45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 California Environmental Protection Agency

AIR RESOURCES BOARD

CALIFORNIA EXHAUST EMISSION STANDARDS AND TEST PRO CEDURES FOR 2009 AND SUBSEQUENT MODEL ZERO-EMISSION VEHICLES, A ND 2001 AND SUBSEQUENT MODEL HYBRID ELECTRIC VEHICLES, IN THE PASSENGER CAR,

LIGHT-DUTY TRUCK AND MEDIUM-DUTY VEHICLE CLASSES

Adopted: [Insert date of adoption]

Note: This document, approved by the Air Resources Board at its March 27, 2008 hearing for incorporated by reference in California Code of Regulations (CCR), title 13, section 1962.1, was originally shown without underl ine as permitted by California Code of Regulations, title 1, section 8. The proposed m odifications to this document are

shown in underline to indicate additions and strike out to indicate deletions.45-day Notice 02/08/08

Hearing Date: 03/27/08 15-day Notice: 07/25/08 TABLE OF CONTENTS

Section Page

No.

A Applicability ................................

................................................... ....................A-1

B. Definitions .................................

................................................... .....................B-1

C. Zero-Emission Vehicle Standards ...............

................................................... .... C-1

1. ZEV Emission Standard........................... .............................................. C-1 2. Percentage ZEV Requirements. .................... ........................................ C-1 3. Partial ZEV Allowance Vehicles (PZEVs) .......... .................................. C-6 7 4. Qualification for ZEV Multipliers and Credits ... ................................ C-10 11 5. [Reserved] ...................................... ................................................. C- 13 15 6. [Reserved] ...................................... ................................................. C- 13 15 7. Generation and Use of ZEV Credits; Calculation o f Penalties......... C-13 15 8. Severability .................................... .................................................. C -17 20

9. Public Disclosure ............................... .............................................. C-1 7 20

D. Certification Requirements ....................

................................................... .......... D-1 1. Durability and Emission Testing Requirements .... ................................. D-1 2. Information Requirements: Application for Certif ication ........................ D-1 3. ZEV Reporting Requirements..................... ........................................... D-2

E. Test Procedures ................................

................................................... ................E-1 1. Electric Dynamometer ............................ ................................................E-1 2. Vehicle and Battery Break-In Period............. ..........................................E-1 3. All-Electric Range Test ......................... ..................................................E -1 4. Determination of Battery Specific Energy for ZEV s ................................E-3

5. Determination of the Emissions of the Fuel-fired Heater ........................E-3 6. Hybrid Electric Vehicle FTP Emission Test Provis ions ...........................E-3 7. Hybrid Electric Vehicle Highway Emission Test Pr ovisions ....................E-8 8. Hybrid Electric Vehicle SFTP Emission Test Provi sions.......................E-10 9. State-of-Charge Net Change Tolerances ........... ..................................E-1545-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 A,B-1 CALIFORNIA EXHAUST EMISSION STANDARDS AND TEST PRO CEDURES FOR 2009 AND SUBSEQUENT MODEL ZERO-EMISSION VEHICLES, A ND 2001 AND SUBSEQUENT MODEL HYBRID ELECTRIC VEHICLES, IN THE PASSENGER CAR,

LIGHT-DUTY TRUCK AND MEDIUM-DUTY VEHICLE CLASSES

A. Applicability

The emission standards and test procedures in this document are applicable to 2009 and subsequent model-year zero-emission passen ger cars, light-duty trucks and medium-duty vehicles, and 2001 and subsequent model -year hybrid electric passenger cars, light-duty trucks and medium-duty vehicles. T he general procedures and requirements necessary to certify a vehicle for sal e in California are contained in the

“California Exhaust Emission Standards and Test Pro cedures for 2001 and Subsequent Model Passenger Cars, Light-Duty Trucks and Medium- Duty Vehicles” (hereinafter “LDV/MDV TPs”), and apply except as amended herein. A manufacturer may elect to certify a 2000 model-year hybrid electric vehicle u nder these standards and test procedures and the LDV/MDV TPs.

B. Definitions

In addition to the following, these test procedures incorporate by reference the

definitions and abbreviations set forth in the Titl e 40 Code of Federal Regulations § 86.1803-01, the definitions and abbreviations set f orth in the LDV/MDV TPs, and the definitions set forth in section 1900, title 13, CC R.

“Advanced technology PZEV” or “AT PZEV” means any PZEV with an allowance greater than 0.2 before application of th e PZEV early introduction phase-in multiplier. “All-Electric Range Test” means a test sequence used to determine the range of an electric vehicle or of a hybrid electric vehi cle without the use of its auxiliary power unit. The All-Electric Range Test cycle consists o f the Highway Fuel Economy Schedule and the Urban Dynamometer Driving Schedule (see section E of these test procedures). “Auxiliary power unit” means a device that converts consumable fuel energ y into mechanical or electrical energy. Some example s of auxiliary power units are internal combustion engines, gas turbines, or fuel cells. “Battery electric vehicle” or “BEV” means any vehicle that operates solely by use of a battery or battery pack, or that is powere d primarily through the use of an electric battery or battery pack but uses a flywhee l or capacitor that stores energy produced by the electric motor or through regenerat ive braking to assist in vehicle operation. “Battery or Battery pack” means any electrical energy storage device consisting of any number of individual battery modu les or cells that is used to propel a45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 A,B-2 battery electric or hybrid electric vehicle. These terms may also generically refer to capacitor and flywheel energy storage devices in th e context of hybrid electric vehicles. “Battery state-of-charge” means the quantity of electrical energy remaining in the battery relative to the maximum rated capacity of the battery expressed in percent. “Charge-depleting” means that the battery of a hybrid electric vehicl e ultimately fully discharges and impairs vehicle operation as t he vehicle continuously operates over a given driving cycle when no off-vehicle charging is performed and the consumable fuel is regularly replenished. Hybrid electric veh icles are required to be classified as either charge-sustaining or charge-depleting over e ach driving cycle (i.e. UDDS, HFEDS, US06, or SC03). “Charge depletion range or R cd ” means the distance achieved by a hybrid electric vehicle on a specified driving cycle at th e point when the zero emission energy storage device is depleted of off-vehicle charge an d regenerative braking derived

energy. “Charge-sustaining” means that the battery of a hybrid electric vehicl e ultimately does not fully discharge and impair vehi cle operation as the vehicle continuously operates over a given driving cycle wh en no off-vehicle charging is performed and the consumable fuel is regularly repl enished. Hybrid electric vehicles are required to be classified as either charge-sust aining or charge-depleting over each driving cycle (i.e. UDDS, HFEDS, US06, or SC03).

“Consumable fuel” means any solid, liquid, or gaseous matter that re leases energy when consumed by an auxiliary power unit. “Electric drive system” means an electric motor and associated power electronics which provide acceleration torque to th e drive wheels sometime during normal vehicle operation. This does not include co mponents that could act as a motor, but are configured to act only as a generator or en gine starter in a particular vehicle application. “Electric range fraction” means the fraction of electrical energy derived fr om off-vehicle charging and regenerative braking energ y relative to total traction energy used over the charge depletion range on a specified drive cycle.

“Enhanced AT PZEV” means any PZEV that has an allowance of 1.0 or grea ter per vehicle without multipliers and makes use of a ZEV fuel “Equivalent all electric range” means the charge depletion range multiplied by the electric range fraction (EAER = R cd x ERF).

“Fuel-fired heater” means a fuel burning device that creates heat for the purpose of warming the passenger compartment of a v ehicle but does not contribute to the propulsion of the vehicle.

