2018+
MYs
California’s ZEV Regulation
for 2018 and Subsequent
Model Year Vehicles
2016
1
2018+
MYs
Need for ZEV Regulation
California is the nation’s largest market for
passenger cars and light-duty trucks
Over 25 million registered vehicles
Over 800 million miles driven every day
Over 29 million gallons of gasoline consumed each day
Widespread adoption of ZEVs necessary to meet
California’s GHG reduction goals
40% below 1990 levels by 2030
80% below 1990 levels by 2050
2 Citation
2018+
2012 ZEV Regulation MYs
Modifications
In 2012 the Board passed sweeping
modifications to the ZEV Regulation
Simplified ZEV Regulation for 2018 and
subsequent model years
Substantially increased requirements
3
2018+
How does the ZEV MYs
Regulation work?
ZEV credit % requirement
based on average annual sales
Generate ZEV credits through
introduction of clean vehicle
technology
Spending rules based on type
of vehicle that earned credit
4 Percentage ZEV Requirements: 1962.2(b)
2018+
MYs
Section 177 ZEV States
“Section 177 ZEV State”: a state that is
administering the California ZEV requirements
pursuant to section 177 of the federal Clean Air
Act (42 U.S.C. Sec. 7507)
Current S177 ZEV States
Connecticut Massachusetts Oregon
Maine New Jersey Rhode Island
Maryland New York Vermont
5
2018+
MYs
Volume Status
LEV Regulation Definitions (CCR, Title 13,section 1900)
Average California Sales
Passenger Cars (PC), Light Duty Trucks (LDT) and
Medium Duty Vehicles (MDV)
Based on three previous consecutive model years
Small Volume Manufacturer (SVM) Not Subject
Average CA sales ≤ 4500 per year to Regulation
Intermediate Volume Manufacturer (IVM)
Average CA sales > 4,500 and ≤ 20,000 per year
Large Volume Manufacturer (LVM)
Subject to
Average CA sales > 20,000 per year Regulation
Volume Status Definition: CCR, Title13, section 1900
6
Percentage ZEV Requirements: 1962.2(b)
2018+
MYs
Volume Status
Transition in Volume Status
Increase in Volume Status
SVM and IVM – average CA sales > 4,500 based
on 3 consecutive 3 year averages
IVM and LVM –
Average CA sales > 20,000 based on 5
consecutive 3 year averages
Global revenue test for MY 2018 - 2020
Decrease 3 consecutive 3 year averages
Increase or decrease in volume status
effective in the following model year
7 Increases in California Production Volume: 1962.2(b)(7)
2018+
MYs
Volume Status
Example: Increase in Size IVM to LVM
Model Annual CA Sales Average Global Revenue
Year (PC, LDT, and MDV) California Sales (Billions of $)
2015 19,500
2016 20,000 Does not
pass
2017 20,600
revenue test
2018 20,750 20,033 39.5
2019 21,000 20,450 40.1
2020 19,000 20,783 40.5
2021 22,000 20,250 Subject to
2022 21,500 20,667 LVM Req.
2023 23,000 20,833
Subject to
2024 23,500 22,167
LVM Req.
