Driving the Market for Plug-in Vehicles: Understanding ZEV Mandates

Magazine article, 2018

Plug-in Electric Vehicles (PEVs), which include battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), are more effi cient and less polluting than conventional vehicles. PEVs have the potential to reduce urban air pollution and greenhouse gas (GHG) emissions if they are deployed in large numbers and are coupled with clean sources of electricity. To increase PEV market share, a number of market-focused and supply-focused regulatory mechanisms are needed. Market-focused mechanisms include vehicle charging infrastructure, incentives, and consumer education. Examples of supply regulations include fuel economy standards, vehicle emissions standards, and low-carbon fuel standards. This brief focuses on zero emission vehicle (ZEV) mandates. A ZEV mandate requires automakers to produce and/or sell ZEVs in a given region, subject to fi nes for non-compliance. California adopted its ZEV mandate in 1990, and has regularly updated the regulation to accommodate changing market conditions, technology readiness, and evolving goals. Several other U.S. states have joined California in adopting the ZEV mandate, and are collectively with California called “ZEV States.” A ZEV mandate was also adopted in the Canadian province of Quebec in 2016, via the ZEV Act (MDDELCC, 2016). Further, China has recently implemented its own “new-energy vehicle” (NEV) mandate fashioned after California’s ZEV mandate. This brief summarizes the policies as currently in place in California and China, discusses the available evidence on the potential benefi ts and drawbacks of a ZEV mandate, and concludes with lessons learned.