The Price of Technology
By Greg Hanssen
Recently I wrote up some opinions about the recent ARB proposals where I concluded the 2% ATPZEV (advanced technology partial-zero emission vehicle) option was the most damaging to the full function ZEV market. PEVDC (Production Electric Vehicle Drivers Coalition) co-chairman Bill Mason pointed out that the cost savings to the auto makers of the ATPZEV option may not be what it seems.
I've heard that some are concerned about the plug in hybrids being allowed in the 4%... While this could be serious competition to ZEVs in the future, near term I don't think there is anything to worry about. We need plug in hybrids in order to truly give the best of both the ZEV world and the unlimited range of the ICE age. And most importantly we need to get consumers into the practice of home refueling as compared to 'gassing up'. It's going to take a lot to get any auto maker to even CONSIDER a plug in hybrid, I think the ARB proposal is fine as long as it doesn't remain unbalanced relative to pure ZEVs in the long term.
In my good/bad/ugly post I pointed out that both the more aggressive range multiplier credit as well as the early roll out/phase in credit were GOOD because they make full function EVs and quicker introduction more attractive to the auto makers as well as increasing the effective $5000 fine per vehicle not produced... all this despite the fact that both tend to reduce total number of ZEVs from the original LEV2 credit structure.
By cutting the effective ZEV portion from 4% to 2%, the ATPZEV option does none of this and only serves to reduce the population of ZEVs. That's bad. ARB claims that the ATPZEV option will help reduce the cost of the ZEV program for auto makers but closer inspection reveals a different picture.
Using staff's own numbers for cost ($3300 incremental cost for ATPZEV and $17,000 incremental cost for a full function ZEV (see page 34 of the ISOR)) as well as the # of required vehicles with and without the ATPZEV option, Bill and I thought we should run some of the numbers and see if this dramatic cutting of the ZEV requirement really resulted in the savings staff claims. These calculations take into account the average credit for a ZEV compared to the .45 credit for an ATPZEV as well as any phase in credits for ZEVs and PZEVs.
According to staff, the number of vehicles we would expect to see is as follows:
|4% ZEV||2% ATPZEV|
I should also point out that if an auto maker were to split their 2003 requirement over 2002 and 2003 they would gain a huge credit on the ZEV side such that for 2003 it would be 4,400 ZEVs as compared to 9,300.
This leads us to the following calculations for the cost of each option in millions of dollars:
|2003||158.1||114.4 (million $)|
And with the early roll out of ZEVs over 2002 and 2003, 2003 becomes 74.8 million $ for the 4% ZEV option 72.7 million $ for the 2%+2% option
What does that give us for the total cost of the 4% from 2003 through 2008?
With ATPZEV 2% option -> $1,171,200,000
With 4% ZEV only -> $1,065,900,000
And what if the auto makers bring out ZEVs in 2002 to count towards 2003?
With ATPZEV 2% option -> $1,129,500,000
With 4% ZEV only -> $ 982,600,000
(Note: None of these calculations take into acount the 6% PZEV cost which are assumed to be fully utilized.)
What does all this mean? Except for 2003 if the auto makers don't produce any ZEVs early in 2001 or 2002, most years produce the same or MORE cost for the 2% ATPZEV option.
The auto makers would stand to gain $105,300,000 between 2003 and 2008 by NOT producing 2% ATPZEVs and instead producing the entire 4% as full function EVs.
If the auto makers roll out ZEVs in 2002 they would stand to gain $146,900,000 in 2002 through 2008 by NOT producing 2% ATPZEVs and instead producing the entire 4% as full function ZEVs.
So given staff's questionable assumption that an ATPZEV costs $3,300 more than a normal vehicle and a full function ZEV costs $17,000 more... It would seem the ATPZEV option does NOT save the auto makers any money in the long run. Which of course begs the quesiton: If it only serves to dramatically reduce the number of ZEVs and ends up costing MORE, then why even consider it?
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