on all of the 

aggregated manufacturers. A small volume manufacturer may also elect to 

purchase credits from another manufacturer, as an alternative to relying on 

the manufacturers with which it is aggregated. Finally, it is unknown whether 

or not the U.S. EPA will include the “operationally independent” language in 

their final 2017 through 2025 national greenhouse rule (see response to 

Comment 117), so it is premature to change California’s regulatory language 

based on what the U.S. EPA might do in the future. 

C. Optional Section 177 State Compliance Path 

163. Comment: Oregon offers our support for the rule language proposed in this 

15-day comment period. We would like to call specific attention to newly 

added reporting requirements that we consider to be critical to the effective 

implementation of the new compliance option. The pool-related reporting 

requirements are needed because they provide critical information about 

“Section 177 State” compliance overall-information that would not otherwise 

be available. This representation is necessary to enable individual states to 

assess compliance and pursue enforcement actions as appropriate. Without 

this, an underperforming manufacturer could assert it complies by virtue of 

vehicle placed elsewhere, but without having to provide evidence. Similarly, 

in the event a manufacturer fails to meet all requirements of the Optional 

Compliance Path, it is necessary for that manufacturer to be subject to the 

provisions of the base path in all states. Without such provisions, a 

noncomplying manufacturer could manipulate its compliance profile to its 

advantage and significantly hamper the ability of states to enforce their rules. 

(OR) 

Agency Response: ARB appreciates support for the optional Section 177 

state compliance path as written. However, manufacturers and Section 177 

states have agreed to some changes to the language in this provision, to be 

made at a subsequent rulemaking. See response to Comment 164, 165, and 

166. 
104 

164. Comment: Ford does not agree with the provision that manufacturers may 

only trade and transfer credits used to meet the same model year 

requirements. This “same model year” provision places a much more 

stringent constraint on the Optional Path, compared to the base regulation. 

Furthermore, the 15-Day Notice description of the Optional Section 177 State 

Compliance Path clearly states, “Existing carry-forward and carry-back 

provisions will remain available to manufacturers.” The regulatory language 

should be modified to be consistent with this description. Manufacturers 

should be encouraged to place vehicles in the S177 (section 177) states early 

and carry the ZEV credits earned forward to meet later obligations. 

Manufacturers use these provisions to “keep ahead of the curve”, especially 

considering the proposal to limit the use of carry-back credits to one year. 

Allow ZEV credits to be traded and transferred consistent with the usage of 

ZEV credits of the base regulation, including carry-forward and carry-back of 

ZEV credits. (Ford, 15-Comment 2) 

The agreement between the LVMs and the Section 177 States is to freely 

allow transfers (and trading with a penalty) from states with banked credits to 

states with obligations. This Optional Compliance Path is based on an 

agreement between the LVMs and the Section 177 States. The agreement 

says that transferring and trading within the pools could not start until model 

year 2015 for TZEVs and model year 2016 for ZEVs, however there is no 

constraint that the credits traded could not be from prior years. Honda 

believes that the clear intent is to enable LVMs with excess credits banked in 

one state, regardless of how or when those credits were obtained to utilize 

those credits in other states where there is an obligation. (Honda) 

Agency Response: It is now understood by both the Section 177 states and 

the manufacturers that 2012 through 2017 model year TZEV and ZEV credits 

will be allowed to pool starting in 2015 for TZEVs and starting in 2016 for 

ZEVs. This language will be modified in a subsequent rulemaking, likely later 

in 2012. 