8 Increases in California Production Volume: 1962.2(b)(7)
2018+
MYs
Production Volume
Definition: “Calculating the Number of
Vehicles to Which the Percentage ZEV
Requirement is Applied”
Simply called “Production Volume” for
presentation
The production volume on which your
ZEV requirement is based
Not the same as calculation for
determining manufacturer’s Volume Status
9 Percentage ZEV Requirements: 1962.2(b)(1)(B)
2018+
MYs
Production Volume
Volume of PCs and LDTs, including ZEVs
One Method
Average of the previous 2nd, 3rd, and 4th model year
from model year in which you are complying
Example: 2018 MY production volume calculation
based on average of 2014 – 2016 MY sales
May apply to use same year method for two if
California sales decrease by at least 30%
Two model years between 2018 and 2025
Example: 2018 MY sales < 2017 MY sales =
production volume based on 2018 MY sales
10 Percentage ZEV Requirements: 1962.2(b)(1)(B)
2018+
MYs
ZEV Requirement
Total ZEV Credit Percentage
Requirement 2018+
22.0%
19.5%
17.0%
14.5%
12.0%
9.5%
7.0%
4.5%
2018 2019 2020 2021 2022 2023 2024 2025 +
Model Year
11 Percentage ZEV Requirements: 1962.2(b)(2)
2018+
MYs
ZEV Credits
Only one type of credit: ZEV Credits
Several types of vehicles eligible to earn credits
ZEV – Zero Emission Vehicle
TZEV – Transitional Zero Emission Vehicle
HICE – Hydrogen Internal Combustion Engine
Vehicle
BEVx – Extended Range BEV
NEV – Neighborhood Electric Vehicle
PZEVs and AT PZEVs no longer eligible
Credit value simplified
Transitional Zero Emission Vehicle (TZEV): 1962.2(c)
12
Credits from ZEVs: 1962.2(d)
2018+
MYs
ZEV Credits 2018 and Beyond
5
Credits from
Credits per Vehicle
4
ZEVs
3
1
Credits from
TZEVs
0
0 50 100 150 200 250 300 350 400
Zero Emission Range (UDDS Test Cycle)
13 Citation
2018+
MYs
ZEVs
ZEV – Zero Emission Vehicles
Zero exhaust emissions of any criteria
pollutant or greenhouse gas under any and all
possible operational modes and conditions
Types of ZEVs
Battery Electric Vehicles (BEV)
Fuel Cell Electric Vehicles (FCEV)
Credit based on all-electric range of vehicle
14 ZEV Emission Standard: 1962.2(a)
2018+
MYs
ZEVs Urban All-Electric Range Test
ZEV Credits (Test Procedures F.3.1.1)
All-electric Range (AER)
UDDS Test Cycle
< 50 mi ≥50 miles >350 miles
0.00 (0.01 x UDDS) + 0.50 4 (cap)
UDDS = AER
Credits awarded when vehicle is delivered for sale
Fast Refueling discontinued
15 ZEV Credit Calculations: 1962.2(d)(5)(A)
2018+
MYs
ZEVs
5 2015 Hyundai Tucson FCV
EPA Label = 265
Approx. AER = 360
Credits for 2018 MY = 4
4 200 mile ZEV
EPA Label = 200
Credits per Vehicle
Credits for 2018 MY = 3
credits per vehicle 70%
3
2
2016 Nissan LEAF (30 kWh)
EPA Label = 107
Approx. AER = 160
1 Credits for 2018 MY = 2
0
0 50 100 150 200 250 300 350 400
Zero Emission Range (UDDS Test Cycle)
16 ZEV Credit Calculations: 1962.2(d)(5)(A)
2018+
MYs
TZEVs
TZEV - Transitional Zero Emission Vehicles
PHEV – Plug-in Hybrid Electric Vehicles
Requirements
SULEV emission standards
Zero evaporative emissions
15 year/150,000 mi extended emissions warranty
10 year/150,000 mi warranty on energy storage device
Zero Emission Vehicle Miles Traveled (VMT) TZEV
Allowance
HICE – Hydrogen Internal Combustion Engine Vehicle
17 Transitional Zero Emission Vehicle (TZEV): 1962.2(c)
2018+
MYs
TZEVs