“HFEDS” means highway fuel economy driving schedule. See 40 CFR

 600.109(b). “Hybrid electric vehicle” or “HEV” means any vehicle that can draw propulsion energy from both of the following on-veh icle sources of stored energy: 1) a consumable fuel and 2) an energy storage device suc h as a battery, capacitor, or flywheel. “Neighborhood Electric Vehicle” or “NEV ” means a motor vehicle that meets the definition of “low-speed vehicle” either in sec tion 385.5 of the Vehicle Code or in 4945-day Notice 02/08/08

Hearing Date: 03/27/08 15-day Notice: 07/25/08 B-3 CFR 571.500 (as it existed on July 1, 2000), and is certified to zero-emission vehicle

standards. “Off-vehicle charge capable” means having the capability to charge a battery from an off-vehicle electric energy source that can not be connected or coupled to the vehicle in any manner while the vehicle is being dr iven.

“Placed in service” means having been sold or leased to an end-user an d not just to a dealer or other distribution chain entity , and having been individually registered for on-road use by the California Department of Mot or Vehicles.

“PZEV” means any vehicle that is delivered for sale in Ca lifornia and that qualifies for a partial ZEV allowance of at least 0 .2. “Regenerative braking” means the partial recovery of the energy normally dissipated into friction braking that is returned a s electrical current to an energy storage

device.

“SC03” means the U.S. EPA SC03 driving schedule represent ing vehicle operation with air conditioning, as set forth in Ap pendix I of 40 CFR Part 86. “SOC Net Change Tolerance” means the state-of-charge net change tolerance that is applied to the SOC Criterion for charge-sus taining hybrid electric vehicles when validating an emission test. See section D.8 of th ese procedures for tolerance specifications.

“SOC Criterion” means the state-of-charge criterion that is applie d to chargesustaining hybrid electric vehicle to validate an e mission test. The SOC Criterion requires that no net change in battery energy occur s over a given test cycle, i.e. the final battery state-of-charge that is recorded at t he end of the emission test must be equivalent to the initial battery state-of-charge t hat is set at the beginning of the emission test. The SOC Net Change Tolerance shall be applied to the SOC Criterion. “Type 0, I, I.5, II, III, and IV, and V ZEV” all have the meanings set forth in section C.4.4(a).

“US06” means the US06 driving schedule for aggressive dri ving as set forth in Appendix I of 40 CFR Part 86.

“UDDS” means urban dynamometer driving schedule as set fo rth Appendix I of

40 CFR Part 86.

“Zero-emission vehicle” or “ ZEV” means any vehicle certified to zero-emission

standards.

“Zero-emission VMT” means the vehicle miles traveled with zero exhaust emissions of any criteria pollutant (or precursor p ollutant).

“ZEV fuel” means a fuel that provides traction energy in on-ro ad ZEVs. Examples of current technology ZEV fuels include el ectricity, hydrogen, and compressed air.

C. Zero-Emission Vehicle Standards.

1. ZEV Emission Standard. The Executive Officer shall certify new 2009 and subsequent model passenger cars, light-duty tru cks and medium-duty vehicles as ZEVs if the vehicles produce zero exhaust emissions of any criteria pollutant (or precursor pollutant) under any and all possible ope rational modes and conditions.45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-4 2. Percentage ZEV Requirements

2.1 General Percentage ZEV Requirement.

(a) Basic Requirement. The minimum percentage ZEV requirement for each manufacturer is listed in the table below as the pe rcentage of the PCs and LDT1s, and LDT2s to the extent required by section C.2.2(c), p roduced by the manufacturer and delivered for sale in California that must be ZEVs, subject to the conditions in section

C.2.2.

Model Years Minimum ZEV Requirement

2009 through 2011 11 % 2012 through 2014 12 % 2015 through 2017 14 % 2018 and subsequent 16 %

(b) Calculating the Number of Vehicles to Which the Per centage ZEV Requirement is Applied. For the 2009 through 2011 model years, a A manufacturer’s production volume of PCs and LDT1s, and LDT2s as ap plicable, produced and delivered for sale in California to comply with a g iven model year ZEV requirement will

be based on the a three-year average of the manufacturer’s volume of PCs and LDT1s, and LDT2s as applicable, produced and delivered for sale in California in the prior fourth, fifth and sixth years (e.g. 2010 model

- year ZEV requirements will be based on California production volumes of PCs and LDT1s, and LDT2s as applicable, for the

2004 to 2006 2003 through 2005 model years) . For 2012 and subsequent model years, a manufacturer’s production volume for the given mo del year and two subsequent model years will be based on the three-year average of the manufacturer’s volume of PCs and LDT1s, and LDT2s, as applicable, produced a nd delivered for sale in California in the prior fourth, fifth and sixth yea rs [for example, 2013 model year ZEV requirements (for the 2013 through 2015 model years ) will be based on California production volumes of PCs and LDT1s, and LDT2s as a pplicable, for the 2007 to 2009 model years]. This production averaging is used to determine ZE V requirements only,

and has no effect on a manufacturer’s size determin ation. As an alternative to the three year averaging of prior year production descr ibed above, a manufacturer may elect to base its ZEV obligation on the number of P Cs and LDT1s, and LDT2s, as applicable, to the extent required by section C.2.1(c) produced by the manufacturer and delivered for sale in California that same model ye ar. A manufacturer may, on an annual basis, select either the three year average or the same model year calculation

method. In applying the ZEV requirement, a PC, LDT1, or LDT 2 as applicable, that is produced by a small volume one manufacturer (e.g., Manufacturer A) , but is marketed in California by another manufacturer (e.g., Manufactu rer B) under the other manufacturer’s (Manufacturer B) nameplate, shall be treated as having been produce d by the marketing manufacturer (Manufacturer B)

.45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-5 (c) Phase-in of ZEV Requirements for LDT2s. Beginning with the ZEV requirements for the 2009 model year, a manufacture r’s LDT2 production shall be included in determining the manufacturer’s overall ZEV requirement under section C.2.1(a) in the increasing percentages shown in the table below.

2009 2010 2011 2012+

51% 68% 85% 100%

(d) Exclusion of ZEVs in Determining a Manufacturer’s S ales Volume. In calculating for purposes of section C. 2.1(b) and (c) the volume of PCs, LDT1s and LDT2s a manufacturer has produced and delivered for sale in California, the manufacturer shall exclude the number of ZEVs produ ced by the manufacturer, or by a subsidiary in which the manufacturer has a greater than 50 percent ownership interest,

and delivered for sale in California.

2.2 Requirements for Large Volume Manufacturers.

(a) Primary Requirements for Large Volume Manufacturers through Model

Year 2011 . In the 2009 through 2011 model years, a large

- volume manufacturer must meet at least 22.5 percent of its ZEV requirement w ith ZEVs or ZEV credits generated by such vehicles, and at least another 22.5 percent with ZEVs, advanced technology

AT PZEVs, or credits generated by such vehicles. The remainder of the large

- volume manufacturer’s ZEV requirement may be met using PZE Vs or credits generated by

such vehicles.

(b) Alternative Requirements for Large Volume Manufactu rers.

(1) Minimum Floor for Production of Type III ZEVs.

