Filed under: Legislation and Policy
California CO2 law has gaping loopholes for imports
The state of California has made a lot of noise about their attempts to regulate emissions of carbon dioxide from cars and effectively increase fuel efficiency requirements. Big carmakers have been fighting the rules because they want a single national standard to deal with. However, there may be another reason that they don't like the California regs that could be even more important. The rules only apply to manufacturers that sell an average of over 60,000 vehicles annually for three years. That means that only the three domestics, Toyota, Nissan and Honda would be affected. Companies like VW, Hyundai, Mercedes and others would only have to meet the federal requirements. That exemption goes through 2016 but even after that time the rules are vague about what happens. While it makes sense to offer some exemptions to low volume automakers like Ferrari and Lotus, the federal threshold of 10,000 sales makes more sense than 60,000 in California alone. Leaving a hole like that just provides a means for companies that come in just below the limit to game the system by withholding certain models for sale in the state. Then there is the issue of all the other states that want to follow California's lead. Will they set different thresholds or exempt manufacturers based on their sales in California? Given that markets are not uniform across the country, this could get very messy, very quickly. Consumers in certain states might be able to by certain models that neighboring states could not. If Congress wants to support California's standards, they should just adopt it as a federal standard instead of grandstanding by passing legislation forcing the EPA to grant a waiver to the state.
[Source: Detroit Free Press]
Reader Comments (Page 1 of 1)
Tim 1:47PM (5/22/2008)
Whatever standard they adopt, it should be clear, simple and easy for EVERYONE to understand and follow and level the playing field for everyone.
O.K., I realize that this is an impossible task for a committee of Bureaucrats.
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jeffzekas 2:00PM (5/22/2008)
Hey, 60,000 is NOT a lot of vehicles! Actually, what California (and the rest of the USA) should do is adopt European smog and safety standards... then, we could get an unlimited supply of cool cars!
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Wave54 3:29PM (5/22/2008)
That 60,000 sales figure is for CA alone, not nationwide sales. Like the post states, the only imports that have to comply are Toyota, Nissan and Honda.
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Joseph 7:04PM (5/22/2008)
Law makers really need to pay more attention to the spirit of the law.
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justin 7:43PM (5/22/2008)
Hmm... I'm wondering where the estimate of manufacturer's sales numbers in CA came from.
A quick check here:
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
Shows that VW sold 38K cars in the US in April of 2008. This annualizes to roughly 450,000 cars.
According to this article in the NY Times:
http://query.nytimes.com/gst/fullpage.html?res=9C0CE7DB153BF93AA15756C0A966958260
California makes up 12% of the total US auto sales market, putting VW's annual sales in CA at about 55,000 vehicles.
Based on Hyundai's numbers, they sell approximately 56,000 vehicles in CA.
Many of the other manufacturers are well below the 60,000 mark. BMW sells only about 38,000 cars and Mercedes manages a meager 30,000.
Notably, if Audi is considered part of VW, which it should considering they are owned by the same parent, then VW goes over 60,000 cars per year.
Given that VW and Hyundai are in the volume business and have a fair number of fuel efficient models that meet the EU's tough CO2 standards, it seems unlikely to me either one would be overly concerned about the threshold. In fact, I'm sure either would love to expand their share of the CA car market, regardless as to the regulations in place.
Secondly, given that every other manufacturer is barely at 50% of 60,000 vehicles sold per year in CA, I'm guessing there's little worry that any of them will try to "game the system". They would fall over themselves to double their sales volume, and, in fact, Mercedes and BMW do have cars that pollute a lot less than those the sell now in the US (evidenced by the A series post on this very site).
So, I'm highly suspicious of any claims that manufacturers will "game the system." They will do anything the can to get car sales right now, and that includes getting their fleets to the appropriate levels of emissions.
All of that said, I would lobby for a limit of say, 1,000 vehicles sold per year.
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EEGeek 7:57AM (5/23/2008)
@#5 -- You can't annualize car sales based on one month because car sales are very seasonal. VW sold about 230k cars in the US in 2007 and is up slightly for 2008 thus far. Also, I'm pretty sure that VW sells far more proportionately in CA than its population would suggest. So your estimates are pretty useless, IMO.
Ref for 2007 VW sales: http://media.vw.com/article_display.cfm?article_id=10270
CA can simply look at new vehicle registration information to determine who exceeds their threshold. I agree that the sales limits in CA are a bogus loophole, but I also think that the whole thing should follow federal standards. The USA is a federal republic, but that should not mean that we should balkanize our economy.
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