Zero Emission VMT TZEV Allowance
All-electric Range (AER)
UDDS Test Cycle
< 10 mi ≥10 miles >80 miles
0.00 (0.01 x EAER) + 0.30 1.10 (cap)
Equivalent All-Electric ≥ 10 miles of AER on
Range (Test Procedures US06 test cycle add
G.11) additional 0.2 credits
18 ZEV Credit Calculations: 1962.2(d)(5)(A)
2018+
MYs
TZEVs
Zero Emission VMT TZEV Allowance
Max TZEV
1.4
TZEVs w/US06 Allowance = 1.3
1.2 AER ≥10 miles
Zero Emission VMT TZEV
Allowance Per Vehicle
1 >80 miles AER =
1.1 credits
0.8
0.6 TZEVs w/UDDS AER
≥10 miles but ≤ 80 miles
0.4
0.2
0
0 20 40 60 80 100
Miles All Electric Range
19 Transitional Zero Emission Vehicle (TZEV): 1962.2(c)
2018+
MYs
HICE
Credits for Hydrogen Internal Combustion
Engine (HICE) Vehicles
Vehicles with a total range of at least 250
UDDS miles earn a base of 0.75 credits
Can be combined with Zero Emission VMT
TZEV Allowance
Total credit subject to a 1.25 credit cap when
combined with VMT TZEV allowance
20 Hydrogen Internal Combustion Engine Vehicles: 1962.2(c)
2018+
MYs
BEVxs
BEVx – Range Extended BEVs
APU – Auxilary Power Unit
On-board ICE generator
Gasoline range must not exceed AER
Must meet emissions requirements as TZEVs
Credits based on AER
Same as ZEV calculation
Minimum 75 miles AER on UDDS drive cycle
21 BEVx: 1962.2(d)(5)(G)
2018+
MYs
NEVs
NEV - Neighborhood Electric Vehicles
Vehicles earn 0.15 credits per vehicle
Technological Requirements:
Acceleration: 0 – 20 mph in 6 sec or less
Top Speed: ≥ 20 mph
Constant Speed Range: ≥ 25 miles
Sealed, maintenance-free batteries
24 month warranty on drivetrain (including
battery)
22 NEVs: 1962.2(d)(5)(F)
2018+
Discounted AT PZEV MYs
and PZEV Credits
Credits awarded prior to 2018 MY for PZEVs
and AT PZEVs
Banked credits may be used for 2018 through
2025 MY compliance
Banked credits discounted at the end of 2017
MY compliance
AT PZEV Accounts PZEV Accounts
Volume Status
Discounted Discounted
IVM 75% 75%
LVM 93.25% 75%
23 Converting Credits after Model Year 2017: 1962.1(g)(2)(F)
2018+
Advanced Technology MYs
Demonstration Program
IVMs and SVMs only
Credits awarded to ZEVs placed as prototypes
Includes BEVxs
Excludes NEVs and TZEVs
Vehicles do not need to be delivered for sale to
earn credits
Placed for at least 2 years, 50% of time in CA
Limited to 25 vehicles per model per ZEV state
per year
24 Advanced Tech Demo Program Credits: 1962.2(g)(4)(B)
2018+
MYs
GHG-ZEV Over Compliance
Credits awarded for over compliance with
GHG fleet standard
Manufacturers must apply no later than
December 31, 2016
Three conditions for eligibility
No outstanding ZEV compliance debts
No outstanding GHG program debts
Projected plans show over-compliance in
2018 - 2021 MYs by at least 2 gCO2/mile
25 GHG-ZEV Over Compliance Credits: 1962.2(g)(6)(C)
2018+
MYs
GHG-ZEV Over Compliance
How are GHG-ZEV Over Compliance
Credits earned?
2018 – 2021 MYs: calculate over compliance
with GHG program requirements each year
Must over comply by ≥ 2.0 gCO2/mile
Credit calculation based on previous model
year over compliance
Example: 2018 MY Over Compliance Credits
based on the amount they have over complied with
2017 MY Fleet Average GHG Compliance Target
26 GHG-ZEV Over Compliance Credits: 1962.2(g)(6)(C)
2018+
MYs
GHG-ZEV Over Compliance
How are GHG-ZEV Over Compliance
Credits calculated?