(A) [ RESERVED]

(B) Requirement For the 2009-2011 Model Years. A large volume manufacturer electing to be subject to the alternative compliance requirements during model years 2009 through 2011 must produce, deliver for sale, and place in service in California enough 2009

- 2011 model

- year Type III ZEVs to generate ZEV credits equal

to sufficient to meet a cumulative percentage ZEV requ irement of 0. 80 0.82 percent of the manufacturers sales, using either production vo lume determination method described in section C.2.1(b) though production, de livery for sale, and placement in service of ZEVs, other than NEVs and Type 0s ZEVs, using credit ratios for each ZEV Type compared to a Type III prescribed in the table below,

, of the manufacturer’s average annual California sales of PCs

, and LDT1s over the three year period from model years 2003 through 2005, or submit an equivalent number of credits generated by such vehicles. The manufacturer may meet th is requirement with [i] 2009

- 2011

model

- year Type I or Type II ZEVs, provided that 2 Type I ZEVs or 1.33 Type II ZEVs or 0.8 Type IV ZEVs will equal one Type III ZEV45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-6 ZEV Types Credit Substitution Ratio Type I 2 Type I.5 1.6 Type II 1.33 Type IV 0.8 Type V 0.57

(i) Manufacturers may use credits generated by 199 7-2003 model-year ZEVs that qualify for an extended service multiplier und er section C.6 for a year primarily during calendar years 2009-2011, provided that 33 y ears of such a multiplier will equal

4 ZEV credits.

(ii) Manufacturers may elect, on an annual basis, to determine their alternative requirement using either production volume determin ation methods described in section C.2.1(b).

(C) [ RESERVED]

(D) [ RESERVED]

(E) [ RESERVED]

(F) Exclusion of Additional Credits for Transportation Systems. Any additional credits for transportation systems generated in acc ordance with section C.7.5 shall not be counted towards compliance with this section C.2 .2(b)(1)(B).

(G) Carry-over of Excess Credits. ZEV credits generated from excess production in model years 2005 through 2008 may be carried forward and applied to the 2009 through 2011 minimum floor requirement spe cified in 19 62.1(b)(2)(B)1.b. section C.2.2(b)(1)(B) provided that the value of these carryover credits shall be based on the model year in which the credits are used

. Beginning in 2012, these credits may no longer be used to meet the ZEV requirement; they may be used as Enhanced AT PZEV, AT PZEV, or PZEV credits. ZEV credits earned in model year 2009 and subsequent would be allowed to be carried forward f or two years for application to the ZEV requirement. For example, ZEV credit earned in 2010 would retain full flexibility through 2012, at which time that credit could only be used as Enhanced AT PZEV, AT PZEV, or PZEV credits, and could not be used to sat isfy the ZEV credit obligation, which may only be satisfied with credit generated f rom ZEVs.

(H) Failure to Meet Requirement for Production of Type II I ZEVs. A manufacturer that, after electing to be subject to the alternative requirements in section C.2.2(b) for any model year from 2009 throu gh 2011, fails to meet the requirement in section C.2.2(b)(1)(B) by the end of 2011 model year the specified three year period in which the m odel year falls , shall be treated as subject to the primary45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-7 requirements in section C.2.1(a) for 2009 through 2 011 model years. all model years in the specified three year period.

(I) Rounding Convention. The number of Type III ZEVs needed for a manufacturer under section C.2.2(b)(1)(B) shall be rounded to the nearest whole

number.

(2) Compliance With Percentage ZEV Requirements. In the 2009 through 2011 model years, a large volume manufacturer electing to be subject to the alternative compliance requirements in a given model year must meet at least 45 percent of its ZEV requirement for that model year with ZEVs, adva nced technology AT PZEVs or

Enhanced AT PZEVs , or credits generated from such vehicles. ZEV cre dits generated for compliance with the alternative requirements du ring any given model year will be applied to the 45 percent which may be met with ZEV s, AT PZEVs, Enhanced AT PZEVs, or credits generated from such vehicles, but not PZEVs. The remainder of the large volume manufacturer’s ZEV requirement may be met using PZ EVs or credits generated from such vehicles.

(3) Sunset of Alternative Requirements After the 2011 M odel Year. The alternative requirements in section C.2.2(b) are no t available after the 2011 model year.

(c) Election of the Primary or Alternative Requirements for Large Volume

Manufacturers. A large volume manufacturer shall be subject to the primary ZEV requirements for the 2009 model year unless it noti fies the Executive Officer in writing prior to the start of the 2009 model year that it i s electing to be subject to the alternative compliance requirements for that model year. There after, a manufacturer shall be subject to the same compliance option as applied in the previous model year unless it notifies the Executive Officer in writing prior to the start of a new model year that it is electing to switch to the other compliance option f or that new model year. However, a large volume manufacturer that has previously elected to be subj ect to the primary ZEV requirements for one or more of the 2009 through 2 011 model yearsin the three year period identified in section C.2.2(b)(1)(A)

- (D) may prior to the end of the 2011 model

year three year period elect to become subject to the alternative compliance requirements for 2009 through 2011 model years the full three year period upon a demonstration that it has complied with all of the applicable requirements for that period in section C.2.2(b)(1)(B).

(d) Requirements for Large Volume Manufacturers in Mode l Years 2012 through 2017.

.

(1) 2012 through 2014 Requirements. In the 2012 through 2017 model

years, a A large

- volume manufacturer must meet the total ZEV obligation total percent requirement as shown in the table below with ZEVs or ZEV credits generated by such vehicles, excluding NEVs and Type 0 ZEVs, equal to at least 0.81% of its annual sales, using either production volume determination method described in section C.2.1(b) No more than 50% of the total obligation may be met wi th PZEVs, No more than 75% of45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-8 the total obligation may be met with AT PZEVs. No more than 92.5% may be met with Enhanced AT PZEVs and NEVs, other than limits descr ibed in section C.7.6. The entire requirement may be met solely with ZEVs. Op tionally, a manufacturer may

choose to meet or exceed th e minimum ZEV floor and then stasify the remainder of the manufacturer requirement using Enhanced AT PZEVs, A T PZEVs, and PZEVs.

(2) 2015 through 2017 Requirements. A manufacturer must meet its ZEV with ZEVs or ZEV credits generated by such vehicles , excluding NEVs and Type 0 ZEVs, equal to at least 3% of its annual sales, usi ng either production volume determination method described in section C.2.1(b). No more than 42.8% of the total obligation may be met with PZEVs, No more than 57. 1% of the total obligation may be met with AT PZEVs. No more than 78.5% may be met w ith Enhanced AT PZEVs and NEVs, other than limits described in section C.7.6. The entire requirement may be met solely with ZEVs.

(3) The following table enumerates a manufacturer’s ann ual percentage obligation for 2012 though 2017 if they were to pro duce the minimum number of credits to meet the ZEV obligation and the total annual percent ZEV requirement and the maximum component percentages for the optional Enhanced AT PZEV, AT PZEV, and PZEV categories that may be used to meet the total percentage ZEV requirement

.

Years Total ZEV

Percent Requirement Minimum

ZEV floor percentage

range Enhanced

AT PZEVs

or NEVs percentage

range AT PZEVs PZEVs up to

2012 – 2014 12 0.81 0.3

– 3.0 2.19 0.0

–

2.7 3.0 6.0

2015 – 2017 14 3.0 – 6.0 0.0

– 3.0 2.0 6.0

(4) Exclusion of Additional Credits for Transportation Systems. Any additional credits for transportation systems gener ated in accordance with section C.7.5 shall not be counted towards compliance with the po rtion of the ZEV obligation which must be met with ZEVs, specified in section C.2.2(d )(1).

