State officials and two automobile manufacturers groups Monday evening said they’ve agreed on a way to make more electric vehicles available to Coloradans faster, offering incentives to automakers who get started sooner.
The proposal comes two weeks before a state regulatory board will consider joining California’s Zero Emission Vehicle (ZEV) standard. That’s still planned for Aug. 13, but this separate agreement means the Alliance of Automobile Manufacturers and Global Automakers are on board with Colorado becoming a ZEV state.
“The long and short of it is that it gives us the credits we need to successfully transition into (Colorado’s) program while ensuring that ZEVs will continue to increase in the Colorado marketplace” said Bryan Goodman, a spokesman for the automaker’s alliance. “We’re very excited because it meets everyone’s goals.”
Some in the auto industry have opposed joining California’s lower emission standards because it forces automakers to sell a certain number of electric vehicles in a state where gas-powered light-duty trucks and SUVs outsell passenger vehicles — the body of choice of many EV manufacturers. The two automaker organizations represent 99% of light-duty automakers in Colorado.
But working for months with the state Department of Transportation and Energy Office, the sides figured how to get past a quirk in the regulation that allows automakers take credits earned in California and use them to meet minimums in other states.
“What we agreed to was that we would support the adoption of a credit bank, but we wanted to make sure we weren’t allowing so many of those credits to be used to undercut the regulatory goal of the program,” said Will Toor, executive director of the Colorado Energy Office. “
More: A first look at how Colorado will become a ZEV state: the rule, the cost, the debate
The agreement gives automakers who choose to sell EVs in Colorado as early as next year extra credits to offset goals from 2023 to 2025. Manufacturers, however, can only apply credits earned from selling in other states to 23% of its Colorado goal.
Without the promise of early credits, some automakers could hold back on making EV inventory available in Colorado.
But many automakers aren’t selling EVs in Colorado yet and the industry said it takes time for them to launch new vehicles and shift them to Colorado lots. Those companies that wait to offer vehicles in 2023 — when the ZEV mandate would take effect — would be capped at 36% of credits from other states.
The choices were to help automakers plan for their future rollouts in Colorado. Those that aren’t making EVs available in Colorado would probably opt for the 36% option. But those who already sell EVs here would earn future credits to offset ZEV mandates between 2023 to 2025, said Shoshana Lew, executive director of the Colorado Department of Transportation.
Goodman said this is an unusual agreement partly because it’s been nearly a decade since a new state joined California’s zero-emissions standard. But automakers wanted to work with Colorado because the state ranks among the highest for rate of EV sales, has an expanding vehicle charging network and offers incentives to new EV owners.
“Colorado is ahead of the curve,” he said.
The agreement must be approved by the state Air Quality Control Commission, which meets on Aug. 13 to consider adopting the ZEV mandate.
If the state adopts California’s ZEV standard, auto manufacturers would be required to make electric vehicles account for nearly 5% of their vehicles for sale in Colorado by 2023, with higher rates in following years.
“The early action credits really incentivizes the automobile manufacturers to bring all of their EVs to Colorado starting as early as January 2020, whereas the rule itself wouldn’t go into effect until two years after that,” Toor said. “We also think there’s great value to roll this out in a cooperative way with auto manufacturers where we’re all focused on how to do this efficiently rather than fighting out the details of the rule.”