165. Comment: Once the manufacturer has met the additional Optional Path 

obligation in 2016 and 2017MYs [model years], penalty for a failure to comply 

for 2018 – 2021MY [model years] should be based on the Optional Path 

requirements. For example, a manufacturer making a good faith effort to 

meet the regulation may be one vehicle shy of meeting the 2020MY [model 

year] Optional Path in one state. The penalty calculation should be based on 

that one vehicle in that one state, and compliance should continue to be 
105 

based on the Optional Path for subsequent model years. As proposed, this 

example would require the manufacturer to go all the way back to 2018MY 

[model year] , undo all trades and transfers and be penalized based on the 

base ZEV regulations, which the manufacturer was no longer trying to meet 

once it selected the Optional Path. This would likely put the manufacturer 

significantly out of compliance in all states, retroactively back to 2018MY 

[model year], even though the manufacturer may already have demonstrated 

compliance for those model years. Base any penalties for failure to meet the 

Optional Section 177 State Compliance Path for 2018 – 2021MY [model 

years] on the requirements of the Optional Path, rather than reverting to the 

base path. Furthermore, if a penalty is paid, the provisions of the Optional 

Path should continue for subsequent model years, considering the 

manufacturer has already met their obligation to deliver ZEVs to the S177 

[section 177] states early. (Ford) 

The proposed failure to meet obligations in model year 2018 through 2021 is 

too severe a constraint on the OEM [original equipment manufacturers]. 

Honda believes the clear intent of the Section 177 States/LVM agreement 

was to have a rather severe penalty for not achieving the increased ZEV 

volumes of model year 2016 and model year 2017. That severe penalty is 

the loss of all benefits of the optional compliance path, and reversion to the 

basic compliance obligations. In later years, the decreased volumes should 

have the same penalties as the underlying regulation. Imagine an OEM 

[original equipment manufacturer] who has met all of the increased 

obligations in model year 2016 and 2017, and taken advantage of the 

decreased obligations in model years 2018, 2019, and 2020, but in the last 

year, model year 2020, fell just short of the ZEV goal. This OEM [original 

equipment manufacturer] would be required to go back to model year 2015, 

six years earlier and recalculate all their obligations as if they had never been 

on the optional path. This is too severe and will deter most LVMs from 

participating in this option. (Honda) 

Agency Response: It is understood by both the Section 177 states and the 

manufacturers that failure to meet reduced percentages in 2018 through 2020 

would mean the penalty would be applied to the modified percentage for 

those three model years. This language will be modified in a subsequent 

rulemaking, likely later in 2012. 

 

166. Comment: The impact of “pooling” will be understood by the trading and 

transferring of credits, not by placement in service reporting requirements. At 
106 

the end of a model year, manufacturers must submit ZEV reports to each of 

the states. Those reports will include ZEV credits that were traded and 

transferred from other states. This ZEV credit report will provide the data 

needed for the states to evaluate the impact of “pooling”. Revise the Optional 

Section 177 State Compliance Path to only require state of vehicle placement 

and Vehicle Identification Number for vehicles that have a placed in service 

requirement in the base regulation. (Ford) 

VINs should not be required for TZEVs because these vehicles do not have a 

placed-in-service requirement. We recognize that section 177 States want to 

track activity in their states. OEMs [original equipment manufacturers] will be 

submitting reports about actual state sales, however, OEMs [original 

equipment manufacturers] should be required to report VIN-level, placed-inservice information only for ZEVs that travel. (Honda1, 15-Comment 6) 

Agency Response: It is understood by both the Section1 77 states and the 

manufacturers that vehicle identification numbers will not be required for 

TZEVs, but can be requested by the Section 177 states or California at any 

time. This language will be modified in a subsequent rulemaking, likely later 

in 2012. 

167. Comment: We understand that ARB worked privately with specific OEMs 

[original equipment manufacturers] and the 177 States to reach this 

agreement. In our discussions with representatives of these States, it was 

always their intention for all OEMs [original equipment manufacturers] to be 

able to participate -- but due to time constraints – they were not able to 

address the iLVM/IVM concerns. Clearly, establishing these regional pools 

will allow OEMs and States to significantly reduce the paperwork required to 

demonstrate compliance. Unfortunately, the 15 Day Notice does not include 

clear direction how iLVM/IVMs are able to comply. ARB, 177 and iLVM/IVM 

OEM [original equipment manufacturers] staff should work to establish 

specific details are included in the FSOR to ensure iLVM/IVMs may 

participate in this Optional Compliance Path. (Mitsubishi) 

Agency Response: IVMs may participate in the optional Section 177 state 

compliance path. IVMs have requirements in the section 177 states, and it is 

appropriate for them to participate in such a program. However, ILVMs have 

no requirement in the Section 177 states and are allowed to bank all credits 

generated in those states for future compliance. The fact that ILVMs have no 

ZEV requirement is sufficient compliance flexibility in the section 177 states. 
107 

ARB invites participation by LVMs and IVMs in the upcoming rulemaking to 

discuss changes mentioned in responses to Comments 164, 165, and 166. 