(e) Requirements for Large Volume Manufacturers in Mode l Year 2018 and Subsequent. In the 2018 and subsequent model years, a large

- volume manufacturer must meet a ZEV total percent requirement of 16 per cent. The maximum portion of a large volume manufacturer’s percentage ZEV requirement that may be satisfied by

PZEVs that are not Enhanced AT PZEVs or advanced technology AT PZEVs, or credits generated by such vehicles, is limited to 6 percent of the manufacturer’s applicable California PC, LDT1, and LDT2 production volume; En hanced AT PZEVs and AT advanced technology PZEVs or credits generated by such vehicles may be used either alone or in combination, to meet up to one-half of the manufacturer’s remain ing ZEV45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-9 requirement.

2.3 Requirements for Intermediate Volume Manufactur ers. In 2009 and subsequent model years, an intermediate volume manu facturer may meet its ZEV requirement with up to 100 percent PZEVs or credits generated by such vehicles.

2.4 Requirements for Small Volume Manufacturers and Independent Low

Volume Manufacturers. A small volume manufacturer or an independent lo w volume manufacturer is not required to meet the percentage ZEV requirements. However, a small volume manufacturer or an independent low vol ume manufacturer may earn and market credits for the ZEVs or PZEVs it produces an d delivers for sale in California.

2.5 Counting ZEVs and PZEVs in Fleet Average NMOG Calcu lations . For purposes of calculating a manufacturer’s fleet aver age NMOG value and NMOG credits under sections 1960.1(g)(2) and 1961(b) and (c), title 13, CCR, a vehicle certified as a ZEV is counted as one ZEV, and a PZEV is counted as one SULEV certified to the 150,000 mile standards, regardless of any ZEV or PZ EV multipliers.

2.6 [RESERVED]

.

2.7 Changes in Small Volume, Independent Low Volume , and

Intermediate Volume Manufacturer Status.

(a) Increases in California Production Volume. In 2009 and subsequent model years, if a small volume manufacturer’s average Cal ifornia production volume exceeds 4,500 units of new PCs, LDTs, and MDVs based on the average number of vehicles produced and delivered for sale for the three previ ous consecutive model years, or if an independent low volume manufacturer’s average Calif ornia production volume exceeds 10,000 units of new PCs, LDTs, and MDVs based on th e average number of vehicles produced and delivered for sale for the three previ ous consecutive model years, the manufacturer shall no longer be treated as a small volume, or independent low volume manufacturer, as applicable, and shall comply with the ZEV requirements for independent low volume or intermediate volume manufacturers, as applicable, beginning with the sixth model year after the last of the three consecutive model years.

If an intermediate volume manufacturer’s average Ca lifornia production volume exceeds 60,000 units of new PCs, LDTs, and MDVs bas ed on the average number of vehicles produced and delivered for sale for the th ree previous consecutive model years (i.e., total production volume exceeds 180,00 0 in a three year period) , the manufacturer shall no longer be treated as an inter mediate volume manufacturer and shall, beginning with the sixth model year after th e last of the three consecutive model

years, meet the ZEV requirements with PZEVs, of which at l east one

- fourth would have to be AT PZEVs and shall, beginning with the ninth model year after the last of the three consecutive model years, meet t he ZEV regulation requirements with PZEVs, of

which at least one

- third would have to be AT PZEVs. The manufacturer would comply with all ZEV requirements for large volume manufact urers beginning with the45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-10 twelfth sixth model year after the last of the three consecutive model years

.

Requirements will begin in the fourth model year ra ther than the sixth model

year The lead time shall be four rather than six years where a manufacturer ceases to

be a small or intermediate volume manufacturer in 2 003 or subsequent years due to the aggregation requirements in majority ownership situ ations, except that if the majority ownership in the manufacturer was acquired prior to the 2001 model year, the manufacturer must comply with the stepped-up ZEV re quirements starting in the 2010 model year.

(b) Decreases in California Production Volume. If a manufacturer’s average California production volume falls below 4,500, 10, 000 or 60,000 units of new PCs, LDTs, and MDVs, as applicable, based on the average number of vehicles produced and delivered for sale for the three previous conse cutive model years, the manufacturer shall be treated as a small volume, independent low volume, or intermediate volume manufacturer, as applicable, and shall be subject t o the requirements for a small volume, independent low volume, or intermediate vol ume manufacturer beginning with the next model year. In determining small volume m anufacturer status, vehicles produced by one manufacturer and marketed in Califo rnia by another manufacturer

under th e other manufacturer’s nameplate shall be treated a s part of the California production volume of the sal es of the marketing manufacturer.

(c) Calculating California Production Volume in Change of Ownership Situations. Where a manufacturer experiences a change in owners hip in a particular model year, the change will affect application of the aggregati on requirements on the manufacturer starting with the next model year. The manufacture r’s small or intermediate volume manufacturer status for the next model year shall b e based on the average California production volume in the three previous consecutive model years of those manufacturers whose production volumes must be aggr egated for that next model year. For example, where a change of ownership during th e 2010 model year results in a requirement that the production volume of Manufactu rer A be aggregated with the production volume of Manufacturer B, Manufacturer A ’s status for the 2011 model year will be based on the production volumes of Manufact urers A and B in the 2008-2010 model years. Where the production volume of Manufa cturer A must be aggregated with the production volumes of Manufacturers B and C for the 2010 model year, and during that model year a change in ownership eliminates th e requirement that Manufacturer B’s production volume be aggregated with Manufactur er A’s, Manufacturer A’s status for the 2011 model year will be based on the produc tion volumes of Manufacturers A and C in the 2008-2010 model years. In either case , the lead time provisions in

section C 2.5 7 (a) and (b) will apply.45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-11 3. Partial ZEV Allowance Vehicles (PZEVs).

3.1 Introduction

. This section C.3 sets forth the criteria for iden tifying

vehicles delivered for sale in California as PZEVs. A PZEV is a vehicle that cannot be certified as a ZEV but qualifies for a PZEV allowan ce of at least 0.2.

3.2 Baseline PZEV Allowance

. In order for a vehicle to be eligible to receive a PZEV allowance, the manufacturer must demonstrate compliance with all of the following requirements. A qualifying vehicle will receive a baseline PZEV allowance of

0.2.

(a) SULEV Standards. Certify the vehicle to the 150,000-mile SULEV

exhaust emission standards for PCs and LDTs in sect ion 1961(a)(1), title 13, CCR. Bifuel, fuel-flexible and dual-fuel vehicles must cer tify to the applicable 150,000-mile SULEV exhaust emission standards when operating on both fuels;

(b) Evaporative Emissions. Certify the vehicle to the evaporative emission standards in section 1976(b)(1)(E), title 13, CCR z ero-fuel evaporative emissions standards);

(c) OBD. Certify that the vehicle will meet the applicable on-board diagnostic requirements in sections 1968.1 or 1968.2, title 13 , CCR, as applicable, for 150,000 miles; and

(d) Extended Warranty. Extend the performance and defects warranty perio d set forth in sections 2037(b)(2) and 2038(b)(1 2 ) to 15 years or 150,000 miles, whichever occurs first, except that the time period is to be 10 years for a zero emission energy storage device used for traction power (such as a battery, ultracapacitor, or other electric storage device).

3.3 Zero-Emission VMT PZEV Allowance

.

