California Strengthens Vehicle Emission Standards

Over the past couple of decades, California has earned a reputation for passing its own environmental standards that are often much more rigorous than those set by the federal government. Following this trend, California’s Air Resources Board (ARB) released a tougher vehicle emissions program for vehicle model years (MY) 2015 through 2025. The Advanced Clean Cars program, which was passed unanimously on January 27th, is designed to “encourage” the sale and development of environmentally advanced cars by mandating significant cuts in smog and carbon dioxide emissions.

According to ARB Chairman Mary Nichols, the new rules “will clean our air, fight climate change and provide cars that save consumers thousands of dollars at the pump.” Specifically, by proposing tougher smog standards starting with MY 2015, cars built in 2025 will emit 75 percent less smog-forming pollution compared to 2014. In the past, similar legislation (known as Low Emission Vehicle I) reduced smog by 75 percent between 1994 and 2003. Greenhouse gas emissions, for which regulations go into effect in 2017, are predicted to be 34 percent lower for MY 2025 vehicles than those made in 2016. Over the course of the regulations, it is estimated that greenhouse gases will be reduced by roughly 52 million tons, or the equivalent of taking 10 million cars off the road for one year.

The vital source of these emission reductions is the 1.4 million plug-in hybrid and zero-emission vehicles that will be on the road by 2025—if all goes according to plan. Essentially, manufacturers will be required “to offer for sale specific numbers of the very cleanest cars available.” ARB estimates that while the cost of new vehicles with high-efficiency technology would increase by an average of $1,900, the payback period would be between one and 3½ years. Over the course of a typical consumer’s ownership of such a vehicle (eight years), the owner would save an average of $4,000, which translates to about $6,000 over the lifetime of the car. Even if these estimates are correct, however, consumer demand will ultimately decide when (or if) the electric vehicle industry can thrive and sustain growth over the long term.