Tesla Subsidy Vanishing Amid Electric Vehicle Boom

[n2doc]

By Darryl Siry August 2, 2010 | 8:00 am | Categories: EVs and Hybrids


Twenty years ago the California Air Resources Board established the zero emissions vehicle mandate requiring the largest automakers to build and sell electric vehicles. Twelve states adopted the same aggressive targets, creating what remains the strongest regulatory force driving the development of battery electric and hydrogen fuel cell vehicles.

With General Motors and Nissan delivering EVs by year’s end and Toyota, Honda and Volkswagen, among others, promising them within a few years, it looks like manufacturers will have no trouble meeting what they once considered an onerous requirement. This can only be considered a success for CARB because its goal of electrifying the fleet is being achieved.

The ZEV credit is the basic mechanism of the Zero Emissions Vehicle Program. The mandate required automakers selling more than 60,000 cars in California annually to build a certain number of zero emissions vehicles. Automakers who haven’t met the mandate have been allowed to purchase credits from manufacturers who produced more ZEVs than the mandate required.

The auto industry complained that the original mandate was impossible to achieve and over the years has successfully argued to have it weakened. Another change allowed automakers to meet the mandate in part by producing hybrids and ultra-efficient gasoline vehicles called partial zero-emissions vehicles. But even under the relaxed guidelines, as of 2008 several automakers found themselves needing credits.

There was only one place to get them: Tesla Motors.



Read More http://www.wired.com/autopia/2010/08/tesla-subsidy-vanishing-amid-electric-vehicle-boom/

[txlibdem]

1. It's not a credit

The title of the OP is a bit confusing; it sounds like purchasers of Tesla's upcoming Model S (super hot) electric car won't be getting the $7500 tax writeoff. But if you read the linked article you see that it has nothing to do with that at all. So don't worry, you'll still get the $7500 tax break if you purchase a Tesla, Chevy Volt, Nissan Leaf or any of the other electric cars coming from Toyota, VW, etc.

The issue is the ability of manufacturers to sell Carbon Offset Credits on the carbon credit market that some states are setting up. The main point of the article is that there won't be enough allowable carbon credits to equal the number of electric cars that are going to be made. To me that's a great problem to have.

Carbon offsets are hard for me to figure out just how they are valued. It's more like a pretend stock market than anything else, where all these different companies will be offering carbon credits for sale (because they make electric cars or wind turbines or ???). Then some other company that can't afford to stop polluting just yet (like a concrete manufacturer or a steel mill) can buy that carbon offset credit and so be "forgiven" some of its polluting.

Too bad we don't have a nationwide price on carbon emissions. That would solve the limited credits issue.