(a) Calculation of Zero Emission VMT Allowance. A vehicle that meets the requirements of section C.3.2 and has zero-emission vehicle miles traveled (“VMT”) capability will generate an additional zero emissio n VMT PZEV allowance, calculated as

follows:45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-12 Urban Equivalent All

- Electric Range (EAER)R cda Zero-emission VMT Allowance

EAER < 10 miles 0.0

EAER >10 miles

and

R cda = 10 miles to 100 40 miles EAER x (1 – UF Rcda )/14.6 11.028

R cda > 100 40 miles 1.58

EAER 40 / 29.63

The urban equivalent all-electric range (EAER) and urban charge depletion range actual (R cda ) shall be determined in accordance with section

E.3.2.1 (2)(a) of these test procedures. The U u tility F f actor (UF) based on the charge depletion range actual (R cda ) shall be determined according to the 0

- 100 mile 4th order

curve fit from SAE J1711 J2841 PropDft 2008. , issued March 1999, p5 2.

(b) Alternative Procedures. As an alternative to determining the zeroemission VMT allowance in accordance with the prece ding section C.3.3(a), a manufacturer may submit for Executive Officer appro val an alternative procedure for determining the zero-emission VMT potential of the vehicle as a percent of total VMT, along with an engineering evaluation that adequatel y substantiates the zero-emission VMT determination. For example, an alternative pro cedure may provide that a vehicle with zero-emissions of one regulated pollutant (e.g ., NOx) and not another (e.g., NMOG) will qualify for a zero-emission VMT allowanc e of 1.5.

(c) [RESERVED].

3.4 PZEV Allowance for Advanced ZEV Componentry . A vehicle that meets the requirements of section C.3.2 may qualify for an advanced componentry PZEV allowance as provided in this section 3.4.

(a) Use of High Pressure Gaseous Fuel or Hydrogen Stora ge System. A vehicle equipped with a high pressure gaseous fuel storage system capable of refueling at 3600 pounds per square inch or more and operatin g exclusively on this gaseous fuel shall qualify for an advanced componentry PZEV allo wance of 0.2. A vehicle capable of operating exclusively on hydrogen stored in a hi gh pressure system capable of refueling at 5000 3600 pounds per square inch or more, or stored in nonga seous form, shall instead qualify for an advanced componentry P ZEV allowance of 0.3.

(b) Use of a Qualifying HEV Electric Drive System45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-13 (1) Classification of HEVs. HEVs qualifying for additional advanced componentry PZEV allowance or allowances that may b e used in the AT PZEV category are classified in one of four types of HEV s based on the criteria in the following table. HEVs must qualify for the Zero-Em ission VMT Allowance in section

C .3.3(a). of this document and achieve 10 miles or more of all elect ric UDDS range in addition to meeting the requirements in the followi ng table to qualify for Type F advanced componentry allowance.

Characteristics Type C Type D Type E Type F Type G

Electric Drive System Peak Power Output ≥ 10 kW ≥ 10 kW ≥ 50 kW Zero Emission

VMT allowance; ≥
10 mile

all-electric range (UDDS drive cycle) Zero-Emission

VMT allowance;

≥ 10 mile all-electric range (US06 drive cycle)

Traction Drive System Voltage < 60 Volts ≥ 60

Volts ≥ 60

volts ≥ 60 volts ≥ 60 volts

Traction Drive

Boost Yes Yes Yes Yes Yes

Regenerative Braking Yes Yes Yes Yes Yes

Idle Start/Stop Yes Yes Yes Yes Yes

(2) [RESERVED].

(3) [RESERVED].

(4) Type C HEVs. A PZEV that the manufacturer demonstrates to the

reasonable satisfaction of the Executive Officer me ets all of the criteria for a Type C HEV, and that is equipped with an advanced traction energy storage system – such as lithium ion batteries, nickel metal-hydride batteri es, ultracapacitors, or other similar systems – with a design lifetime of at least 10 yea rs, qualifies for an additional advanced componentry allowance of 0.2 in the 2009 t hrough 2011 model years, 0.15 in the 2012 through 2014 model years, and 0.1 in the 2 015 and subsequent model years.

(5) Type D HEVs. A PZEV that the manufacturer demonstrates to the

reasonable satisfaction of the Executive Officer me ets all of the criteria for a Type D HEV qualifies for an additional advanced componentr y allowance of 0.4 in the 200945-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-14 through 2011 model years, 0.35 in the 2012 through 2014 model years, and 0.25 in the 2015 and subsequent model years.

(6) Type E HEVs. A PZEV that the manufacturer demonstrates to the

reasonable satisfaction of the Executive Officer me ets all of the criteria for a Type E HEV qualifies for an additional advanced componentr y allowance of 0.5 in the 2009 through 2011 model years, 0.45 in the 2012 through 2014 model years, and 0.35 in the 2015 and subsequent model years.

(7) Type F HEVs. A PZEV that the manufacturer demonstrates to the

reasonable satisfaction of the Executive Officer me ets all of the criteria for a Type F HEV, including achieving 10 miles or more of all-el ectric UDDS range, qualifies for an additional advanced componentry allowance of 0.8 5 72 in the 2009 through 2011 model years, 0.8 67 in the 2012 through 2014 model years, and 0.7 57 in the 2015 and subsequent model years.

(8) Type G HEVs. A PZEV that the manufacturer demonstrates to the

reasonable satisfaction of the Executive Officer me ets all of the criteria for a Type G HEV, including achieving 10 miles or more of all-el ectric US06 range, qualifies for an additional advanced componentry allowance of 0.95 i n the 2009 through 2011 model years, 0.8 9 in the 2012 through 2014 model years, and 0.7 8 in the 2015 and subsequent model years.

(8) (9) Severability. In the event that all or part of section C.3.4(b) (1)-(7) is found invalid, the remainder of these standards and test procedures, including the remainder of section C.3.4(b)(1)-(7), remains in full force a nd effect.

3.5 PZEV Allowance for Low Fuel-Cycle Emissions. A vehicle that makes exclusive use of fuel(s) with very low fuel-cycle e missions shall receive a PZEV

allowance of 0.3. In order to receive the PZEV low fuel-cycle emissions allowance, a

manufacturer must demonstrate to the Executive Offi cer, using peer-reviewed studies or other relevant information, that NMOG emissions associated with the fuel(s) used by the vehicle (on a grams/mile basis) are lower than or equal to 0.01 grams/mile. Fuelcycle emissions must be calculated based on near-te rm production methods and infrastructure assumptions, and the uncertainty in the results must be quantified.

3.6 Calculation of PZEV Allowance.

(a) Calculation of Combined PZEV Allowance for a Vehicl e . The combined PZEV allowance for a qualifying vehicle in a partic ular model year is the sum of the PZEV allowances listed in this section C.3.6, multi plied by any PZEV introduction phase-in multiplier listed in section C.3.7, subjec t to the cap in section C.3.6(b).

(1) Baseline PZEV Allowance. The baseline PZEV allowance of 0.2 for vehicles meeting the criteria in section C.3.2;45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-15 (2) Zero Emission VMT PZEV Allowance. The zero-emission VMT PZEV allowance, if any, determined in accordance with se ction C.3.3.;

(3) Advanced ZEV Componentry PZEV Allowance. The advanced ZEV componentry PZEV allowance, if any, determined in a ccordance with section C.3.4; and

(4) Fuel-cycle Emissions PZEV Allowance. The fuel-cycle emissions PZEV allowance, if any, determined in accordance with se ction C.3.5.

(b) Caps on the Value of an AT PZEV Allowance.

(1) Cap for 2012 2009 and Subsequent Model-Year Vehicles. The maximum value an AT PZEV may earn before phase-in multiplie rs, including the baseline PZEV allowance, is 3.0.

(2) [RESERVED].

3.7 PZEV Multipliers

(a) [RESERVED].