gCO2/mile below
Manufacturer
US PC and LDT Fleet Average
x
Sales GHG Standard
Manufacturer
Fleet Average
GHG Standard
27 GHG-ZEV Over Compliance Credits: 1962.2(g)(6)(C)
2018+
MYs
GHG-ZEV Over Compliance
Manufacturer Fleet Average GHG Standard
Ʃ [
gCO2/mile Target Value
for each model
x
]
# of vehicles sold
for each model
Total production Volume
(PC, LDT, and MDV)
Target values based on unique model type (PC, LDT, or MDV)
and vehicle footprint (CCR, Title 13, 1961.3)
Must include ZEVs in calculation
28 LEV III GHG-Exhaust Emissions Standards: CCR, Title 13, 1961.3
2018+
MYs
GHG-ZEV Over Compliance
Over Compliance Calculation
Manufacturer
Fleet
Average GHG -
Ʃ [ gCO2/mile
from each model
# of
emissions values x vehicles
per model
]
Standard Total production Volume
(PC, LDT, and MDV)
𝐠𝐂𝐎𝟐 Τ𝐦𝐢𝐥𝐞 = (𝟎. 𝟓𝟓 𝐱 𝐂𝐢𝐭𝐲 𝐂𝐎𝟐 ) + (𝟎. 𝟒𝟓 𝐱 𝐇𝐢𝐠𝐡𝐰𝐚𝐲 𝐂𝐎𝟐 )
Where:
City CO2 is based on FTP test Cycle
Highway CO2 based on Highway Fuel Economy Test
29 LEV III GHG-Exhaust Emissions Standards: CCR, Title 13, 1961.3
2018+
MYs
GHG-ZEV Over Compliance
GHG Emission Values for ZEVs
BEVs
𝐶𝑖𝑡𝑦/𝐻𝑖𝑔ℎ𝑤𝑎𝑦 𝐶𝑂2
= (270 𝑔𝐶𝑂2 𝑒Τ𝑘𝑊ℎ) 𝑥 𝐸𝐸𝑉 − 0.25 ∗ 𝐶𝑂2 𝑡𝑎𝑟𝑔𝑒𝑡
Where: 𝐸𝐸𝑉 𝑖𝑠 𝑚𝑒𝑎𝑠𝑢𝑟𝑒𝑑 𝑓𝑟𝑜𝑚 𝑡𝑒𝑠𝑡 𝑐𝑦𝑐𝑙𝑒 (𝑆𝐴𝐸 𝐽1634)
FCEVs
𝐶𝑖𝑡𝑦/𝐻𝑖𝑔ℎ𝑤𝑎𝑦 𝐶𝑂2
= (9132 𝑔𝐶𝑂2 𝑒Τ𝑘𝑔 𝐻2 ) 𝑥 𝐻𝐹𝐶𝑉 − 𝐺𝑢𝑝𝑠𝑡𝑟𝑒𝑎𝑚
Where: 𝐻𝐹𝐶𝑉 = ℎ𝑦𝑑𝑟𝑜𝑔𝑒𝑛 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 (𝑆𝐴𝐸 𝐽2572)
30 LEV III GHG-Exhaust Emissions Standards: CCR, Title 13, 1961.3
2018+
MYs
ZEV Requirement
Total ZEV Credit Percentage
Requirement for 2018 and
Subsequent MY Vehicles
22.0%
19.5%
17.0%
14.5%
12.0%
9.5%
7.0%
4.5%
2018 2019 2020 2021 2022 2023 2024 2025 +
Model Year
31 Percentage ZEV Requirements: 1962.2(b)(2)
2018+
MYs
ZEV Requirement
ZEV Percentage Requirements for LVMs
Minimum ZEV Floor - Portion of ZEV requirement
that must be met with ZEV credits
TZEV Credits - Portion of requirement
that may be met with credits from 6.0%
TZEVs 5.5%
5.0%
4.5%
4.0%
3.5% 16.0%
14.0%
3.0% 12.0%
2.5% 8.0% 10.0%
6.0%
2.0% 4.0%
2018 2019 2020 2021 2022 2023 2024 2025 +
Model Year
32 Percentage ZEV Requirements: 1962.2(b)(2)
2018+
MYs
ZEV Requirement
Example: LVM Model Year 2018 Compliance
Average Total ZEV Vehicles Number of
Production Requirement Produced Vehicles
Volume = = 4.5% Produced
100,000
TZEV = 2.5% Up to
TZEV that earns 0.8 3125 TZEVs
Up to 2500 credits credits per vehicle
from TZEVs and
Minimum ZEV
Floor = 2.0% At least
500 ZEVs
2000 ZEV credits ZEV that earns 4
credits per vehicle
33 Citation
2018+