D. Lead Time 

168. Comment: Under California law, statutes and regulations can have an 

impermissible retroactive effect if they “operated retroactively to materially 

alter the legal significance of a prior event” in such a way as to “given a 

different and potentially unfair legal effect to actions taken in reliance on the 

preenactment law.” California Trout, Inc. v. State Water Resources Control Bd. 

(1988), 207 Cal.App.3d 585, 609 (1989), citing Mahon v. Safeco Title Ins. Co. 

(1988) 199 Cal.App.3d 616, 620–623, 245 Cal.Rptr. 103.) Here, although 

Staff has characterized this is a minor change, it does alter actions that 

manufacturers have already taken in reliance on the previous regulatory 

provisions. The ARB is proposing this change for the 2012MY which is near 

the end of production; moreover, the 2013MY is well underway (having begun 

on January 2, 2012) and the rule has not been finalized yet. This proposal 

provides no lead time for a manufacturer to make adjustments to their product 

plans to make up the reduction in the ZEV credits resulting from the 

regulatory change. This could put a manufacturer out of compliance in 

2012MY, with no realistic opportunity to recover. The ARB should refrain from 

enacting retroactive changes in the rules that adversely affect the ZEV credits 

associated with vehicles already produced and delivered for sale. Defer 

proposed changes that have a negative impact on compliance until the 

2014MY at the earliest. (Ford) 

Agency Response: It appears that this comment is based upon an 

interpretation of the existing sections 1962.1(g)(2)(A) and (B) that would allow 

manufacturers to use different NMOG fleet averages when calculating credits 

earned by different vehicle classes. It was never the intent of ARB to allow 

manufacturers to use different NMOG fleet averages in calculating credits 

earned for various vehicle classes. The fact that manufacturers had adopted 

such an interpretation was first brought to ARBs attention in 2009. In 

response ARB released a statement on December 6, 2010, stating that the 

then-current language of sections 1962.1(g)(2)(A) and (B) was susceptible to 

the manufacturers’ interpretation, but that the manufacturers’ interpretation 

ran counter to ARB’s intent and that the rule’s language would be changed for 

the 2012 model year to clarify that the PC and LDT1 gm/mi NMOG multiplier 

is to be used. Accordingly, regulated parties have known that this change 

was planned since December 6, 2010, thus giving them adequate lead time to 

adapt their production as they saw fit. 
108 

E. Comments Submitted Outside of the 15-Day Comment Period 

169. Comment: Travel provision credits are granted to our competitors for similar 

vehicles and ARB’s action significantly reduces our companies’ ability to gain 

credits. Given that iLVMs will be reclassified in 2018MY [model year], these 

credits may be necessary for compliance and therefore, very valuable to 

transitioning iLVMs such as Mitsubishi Motors. Allow OEMs [original 

equipment manufacturers] required to comply in 2018MY to bank Travel 

Provision credits. This will eliminate ARB Staff’s fear of non-traditional OEMs 

[original equipment manufacturers] from stockpiling credits for sale and allow 

current iLVMs to transition to IVM status in 2018MY. (Mitsubishi) 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15-Day change Notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in Part II, Section N “Travel 

Provision” under the 45-day comment responses. 

170. Comment: NGVs [natural gas vehicles] – including both dedicated and dualfuel vehicles – should be awarded partial TZEV credits beginning in 2018, 

reflecting the direct role NGV [natural gas vehicles] market development 

plays in facilitating the development of TZEV hydrogen ICEs [internal 

combustion engine] as well as ZEV FCVs. We propose that each dedicated 

NGV [natural gas vehicles] should receive 0.7 TZEV credits, and each dual 

fuel NGV [natural gas vehicles] should receive 0.5 TZEV credits. (VNG) 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15-Day change Notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in Part II, Section X 

“Miscellaneous” under the 45-day comment responses. 