(b) Introduction Phase-In Multiplier for PZEVs That Ear n a Zero Emission

VMT Allowance . Each 2009 through 2011 model year PZEV that earn s a zero emission VMT allowance under section C.3.3 and is p roduced and delivered fo r sale in

California sold to a California motorist or is leased for thre e or more years to a California motorist who is given the option to purc hase or re-lease the vehicle for two years or more at the end of the first lease term, qualifies for a phase-in multiplier of

3.0 1.25.

4. Qualification for ZEV Multipliers and Credits.

4.1 [RESERVED].

4.2 [RESERVED].

4.3 [RESERVED].

4.4 ZEV Credits for 2009 and Subsequent Model Years.

(a) ZEV Tiers for Credit Calculations . ZEV credits from a particular ZEV are based on the assignment of a given ZEV into one of the following six eight ZEV tiers:45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-16

ZEV Tier UDDS ZEV

Range (miles) Fast Refueling Capability

NEV No minimum N/A

Type 0 < 50 N/A

Type I ≥ 50, <75 N/A

Type I.5 ≥ 75, <100 N/A

Type II ≥ 100 N/A

Type III ≥ 100 Must be capable of replacing 95 % maximum rated energy capacity in

≤ 10 minutes per section 4.4(b)

OR ≥ 200 N/A

≥ 100 Must be capable of

replacing 95 miles (UDDS ZEV range) in ≤ 10 minutes per section C.4.4(b) Type III

≥ 200 N/A

Type IV ≥ 200 Must be capable of replacing 190 miles (UDDS ZEV range) in ≤ 10 15 minutes per section 1962.1(d)(5)(B) C.4.4(a)

Type V ≥ 300 Must be capable of replacing 285 miles (UDDS ZEV range) in ≤ 15 minutes per section C.4.4(a)

(b) Fast Refueling . The “fast refueling capability” requirement for a 2009 and subsequent model-year Type III, or IV, or V ZEV in section 1962(d)(5)(A) C.4.4.(a) will be considered met if the Type III ZEV has the capab ility to accumulate at least 95 miles of UDDS range in 10 minutes or less and the Type IV or V ZEV has the capability to

accumulate at least 190 or 285 miles, respectively 15 minutes or less.

(c) ZEV Credits for 2009 and Subsequent Model-Year ZEVs

. A 2009 and subsequent model-year ZEV, other than a NEV or Type 0, earns 1 ZEV credit when it is produced and delivered for sale in California. A 2 009 and subsequent model-year ZEV earns additional credits based on the earliest year in which the ZEV is placed in service (not earlier than the ZEV’s model year). The follo wing table identifies the total credits

that a ZEV in each of the six eight ZEV tiers will earn, including the credit not cont ingent on placement in service, if it is placed in service in the specified model year or by June 30 after the end of the specified calendar year.45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-17



### Total Credit Earned by ZEV Type and Model Year for Production and Delivery for Sale and for Placemen t

Tier Year in Which ZEV is Placed in Service

2009-2017 2018+

NEV 0.30 0.30

Type 0 1 1

Type I 2 2

Type I.5 2.5 2.5

Type II 3 3

Type III 4 3

Type IV 5 3

Type V 7 3

(d) Multiplier for Certain Type I and Type II ZEVs

. A 2009 through 2011 model-year Type I and Type II ZEVs, excluding NEVs or Type 0 ZEVs, shall qualify for a multiplier of 1.25 if it is either sold to a moto rist or is leased for three or more years to a motorist who is given the option to purchase or r e-lease the vehicle for two years or

more at the end of the first lease term.

(e) Counting Specified ZEVs Placed in a Section 177 Sta te. As specified in the table below, s S pecified model year Type I, I.5, II, III, or IV ZEVs, excluding NEVs and Type 0 ZEVs, that are either certified to the California ZEV standards or part o f an advanced technology demonstration program and are placed in service in California or in a state that is administering the California ZEV requirements pursuant to section 177 of the federal Clean Air Act (42 U.S.C. § 7507) (he reafter “section 177 state”) applicable for the ZEV’s model year may be counted towards com pliance in California and in any section 177 state, with the California percentage ZEV requirements in section C.2 including the requirements in section C.2.2(b) and (d) , provided that the credits are multiplied by the ratio of an LVM’s total sales in the state receiving credit to the LVM’s total sales in California. The table below specifi es the qualifying model years for each ZEV type that may be counted towards compliance in any section 177 state as if they

were delivered for sale and placed in service in California. Sim ilarly, specified model year Type I, I.5, II, III or IV ZEVs that are certi fied to the California ZEV standards and45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-18 are placed in service in California may be counted towards the percentage ZEV requirement s of any state that is administering the California ZEV requirements pursuant to section 177 of the federal Clean Air Ac t, including requirements based on section C.2.2(b)

.

Vehicle Type Through Model

Years :
Type I, I.5, or II ZEV 2009 – 2014

Type III or

, IV, or V

ZEV 2009 – 2017

(f) NEV Test Procedures. Beginning in 2010 model year, to be eligible for th e credit amount in section C.4.4.(c), NEVs must meet the following specifications and requirements in this section C.4.4(f):

(1) Specifications. A 2010 and subsequent model-year NEV, earns credi t when it meets all the following specifications:

(A) Acceleration. The vehicle has a 0-20 mph acceleration of 6.0 se conds or less when operating with a payload of 332 pounds an d starting with the battery at a 50% state of charge.

(B) Top Speed. The vehicle has a minimum top speed of 20 mph whe n operating with a payload of 332 pounds and starting with the battery at a 50% state of charge. The vehicle’s top speed shall not exceed 2 5 mph when tested in accordance with 49 CFR 571.500 (68 FR 43972, July 25, 2003).

(C) Constant Speed Range. The vehicle has a minimum 25 mile range when operating at constant top speed with a payload of 3 32 pounds and starting with the battery at 100% state of charge.

(2) Battery Requirement . A qualifying NEV must be equipped with sealed,

maintenance-free batteries.

(3) Warranty Requirement . A NEV drive train, including battery packs, must

be covered at least 6 months of the first 12 months of the NEV coverage period shall be a full warranty; the remainder of the first 12 mont hs and all of the second 12 months of the coverage period may be covered under optional ( available for purchase) extended warranties and may be prorated. If the extended wa rranty is prorated, the percentage of the battery pack's original value to be covered or refunded must be at least as high as the percentage of the prorated coverage period s till remaining. For the purpose of this computation, the age of the battery pack must be expressed in intervals no larger than three months. Alternatively, a manufacturer m ay cover 50 percent of the original45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-19 value of the battery pack for the full period of th e extended warranty.

(4) Prior to allowance approval, the Executive Officer may request that the manufacturer provide copies of representative vehic le and battery warranties.

5. [ Reserved]

6. [Reserved] Extended Service Multiplier for 1997-2003 Model-Yea r
ZEVs and PZEVs With ≥ 10 Mile Zero Emission Range. Except in the case of a NEV, an additional ZEV or PZEV multiplier will be e arned by the manufacturer of a 1997 through 2003 model-year ZEV, or PZEV with ≥ 10 mile zero emission range for each full year it is registered for operation on pu blic roads in California beyond its first three years of service, in the 2009 through 2011 ca lendar years. For additional years of service starting earlier than April 24, 2003, th e manufacturer will receive 0.1 times the ZEV credit that would be earned by the vehicle if i t were leased or sold new in that year, including multipliers, on a year-by-year basis begi nning in the fourth year after the vehicle is initially placed in service. For additi onal years of service starting April 24, 2003 or later, the manufacturer will rece ive 0.2 times the ZEV credit that would be earned by the vehicle if it were leased or sold new in that year, including multipliers, on a year-by-year basis beginning in the fourth yea r after the vehicle is initially placed in service. The extended service multiplier is report ed and earned in the year following each continuous year of service. Additional credit cannot be earned after model year

2011.