MYs
ZEV Requirement
IVMs may meet entire ZEV
percentage requirements with
credits from TZEVs
TZEV Credits
22.0%
19.5%
17.0%
14.5%
12.0%
9.5%
7.0%
4.5%
2018 2019 2020 2021 2022 2023 2024 2025 +
Model Year
34 Percentage ZEV Requirements: 1962.2(b)(2)
2018+
MYs
Rules on Credit Use
General Rules
ZEV credits produced in excess of a
manufacturer’s requirements may be
“banked” for future use
Credits earned from all types of vehicles may
be traded or sold to any other party
No, we do not know how much a credit costs
Traded credits can be used the same way earned
credits can
Not applicable to GHG-ZEV Over Compliance
Credits
35 Use of ZEV Credits: 1962.2(g)(6)
2018+
MYs
GHG-ZEV Over Compliance
Use of GHG-ZEV Over Compliance Credits
Must be used for MY earned
Must be removed from manufacturer’s GHG
compliance bank
Cap on overall requirement as well as ZEV
specific requirement
2018 2019 2020 2021
50% 50% 40% 30%
Cannot be traded to another manufacturer
36 GHG-ZEV Over Compliance Credits: 1962.2(g)(6)(C)
2018+
MYs
GHG-ZEV Over Compliance
Example: Model Year 2018 LVM Compliance
Average Total ZEV Reduced ZEV
Production Requirement = Requirement =
Volume = 4.5% 2.25%
100,000
1250 TZEV Credits
2500 TZEV
Credits 1250 Over
50% Cap Compliance Credits
Total
2250 Over
1000 ZEV Credits Compliance
2000 ZEV Credits Total
Credits
50% Cap
ZEV Floor 1000 Over
Compliance Credits
37 GHG-ZEV Over Compliance Credits: 1962.2(g)(6)(C)
2018+
MYs
Rules on Credit Use
2025
Credit Type 2018 2019 2020 2021 2022 2023 2024
+
BEVx 50 % Minimum ZEV Floor
GHG-ZEV Overall
Total ZEV and
Over Cap of 50% 50% 40% 30%
Minimum ZEV Floor
Compliance 50%
ZEV
ZEV TSC Floor 10% Total ZEV and Minimum ZEV Floor
TZEV TSC 10% TZEVs
Reduced IVM 100% 25% TZEVs
AT/PZEV
and NEV LVM 25% TZEVs
ZEV Requirement
Color Key:
Portion of ZEV Req that may be met with TZEV Credits
38 Generation and Use of Credits: 1962.2(g)
2018+
MYs
Travel Provision
“Counting Specified ZEVs Placed in a Section
177 State and in California”
Credits earned in one state may also be earned
in every state at a proportional value
Only FCEV allowed to “travel” 2018 and beyond
Credits cannot “travel” more than once
Credits travel at Proportional Value
Ratio of S177 State sales to CA sales
39 Counting ZEVs Placed in S177 States and CA: 1962.2(d)(5)(E)1.
2018+
MYs
Travel Provision
How “Travel” Provision Works
Example 1: Example 2:
Credits Travel Credits Travel
from California from State B
(4 credits per vehicle)