171. Comment: In the hybrid test procedures, ARB requires that the battery state 

of charge (SOC) at the end of the test be within 1% of the battery’s SOC at 

the beginning of the test. EPA recently adopted SAE J1711 and SAE J1634 

which allows the variance between the starting and ending SOC to be within 5% 

of each other, and allows for an energy adjustment based on the SOC 

difference. Honda believes that the intent of ARB is to harmonize as much as 

possible the regulations between EPA and ARB. Additionally, Honda believes 

that the SAE procedures are a) more flexible, b) more realistic, and c) will 

reduce design and testing burdens that are unnecessarily the result of ARB’s 
109 

current practice. We respectfully request that ARB consider this issue when 

harmonizing their regulations with EPA. (Honda) 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15-Day change Notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in Part II, Section W “Test 

Procedures” under the 45-day comment responses. 

172. Comment: We are submitting this docket correspondence to be on record 

with our continuing concern over no changes to the ZEV mandate definition of 

“Intermediate Volume Manufacturer”. Subaru agrees with Mazda Motor 

Company’s proposal that a manufacturer is classified as an IVM if it has 

average annual California sales for three previous consecutive model years 

between 4,502 and 20,000 per year or between 20,0001 and 40,000 per year 

and average annual global sales of less than 1.8 million vehicles per calendar 

year. It appears that CARB ZEV staff’s direction from management is to 

“monitoring the issue” without making any definition changes from comments 

received during the 15-day notice period. We are deeply concerned that this 

direction will have a significant financial hardship impact on Subaru. (Subaru) 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15-Day change Notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in Part II, Section R 

“Manufacturer Size Definition” under the 45-day comment responses. 

173. Comment: The GHG-ZEV over-compliance provision is a give-away to 

certain auto manufacturers that will result in a new increase in emissions of 

criteria air pollutants and precursors as well as toxic air contaminants, has no 

GHG emissions benefits, and undermines the objective to commercialize zero 

emission drive technology. The Board has nowhere justified this relaxation 

under the Board’s governing statutory authority and the increase in ROG + 

NOx [reactive organic gases plus oxides of nitrogen] that this provision will 

cause, which California AQMDs rely upon for achieving compliance with 

National Ambient Air Quality Standards (NAAQS). Finally, as a procedural 

matter, Chrysler is concerned that at the ARB hearing on January 26, 2012, 

the Board did not engage in discussion or consideration of these serious 

objections to this provision. (Chrysler) 
110 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15-Day change Notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in Part II, Section P “GHG-ZEV 

Over-Compliance Provision” under the 45-day comment responses. 

174. Comment: Chrysler urged in its earlier comments that the Board consider the 

ROG + NOx [reactive organic gases plus oxides of nitrogen] benefits of the 

ZEV program that AQMDs have relied upon in their SIPs and that will be 

foregone by allowing over-compliance with the national GHG standards to 

substitute for ZEV compliance. In effect, rather than producing ZEVs that 

achieve reductions in ROG + NOx [reactive organic gases plus oxides of 

nitrogen], certain manufacturers with internal combustion products lines better 

positioned to achieve higher fuel economy will substitute such vehicles that 

over-comply with the national GHG standards but do not have lower ROG + 

NOx [reactive organic gases plus oxides of nitrogen] emissions or emission of 

toxic air contaminants as ZEVs do. Chrysler analyses, the GHG-ZEV Overcompliance Credits provision will result in additional ROG + NOx [reactive 

organic gases plus oxides of nitrogen] emissions to California’s inventory, and 

will cause additional toxic air contaminants as well. As a result, by adopting 

the GHG-ZEV Over-compliance Credits provision, the Board’s action fails to 

obtain the maximum benefit the ZEV program could achieve without the Overcompliance provision. (Chrysler) 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15-Day changes Notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in Part II, Section P “GHG-ZEV 

Over-Compliance Provision” under the 45-day comment responses. 

