This entry was authored by Hodgson Russ summer associate Jonathan Jasinski. Jonathan is a student at Vanderbilt University Law School.
On May 29, 2014, the ZEV Program Implementation Task Force issued a 32-page action plan detailing the efforts that eight states will undertake to increase the number of zero-emission vehicles (ZEVs) in use. ZEVs are battery electric, hybrid, and hydrogen fuel cell vehicles. The task force was created by a memorandum of understanding signed by the governors of California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont in late 2013. Each of the states have taken some steps to promote ZEVs; the task force’s goal is to coordinate those efforts through joint implementation of the action plan.
What Does the Plan Entail?
The action plan’s primary objective is to have 3.3 million ZEVs in use in the eight signatory states by 2025. To say this represents a large increase is quite an understatement; although ZEVs have been widely available since 2010, only about 200,000 have been sold nationwide. To promote increased ZEV sales, the action plan suggests several “key actions” for the states to take:
- Promote the availability and marketing of all plug-in electric vehicles
- Provide consumer incentives to enhance the ZEV ownership experience
- Increase the number of ZEVs in public fleets
- Encourage private fleets to purchase, lease, or rent ZEVs
- Promote workplace charging
- Promote ZEV infrastructure planning and investment
- Provide clear and accurate signage for charging and fuelling stations and parking
- Remove barriers to ZEV charging and fuelling station installation
- Promote compatibility and interoperability of the plug-in electric vehicle charging network
- Remove barriers to the retail sale of electricity and hydrogen as transportation fuels and promote competitive plug-in electric vehicle charging rates
- Develop a system to track and report progress toward the 3.3 million ZEV goal
What Does This Mean for Consumers?
Because of the large market represented by the eight states, the action plan has the potential to substantially change the automotive market not only in the signatory states, but nationwide. Its largest impact will likely be on the availability of infrastructure to support ZEVs. Currently, the battery life of many electric vehicles is only 60 miles, and a lack of charging stations and equipment incompatibility limits their range to significantly less than that. The action plan calls for workplace chargers for all interested state employees by 2020, charging and fuelling stations along highways to promote longer range use, and equipment standardization to limit incompatibility. The focus on state facilities—hopefully duplicating the success states have had in promoting green buildings by imposing requirements on their own facilities—brings the state’s combined procurement power into the ZEV infrastructure marketplace.
Recognizing the nature of the U.S. automotive market, the action plan calls for changing auto dealer and consumer behavior to increase awareness of ZEVs and available incentives. It cites reports from the National Academy of Science and the Electrification Coalition that demonstrate a lack of consumer awareness of ZEVs and the reluctance of dealers to promote these vehicles, which are considered to have a lower profit margin. Thus, it recognizes the need for greater education efforts and for dealers to embrace ZEVs for long-term success.
Beyond equipment interoperability, the action plan suggests several other means for interstate standardization. It calls for state and national authorities to reconcile and expand current signage for electric vehicle charging stations and to create new standard signage for hydrogen vehicle stations. It also suggests that states create uniform codes for the creation and regulation of charging and fuelling stations.
In order to promote ZEV use and infrastructure development, the action plan includes several financial and logistical incentives. It calls for state representatives to lobby for an extension of the federal income tax rebate and to create new state tax incentives for ZEV owners. It suggests allowing ZEVs to use high-occupancy vehicle (HOV) lanes and reducing tolls for ZEVs. To incentivize developers to build charging and fuelling stations, it suggests tax incentives for infrastructure development.
Some of the actions touch on highly volatile issues that could threaten their implementation. Increasing ZEV use comes at a challenging time for infrastructure funding. The federal Highway Trust Fund will run out this summer absent action from an increasingly polarized Congress. One possible solution is an increase in the fuel tax, which would effectively subsidize ZEV use. Regardless of the outcome of the current stalemate, increased ZEV use coupled with vehicle efficiency will mandate a change in funding formulas to keep roads and bridges in safe condition.
Non-ZEV owners will likely be affected by the action plan as well. A substantial growth in ZEV use and supporting infrastructure, such as strongly enforced ordinances mandating ZEV-only parking spaces, will reduce overall parking availability. If utilities change their pricing structures as the action plan suggests, costs may be shifted away from ZEV owners to other ratepayers, including those least able to afford it. Even the action plan’s call for a short-term reduction in road, bridge, and tunnel tolls may not receive acceptance from the public.
Whether or not the ZEV action plan will meet its stated goal is unclear—there are many variables at play that can affect the potential growth and marketability of ZEV usage. California has already used its regulatory power to impact its own ZEV marketplace. Now this plan has the potential to substantially change the U.S. driving experience.
Daniel Spitzer is a partner in the Environment & Energy Practice at Hodgson Russ LLP. You can reach him at email@example.com.