UPDATED: Colorado’s Air Quality Control Commission voted to approve the state’s adoption of the zero-emissions vehicle mandate.
The vote was 8-1 with Commissioner Tom Gonzales voting against the rule. (Updated Friday, August 16, 2019, at 9 a.m.)
How clean are electric vehicles? How much will a zero-emissions vehicle mandate cost businesses in Colorado? And isn’t Colorado already doing a good job without regulations?
These questions came up more than a few times during this week’s hearing by the state Air Quality Control Commission that is expected to decide whether Colorado will become the next state to adopt California’s ZEV requirement.
The three-day hearing wrapped up testimony Thursday at 5 p.m., and commission now is debating the rule. A decision is expected on Friday.
The push for ZEV by Gov. Jared Polis is intended to reduce automobile emissions since the state’s air quality is out of federal compliance. The direct impact will force automakers to offer more electric vehicles in Colorado, which has been overlooked as manufacturers focused on states with ZEV requirements.
“It’s about the future, it’s about where do we move forward, not to achieve a modest change of 2.6 to 6% EV sales, but to achieve broad adoption of zero emission vehicles,” said Garry Kaufman, director of the state’s Air Pollution Control Division.
Some key points made during the three-day hearing:
EVs not fix for all air-quality pollution
If Colorado adopts ZEV, an estimated 3.2 million metric tons of greenhouse gases would not be produced between model year 2023, when the mandate takes effect, and 2030, according to a division report.
This would also cut down on vehicle emissions where the concentration of people and cars live — Denver and the Front Range, said Doug Decker, mobile source director for the division.
However, this doesn’t mean ZEVs have no impact on emissions. EV runs on electricity, and Colorado’s power plants aren’t running on 100% clean energy yet.
Jennifer Biever, an attorney for the American Fuel & Petrochemical Manufacturers, which opposes ZEV, said that a reliance on electricity could increase emissions since “the state’s grid remains reliant on coal and other non-renewable energy sources.”
“And this electric vehicle usage will create more emissions than it ameliorates as the increased demand for electricity inevitably leads to producing more emissions,” she added.
Decker acknowledged this, but said vehicle emissions have much more impact because there are more cars where people live..
“We are really eliminating tailpipe emissions and trading them for emissions from electric generation,” Decker said during the hearing. But, he added, power plants are typically not in populated areas so any plant emission “generally is dispersed outside of ozone nonattainment areas, for the most part.”
Power plants are already being addressed statewide. Polis is pushing for 100% renewable energy by 2040. While new laws are forcing energy plants to run cleaner, a ZEV mandate will take care of the other main contributor to ground-level ozone, Kaufman said.
“By 2020, the transportation sector will be the largest source of greenhouse gas emissions,” Kaufman said. “…So again, it all points to the need, the urgent need to find ways to reduce greenhouse gas emissions from the transportation sector. And part of that strategy, a significant part of that strategy is going to have to be zero emission vehicles.”
When questioned by a commission member about how ZEVs would reduce ozone precursors, the division’s response was “pretty small,” Kaufman said. Carbon monoxide and other chemicals are often called ozone precursors that when heated by the sun turn into greenhouse gases.
“I think that all of these benefits that we’re talking about, this whole strategy, it’s a step. This doesn’t solve our problems. And I don’t think anybody should be under the illusion that by adopting the ZEV mandate, the ZEV requirements, that somehow our ozone issues or our greenhouse gas issues are going to go away,” Kaufman said. “It’s just a piece of a much broader puzzle.”
Forced to buy EVs?
Members representing rural communities spoke out against statewide mandates that they said would affect their communities disproportionately and negatively.
Gary Moyer, a Rio Blanco County Commissioner, called it “a war on rural Colorado.”
“You’re supposed to be representing the entire state,” Moyer told commission members. “You can’t look at a state like Connecticut and think you’re comparing apples to apples.”
Connecticut is one of nine states that adopted California’s ZEV mandate, which is the same one Colorado is now considering.
“We don’t want to subsidize the more populous, more wealthy areas of the state where people buy these,” testified Dianna Ort, with the Associated Governments of Northwest Colorado. “… We thank you for this opportunity. And we ask you to please reconsider this proposal and back off.”
But Lafayette Mayor Jamie Harkins, who is president of the Colorado Communities for Climate Action, said that the organization has several mountain communities that support ZEV.
“Our support for EVs is really in recognition that vehicle electrification is a key strategy for every one of our communities that are working really hard to stabilize the climate,” she said. “Let me be clear that we are already dealing with the impacts of climate change. And those impacts are growing every month as we’re seeing record breaking global average temperatures.”