175. Comment: In section 43000 of the Health and Safety Code, the California 

Legislature has declared that the emission of air pollutants from motor 

vehicles is the primary cause of air pollution in many parts of the State, and 

Sections 39002 and 39003 of the Health and Safety Code charge the Board 

with the responsibility for controlling such air pollution. More specifically, 

Section 43018(a) of the Health and Safety Code directs the Board to achieve 

the maximum degree of emission reduction possible from vehicular and other 

mobile sources in order to accomplish the attainment of the Sate ambient air 

quality standards at the earliest practicable date. Similarly, Section 396667 of 

the Health and Safety Code directs the Board to set standards to achieve the 
111 

maximum possible reduction in public exposure to substances that the Board 

has identified as toxic air contaminants pursuant to section 39662 of the 

Health and Safety Code; such regulations affecting new motor vehicles are to 

be based on the most advanced technology feasible for the model-year and 

may include, but are not limited to, the required installation of vehicular 

control measures on new motor vehicles. 

Specially regarding ozone nonattainment, the Board is responsible for the 

mobile source portion of the SIP strategy for attaining the NAAQS [national 

ambient air quality standards] for ozone in all areas of the States. Part of that 

element in the SIP is to rely on the California LEV program to provide 

significant reductions of ozone precursor pollutant emissions from passenger 

cars and LDTs and to reach the 1997 ozone standard by attainment date in 

2023, with emissions of NOx [oxides of nitrogen] in the greater region 

reduced by two-thirds. 

The Board’s relaxation of the ZEV requirements for manufacturers who overcomply with the national GHG standards violates these statutory directives 

and undermines the SIP strategy. In theory, the Board could relax the ZEV 

requirements if they were not achievable. But in fact the Board has not 

demonstrated that the ZEV requirements with resulting reductions in ROG + 

NOx [reactive organic gases plus oxides of nitrogen] and toxic air 

contaminants are not achievable. Indeed, the ARB has taken the position in 

promulgating the ZEV requirements that they are achievable and will result in 

such emission reductions. To relax those requirements, the ARB would have 

to abandon its earlier conclusions that the ZEV requirements represent the 

maximum achievable emissions reductions that the Health & Safety Code 

requires the ARB to adopt. The Board has not done this and thus the ZEV 

requirements are prohibited. 

Indeed the ARB has not shown that the GHG-ZEV Over-Compliance Credits 

regulations will achieve any emissions benefits of any kind, including GHG 

emissions. Of course, ZEVs emit no GHGs from the tailpipe, and even 

accounting for upstream emissions, overall GHG emissions are lower. The 

ARB has not shown that the retired credits from over-compliance with the 

national GHG standards would more than offset the loss of GHG benefits 

from the sale of ZEVs. Furthermore, the primary goal of the ZEV program is 

to increase volumes of ZEV technology vehicle in the marketplace to reach a 

critical mass and thereby achieve even greater GHG, ROG + NOx [reactive 

organic gases plus oxides of nitrogen], and toxic air contaminant reductions. 

Reducing ZEV obligations works counter to these stated air emissions 

objectives. In short, the ARB has offered no explanation whatsoever of the 
112 

environmental rationale for crediting GHG over-compliance to reduce ZEV 

obligations. 

Regardless of potential GHG impacts from the proposed GHG-ZEV OverCompliance Credit provision, even if the GHG over-compliance provision 

were to achieve new GHG benefits, reductions of the GHGs should not 

override the Board’s obligation under the Health and Safety Code to achieve 

maximum reductions in criteria pollutants and air toxics. Emissions of these 

pollutants have direct health effects in California, and the cost to industry to 

reduce such pollutants is dramatic. 

In sum, the proposed GHG-ZEV over-compliance credits provision seek to 

impose requirements that are outside the scope of the Board’s statutory 

authority. Under Cal. Govt Code Section 11342.2 ”no regulation adopted is 

valid or effective unless consistent and not in conflict with the statute and 

reasonable necessary to effectuate the purposes of the statute.” Because the 

proposed regulations conflict with and fail to effectuate the purposes of the 

statute, ARB should withdraw the GHG-ZEV over-compliance credits 

provision. (Chrysler) 

Agency Response: In regard to additional early action offset protocols, this 

comment falls outside the scope of the 15 day change notice. Because the 

comment falls outside the scope of the notice, no further response is required. 

Responses to similar comments can be found in part II, section P “GHG ZEV 

over compliance provision” under the 45 day comment responses.