7. Generation and Use of ZEV Credits; Calculation o f Penalties

7.1 Introduction. A manufacturer that produces and delivers for sale in California ZEVs or PZEVs in a given model year exce eding the manufacturer’s ZEV requirement set forth in section C.2 shall earn ZEV credits in accordance with this

section C.7.

7.2 ZEV Credit Calculations.

(a) Credits from ZEVs . The amount of g/mi ZEV credits earned by a manufacturer in a given model year from ZEVs shall be expressed in units of g/mi NMOG, and shall be equal to the number of credits f rom ZEVs produced and delivered for sale in California that the manufacturer applie s towards meeting the ZEV requirements for the model year subtracted from the number of ZEVs produced and delivered for sale in California by the manufacture r in the model year and then multiplied by the NMOG fleet average requirement fo r PCs and LDT1s, or LDT2s as applicable, for that model year.

(b) Credits from PZEVs. The amount of g/mi ZEV credits from PZEVs earned by a manufacturer in a given model year shall be ex pressed in units of g/mi NMOG, and45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-20 shall be equal to the total number of PZEV allowanc es from PZEVs produced and

delivered for sale in California that the manufactu rer applies towards meeting its ZEV requirement for the model year subtracted from the total number of PZEV allowances from PZEVs produced and delivered for sale in Calif ornia by the manufacturer in the model year and then multiplied by the NMOG fleet av erage requirement for PCs and LDT1s, or LDT2s as applicable, for that model year.

(c) Separate Credit Accounts. The number of credits from a manufacturer’s [i] ZEVs, [ii] enhanced AT PZEVs, [iii] advanced technology AT PZEVs, and [ii iv ] all other PZEVs, and [v] NEVs shall each be maintained separately.

7.3 ZEV Credits for MDVs and LDTs Other Than LDT1s . ZEVs and PZEVs classified as MDVs or as LDTs other than LDT1s may be counted toward the ZEV requirement for PCs, LDT1s and LDT2s as applicable, and included in the calculation of ZEV credits as specified in this section C.4 if the manufacturer so designates.

7.4 ZEV Credits for Advanced Technology Demonstrati on Programs . In model years 2009 through 2014, a vehicle ZEVs and Enhanced AT PZEVs , other than

a excluding NEVs , which is placed in a California advanced technology demonst ration program for a period of two or more years, may earn ZEV credits even if it is not “delivered for sale” or registered with the Califor nia Department of Motor Vehicles (DMV). To earn such credits, the manufacturer must demonstrate to the reasonable

satisfaction of the Executive Officer that the vehi cles will be regularly used in applications appropriate to evaluate issues related to safety, infrastructure, fuel specifications or public education, and that for 50 percent or more of the first two years of placement the vehicle will be situated operated in California. Such a vehicle is eligible

to receive the same allowances and credits that it would have earned if placed in service. To determine vehicle credit, the model-ye ar designation for a demonstration vehicle shall be consistent with the model-year des ignation for conventional vehicles placed in the same timeframe. Manufacturers may ea rn credit for as many as six 25 vehicles per model, per ZEV state, per year under this section C.7.4. A manufacturer’s

vehicles in excess of the six 25

- vehicle cap will not be eligible for advanced techn ology demonstration program credits.

7.5 ZEV Credits for Transportation Systems

.

(a) General. In model years 2009 and subsequent, a ZEV placed, for two or more years, as part of a transportation system may earn additional ZEV credits, which may used in the same manner as other credits earned by vehicles of that category, except as provided in section C.7.5(c) below. In m odel years 2009 through 2011, an

advanced technology Enhanced AT PZEV, AT PZEV or PZEV placed as part of a transportation system may earn additional ZEV credi ts, which may be used in the same manner as other credits earned by vehicles of that category, except as provided in section C.7.5(c) below. A NEV is not eligible to e arn credit for transportation systems. To earn such credits, the manufacturer must demonst rate to the reasonable satisfaction45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-21 of the Executive Officer that the vehicle will be u sed as a part of a project that uses an innovative transportation system as described in se ction C.7.5(b) below.

(b) Credits Earned. In order to earn additional credit under this sect ion C.7.5, a project must at a minimum demonstrate [i] shared use of ZEVs, Enhanced AT PZEVs, AT PZEVs or PZEVs, and [ii] the application of “int elligent” new technologies such as reservation management, card systems, depot management, location management, charge billing and real-time wireless i nformation systems. If, in addition to factors [i] and [ii] above, a project also featu res linkage to transit, the project may receive further additional credit. For ZEVs only, not including NEVs, a project that features linkage to transit, such as dedicated park ing and charging facilities at transit stations, but does not demonstrate shared use or th e application of intelligent new technologies, may also receive additional credit fo r linkage to transit. The maximum credit awarded per vehicle shall be determined by t he Executive Officer, based upon an application submitted by the manufacturer and, if a ppropriate, the project manager.

The maximum credit awarded shall not exceed the fol lowing:

Type of

Vehicle Model Year Shared Use, Intelligence Linkage to

Transit
PZEV through 2011 2 1
AT PZEV through 2011 4 2

Enhanced AT

PZEV 2009 through 2011 4 2

ZEV 2009 through 2011 6 3

Enhanced AT

PZEV 2012 and

subsequent 1 1

ZEV 2012 and

subsequent 2 1

(c) Cap on Use of Credits.

(1) ZEVs. Credits earned or allocated by ZEVs pursuant to t his section C.7.5, not including all credits earned by the vehicle its elf, may be used to satisfy up to onetenth of a manufacturer’s ZEV obligation in any giv en model year.

(2) Enhanced AT PZEVs . Credits earned or allocated by Enhanced AT PZEVs pursuant to this section C.7.5, not including all credits earned by the vehicle itself, may be used to satisfy up to one-tenth of a manufacturer’s ZEV obligation in any given model year, but may only be used in the same manner as other credits earned by vehicles of that category.

(2) (3) AT PZEVs. Credits earned or allocated by AT PZEVs pursuant to this section C.7.5, not including all credits earned by the vehicle itself, may be used to satisfy up to one-twentieth of a manufacturer’s ZEV obligation in any given model year,45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-22 but may only be used in the same manner as other cr edits earned by vehicles of that category.

(3) (4) PZEVs. Credits earned or allocated by PZEVs pursuant to this section C.7.5, not including all credits earned by the vehi cle itself, may be used to satisfy up to one-fiftieth of the manufacturer’s ZEV obligation i n any given model year, but may only

be used in the same manner as other credits earned by vehicles of that category.

(d) Allocation of Credits. Credits shall be assigned by the Executive Officer to the project manager or, in the absence of a separat e project manager, to the vehicle manufacturers upon demonstration that a vehicle has been placed in a project. Credits shall be allocated to vehicle manufacturers by the Executive Officer in accordance with a recommendation submitted in writing by the projec t manager and signed by all manufacturers participating in the project, and nee d not be allocated in direct proportion to the number of vehicles placed.