California’s ZEV policy sets minimum EV sales for automakers in that state. Colorado’s Air Pollution Division staff translated the California requirements into what it would mean for automakers who sell in Colorado. In 2023, the first year ZEV would take effect, about 4.9% of new car sales must be zero-emission vehicles, which include electrics, plug-in hybrids, fuel-cells and others. By 2030, the requirement rises to 6.1%.
The mandate is intended to make sure the cars are actually available in dealerships so Coloradans can buy them. Jamie Payne, general manager of Planet Hyundai, who opposes more regulations has said that Hyundai won’t sell him electric cars so he buys them from Connecticut. Those EV sales have made up about 5% of new car sales for the dealership.
But there’s no requirement in the ZEV rule that rural dealerships or farmers or city dwellers must buy an EV. Even by 2030, nearly 94% of new cars in Colorado could still be conventional, gasoline-powered cars.
“If a zero emission vehicle works for your purposes as a vehicle purchaser, buy zero emission vehicles,” Kaufman said. “If it doesn’t work for your application, whether it’s personal vehicle or commercial vehicle, don’t buy a ZEV. There is no requirement on the car buying public to buy or not buy these vehicles.”
In opposition, auto dealers said they would be pressured to buy ZEVs from automakers who must meet the goals.
They may not get the popular gas models if they don’t buy EVs from automakers. And If the cars don’t sell, it’s the dealers who say they are stuck paying interest and maintenance on vehicles they may end up selling at a loss.
“Colorado is doing very well on what I would call the carrot approach,” said Tim Jackson, CEO of the Colorado Automobile Dealers Association. “And that’s (through) incentives to buy zero emission vehicles. But we don’t favor the what I call the stick approach, We trust consumers to decide what vehicle is right for them. And certainly, they are getting more options in the marketplace now than ever before.”
He said that new cars this year including the Audi e-tron and Jaguar iPace were made available to Colorado dealers within 30 days of their debut.
“So really, you don’t have to mandate for manufacturers to get cars to Colorado,” Jackson said. If you want to have them buy credits and give it to some other EV company that is manipulating the marketplace, then maybe there’s a reason to do ZEV. It’s not a reason to get Colorado consumers cars.”
EVs and plug-in hybrids are already selling in Colorado. According to data from the Alliance of Automobile Manufacturers, Colorado EV and plug-in hybrid sales last year made up 2.6% of all new car sales. And several dealership officials testified that EVs on their lots are selling at rates higher than the proposed ZEV minimum, although they gave their reasons for opposing the mandate.
Christina Dawkins, dealer principal at Co’s BMW Center in Loveland, said 10% of its new BMW car sales were EVs or plug-in hybrids, while on its Mini Cooper side, “our best selling vehicle is the plugin.”
But she wondered what will happen if incentives go away, as some of the federal tax credits already have begun to phase out. Colorado currently offers a $5,000 tax credit at the time of an EV purchase. That’s helped dealers sell an EV over other vehicles and it’s also probably what’s led to Colorado having the fourth highest rate of EV sales nationwide, Dawkins said.
“How much better can we make that? Does a mandate need to happen,” Dawkins said. “And that’s our argument, do we need a mandate to increase EVs when they’re ready coming in? We’re embracing them and we will be selling them in our stores.”
John Medved, owner of Medved Autoplex in Castle Rock, said 82 of the dealership’s 1,200 sales last year were ZEVs or hybrids, or about 6.8% of its sales. But some of those vehicles were on the lot for more than a year and he said he lost money on some of them.
“So the vehicle’s not ready for prime time, because it can’t be produced without a huge subsidy for somebody to buy it,” Medved said. “…And I do (have) them, and I do sell some. But if I sat there and sold every one of them (at a loss), I’d have to come here and get a subsidy just to open my doors.”
Tesla, the largest seller of electric vehicles, doesn’t rely on dealerships but sells directly to consumers. The company sold 95,000 vehicles in its recent second quarter and said there are approximately 9,000 Tesla drivers in Colorado. The company also estimated that between 65 to 75% of EV sales in Colorado are Teslas which means other automakers probably aren’t close to the state’s current 2.6% rate of EV sales.
A ZEV mandate isn’t expected to impact Tesla much since all of its cars are electric. The company supports the ZEV mandate because of its mission to have EVs proliferate worldwide.
“This only helps Tesla in its overall mission,” said Thad Kurowski, senior policy adviser at Tesla. “…If we’re going to adopt a standard and be bold as Gov. Polis directs, we should be adopting a ZEV policy that maximizes deliveries and not provides for business as usual.”