Electric and fuel-cell vehicle suppliers stand to lose between $68 million to $135 million in potential revenue if the California Air Resources Board approves proposed revisions to its zero-emission vehicle program, according to the Union of Concerned Scientists.

The proposal, which the board is expected to consider Thursday, would reduce – from 25,000 to 2,500 -- the number of zero-emission vehicles, such as fuel-cell and electric cars, that vehicle manufacturers are required to produce for sale in the state between 2012 and 2014.

It also would add a new requirement calling for 75,000 "partial zero-emission vehicles," an intermediary step between other low-emission vehicles, such as regular hybrids, and zero-emission vehicles that include plug-in hybrids and hydrogen internal-combustion vehicles.

But the Air Resources Board may consider strengthening its proposed requirements, said Leo Kay, a board spokesperson.

"I’m hearing there might be a movement afoot to up the pure (zero-emission vehicle) numbers," he said.

If that doesn’t happen, the Union of Concerned Scientists said the increase in "partial zero-emission vehicles" won’t make up for the financial loss for those working on pollution-free vehicles.

During a conference call Wednesday, Spencer Quong, senior vehicle analyst for the group, listed battery manufacturers, fuel-cell stack assemblers and hydrogen-tank manufacturers as among those that would suffer if the zero-emission vehicle requirement is reduced. Aside from the $68 million to $135 million loss for those suppliers, investment in hydrogen fueling and battery charging infrastructure also would drop by $163 million, he said.

Quong’s analysis comes from the union’s study on the impact of California’s zero-emission vehicle program on the state’s long-term global-warming pollution goals, which found that California would need 379,000 of the clean vehicles on the road in 12 years to meet its goal of reducing global-warming emissions to 80 percent below 1990 levels by 2050.

The ability to get these cars on the road would be greatly handicapped if the Air Resources Board reduces its zero-emission vehicle requirement, Quong said.
Not every green-car advocate is solidly against the proposal, however.

"Some of the recommendations are favorable; however, the proposals are tending to motivate [plug-in hybrids] at the expense of [battery-electric vehicles]" wrote Felix Kramer, founder of plug-in hybrid advocacy group CalCars.org.

He called it "a major mistake" to pit the two "complementary" approaches against each other and said that incentives for one shouldn’t come from allocations for the other. Plug-in hybrid requirements should replace the program’s dirtiest vehicles, instead of its cleanest vehicles, he wrote.

"We don’t want [plug-in hybrids] pitted against [electric vehicles]," he told Greentech Media. "We want both accelerated."

Other electric advocates say they don’t think the larger requirement for cars like plug-in hybrids will benefit even companies working on those technologies. Sherry Boschert, vice president of Plug In America and author of Plug-in Hybrids: The Cars that Will Recharge America, said major automakers already plan to produce more partial-zero-emission vehicles than the new proposal would require.

Like Quong, Boschert, who also is a spokesperson for the Sierra Club, said California will need more zero-emission and partial-zero-emission vehicles for California to meet its long-term pollution-cutting goals. 

Still, the California Air Resources Board defended the state’s zero-emission vehicle program as a program that will push automakers to do more.

"We set targets and nudge automakers," Kay said, adding that government "nudging" also must acknowledge the limitations of current technologies.

Both electric vehicles and fuel-cell vehicles face the challenge of high cost and a lack of infrastructure, such as charging and fuel-cell stations (see Bumpy Road Ahead for Project Better Place?).

Electric vehicles also are working to address the long charging times and low range -- that is, how many miles the cars can drive before a recharge -- of batteries today, while fuel-cell vehicles are tackling such issues as low fuel efficiency and the difficulty of storing hydrogen densely enough in the vehicle to deliver an acceptable range (see Batteries Key to Plugging in at Electric Vehicle Symposium and Ballard Auto Business For Sale).

Kay said the California Air Resources Board staff came up with its proposal after talking with automakers and assessing whether different technologies could be brought to market, and that they didn’t bend to automaker pressures to lowball that assessment.

"We have our own staff of highly trained automotive experts who have a pretty good sense of what is going on in the world of manufacturing and what the limitations are," he said, adding that the proposal does push the auto industry.

Companies working on zero-emission cars apparently couldn’t disagree more. In a Tuesday blog posting, Tesla Motors CEO Ze’ev Drori said the electric sports-car company already is producing road-worthy zero-emission vehicles.

In a letter to board chair Mary Nichols, Drori wrote that the proposal "will have a severe adverse impact on Tesla," if it is enacted, as the company wouldn’t be able to sell as many accumulated zero-emissions vehicle credits to offset its development costs.

"The staff recommendation is disturbing since, in essence, not only it would (sic) substantially weaken the ZEV program, but it will also bestow a financial windfall on rich foreign automakers and domestic giants while … penalizing a Califonia-based ZEV manufacturer," he wrote.

-- Editor Jennifer Kho contributed to this article.