7.6 Use of ZEV Credits . A manufacturer may meet the ZEV requirements in any given model year by submitting to the Executive Officer a commensurate amount of g/mi ZEV credits, consistent with section C.2. Cre dits in each of the categories may be used to meet the requirement for that category as w ell as the requirements for lesser credit earning ZEV categories, but shall not be use d to meet the requirement for a greater credit earning ZEV category. For example, credits produced from Enhanced AT PZEVs may be used to comply with AT PZEV requiremen ts, but not with the portion that must be satisfied by ZEVs. These credits may be earned previously by the manufacturer or acquired from another party, except that

.

(a) NEVs. Cc redits earned from NEVs offered for sale or placed in service in model years 2001 through 2005 cannot be used to sat isfy more than the percentage limits described in the following table: 50 percent of a manufacturer’s percentage ZEV obligation t hat may only be satisfied with credits from ZEVs. The manufacturer’s percentage ZEV obligation that may be satisfied by credits from AT PZEVs but not

PZEVs is listed in the table below:

AT PZEV Category

2009 2010 and

beyond

75% 50%

Years ZEV Obligation that: Percent limit for NEVs

allowed to meet each Obligation:

2009 –

2011 Must be met with ZEVs 50%45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-23 2009 75%

2010 –

2011 May be met with AT PZEVs but not PZEVs 50%

2009 –

2011 May be met with PZEVs No Limit

Must be met with ZEVs 0%

May be met with Enhanced AT PZEVs and

AT PZEVs 50% 2012 –

2014

May be met with PZEVs No Limit

Additionally, credits earned from NEVs offered for sale or placed in service in model years 2006 or later can be used to the percentage l imits described in the following

table:

Years ZEV Obligation that: Percent Limit for NEVs

allowed to meet each Obligation:

May be met through compliance with Primary Requirements No Limit

May be met through compliance with Alternative Requirements, and must be met

with ZEVs 0% 2009 -

2011

May be met through compliance Alternative

Requirements, and may be met with AT

PZEVs or PZEVs No Limit

Must be met with ZEVs 0% 2012 –

2014 May be met with Enhanced AT PZEVs, AT

PZEVs, or PZEVs No Limit

This limitation applies to credits earned in model years 2001 through 2005 by the same manufacturer or earned in model years 2001 through 2005 by another manufacturer and acquired. The amount of g/mi ZEV credits requi red to be submitted shall be calculated according to the criteria set forth in this section C.7

.

(b) Carry forward provisions for LVMs. ZEV credits generated from excess production in model years 2009 and subsequent, incl uding those acquired from another party, may be carried forward and applied to the ZE V minimum floor requirement specified in section C.2.2(b)(1)(B) and (d) for two subsequent model years. Beginning with the third subsequent model year, those earned ZEV credits may no longer be used45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-24 to satisfy the manufacturer’s percentage ZEV obliga tion that may only be satisfied by credits from ZEVs, but may be used to satisfy the m anufacturer’s percentage ZEV obligation that may be satisfied by credits from En hanced AT PZEVs, AT PZEVs, or PZEVs. For example, ZEV credit earned in 2010 woul d retain full flexibility through 2012, at which time that credit could only be used as Enhanced AT PZEV, AT PZEV, or

PZEV credits.

(c) Carry forward provisions for manufacturers other than LVMs. ZEV credits generated from 2009 and subsequent model year produ ction by manufacturers that are not LVMs may be carried forward by the manufacturer producing the ZEV credit until the manufacturer becomes subject to the LVM require ments, after the transition period permitted in section C.2.7(a). When subject to the LVM requirements, a manufacturer must comply with the provisions of section C.7.6(b)

.

ZEV credits traded by a manufacturer other than a L VM to any other manufacturer, including a LVM, are subject to section C.7.6(b), b eginning in the model year in which they were produced (e.g., a 2009 model year ZEV cre dit traded in calendar year 2010 can only be applied towards the portion of the manu facturer’s requirement that must be met with ZEVs through model year 2011; beginning in model year 2012, the credit can only be applied to the portion of the manufacturer’ s requirement that may be met with Enhanced AT PZEVs, AT PZEVs, or PZEVs).

7.7 Requirement to Make Up a ZEV Deficit

.

(a) General

. A manufacturer that produces and delivers for sa le in California fewer ZEVs than required in a given model year shal l make up the deficit by the end of the third model year by submitting to the Executive Officer a commensurate amount of g/mi ZEV credits. The amount of g/mi ZEV credits r equired to be submitted shall be calculated by [i] adding the number of ZEVs produce d and delivered for sale in California by the manufacturer for the model year t o the number of ZEV allowances from partial ZEV allowance vehicles produced and de livered for sale in California by the manufacturer for the model year (for a l arge volume manufacturer LVM , not to exceed that permitted under section C.2.1), [ii] subtracti ng that total from the number of ZEVs required to be produced and delivered for sale in C alifornia by the manufacturer for the model year, and [iii] multiplying the resulting val ue by the fleet average requirements for PCs and LDT1s for the model year in which the defic it is incurred.

7.8 Penalty for Failure to Meet ZEV Requirements. Any manufacturer that fails to produce and deliver for sale in California the required number of ZEVs and submit an appropriate amount of g/mi ZEV credits an d does not make up ZEV deficits within the specified time production- period shall be subject to the Health and Safety Code section 43211 civil penalty applicable to a ma nufacturer that sells a new motor vehicle that does not meet the applicable emission standards adopted by the state

board. The cause of action shall be deemed to accr ue when the ZEV deficits are not45-day Notice 02/08/08

Board Hearing: 03/27/08 15-Day Notice: 07/25/08 C-25 balanced by the end of the specified time production- period. For the purposes of Health and Safety Code section 43211, the number of vehicl es not meeting the state board’s standards shall be calculated according to the foll owing equation, provided that the percentage of a large volume manufacturer LVM ’s ZEV requirement for a given model year that may be satisfied with partial P ZEV allowance vehicles or ZEV credits from such vehicles may not exceed the percentages permit ted under section C.2.1(a):

(No. of ZEVs required to be produced and delivered for sale in California for the model year) - (No. of ZEVs produced and delivered f or sale in California for the model year) - (No. of ZEV allowances from partial Z EV allowance vehicles produced and delivered for sale in California for t he model year) - [(Amount of ZEV credits submitted for the model year) / (the fl eet average requirement for

PCs and LDT1s for the model- year)]

8. Severability. Each provision of these standards and test procedu res is severable, and in the event that any provision of t hese standards and test procedures is held to be invalid, the remainder of the standards and test procedures remains in full

force and effect.

9. Public Disclosure. Records in the Board’s possession for the vehicles subject to the requirements of section 1962.1 C shall be subject to disclosure as public

records as follows:

(a) Each manufacturer’s annual production data and the corresponding credits per vehicle earned for ZEVs (including ZEV type), Enhanced AT PZEVs, AT

PZ EVs, and PZEVs for the 2009 and subsequent model ye ars; and

(b) Annual Credit balances for 2010 and subsequent years for:

(1) Each type of vehicle: ZEVs (minus NEVs), NEVs, Enhanced AT PZEVs,

AT PZ EVs, and PZEVs; and

(2) Advanced technology demonstration programs; and

(3) Transportation systems; and

(4) Credits earned under section 1962.1(d)(5)(C) C.4.4(c), including credits acquired from, or transferred to another party.45-day Notice 02/08/08

Hearing Date: 03/27/08 15-day Notice: 07/25/08 E-1 D. Certification Requirements [NO CHANGE]45-day Notice 02/08/08

Hearing Date: 03/27/08 15-day Notice: 07/25/08 E-1 E. Test Procedures [NO CHANGE ]