x 1000 vehicles = x 1000 vehicles =
4000 credits 4000 credits
STATE CA STATE A STATE B STATE C
PRODUCTION VOLUME 100,000 75,000 50,000 25,000
PROPORTIONAL VALUE 100% 75% 50% 25%
CREDITS AFTER TRAVEL 4000 3000 2000 1000
Credits from California remain Credits from State B reduced
40 Counting ZEVs Placed in S177 States and CA: 1962.2(d)(5)(E)1.
Through 2018+
2017 MY
Optional S177 State MYs
Compliance Path
Encourages manufactures to produce additional
ZEVs in the S177 States prior to 2018
Requirements
Additional ZEV Requirement in each S177 state
Model Years Additional S177 State ZEV Requirements
2016 0.75%
2017 1.50%
Must be met with “Fresh” (untraveled) ZEV credits
Must be met by June 30, 2018
41 Optional S177 State Compliance Path: 1962.2(d)(5)(E)2.
Through 2018+
2017 MY
Optional S177 State MYs
Compliance Path
Advantage of Optional S177 Compliance Path
Reduction in portion of requirement that may be
met with TZEVs in 2015 – 2018 MYs
Reduced ZEV requirement in 2018 – 2020 MYs
Allowed to “pool” 2012 and subsequent MY ZEV
and TZEV credits
ZEV Credits 2016 – 2021 compliance years
TZEV Credits 2015 – 2021 compliance years
Allows manufacturers to place vehicles in areas
of high demand within a geographic region
42 Optional S177 State Compliance Path: 1962.2(d)(5)(E)2.
Through 2018+
2017 MY
Optional S177 State MYs
Compliance Path
Regional Pools
East Region Pool
Additional 30 % Connecticut
Premium
West Region
Pool Vermont Maine
Oregon No penalty
Rhode for credit
Island transfer Maryland
within pool
In order to meet a requirement
of 100 credits in OR, 130 New York New Jersey
credits would need to be
transferred from East Region
Massachusetts
43 Optional S177 State Compliance Path: 1962.2(d)(5)(E)2.
Through 2018+
2017 MY
Optional S177 State MYs
Compliance Path
S177 State ZEV % Requirements for LVMs
10.00%
9.00%
Additional “fresh” credit
percentages
8.00%
1.5%
7.00%
0.75%
6.00%
5.00%
0.75% 0.60% 0.45% 0.75%
4.00%
3.00% 0.25%
1.0%
2.00%
1.00%
0.75%
0.00%
2015 2016 2017 2018 2019 2020
Model Year
Minimum ZEV Floor Minimum ZEV Floor – Optional S177 State Compliance
TZEV Credits TZEV Credits – Optional S177 State Compliance
44 Optional S177 State Compliance Path: 1962.2(d)(5)(E)2.
Through 2018+
2017 MY
Optional S177 State MYs
Compliance Path
S177 State ZEV % Requirements for IVM
Additional “fresh” credit
percentages Prior to 2018 MY -
IVMs could meet
14.00% 1.5%
0.75% entire ZEV %
12.00% Requirement with
credits from PZEVs
10.00% 0.75% 0.60% 0.45%
PZEV Credits
8.00%
PZEV Credits–
6.00% Optional S177
State Compliance
4.00%
2.00%
0.00%
2015 2016 2017
45
2018+
Optional S177 State MYs
Compliance Path
Additional Flexibility for IVMs 2018 and beyond
Must choose the Optional S177 State Compliance
Path by September 1, 2016
IVMs can start “pooling” 2012 and subsequent MY
ZEV and TZEV credits in MY 2018
Additional “Fresh” ZEV Requirement 2 years prior to
Model Years Additional Section 177
State ZEV Requirements
2 model years prior to LVM transition 0.75%
1 model year prior to LVM transition 1.50%
Not eligible for reduced credit percentages
46 Optional S177 State Compliance Path: 1962.2(d)(5)(E)2.
Demonstration of Compliance
Manufacturers must submit all ZEV production
data by May 1 of the calendar year following the
compliance model year
Oregon – Data due September 1
Supplemental data may be submitted through
September 1
Vehicles delivered/placed April 1 and June 30
CT, ME, and RI do not have supplemental reporting
period, all data due May 1
Compliance data submitted via the online
reporting tool (ZEV-CRDT System)
47 California Emission Standards and Test Procedures: 2018 + MYs
2018+
MYs
Demonstration of Compliance
Production data, credit balances, and credit
transfer information published annually
Released early October following the end of
each compliance year
CT, ME and RI publish data in early June
Data available on the ZEV Program Page
arb.ca.gov/msprog/zevprog/zevprog.htm
48 California Emission Standards and Test Procedures: 2018 + MYs
2018+
MYs
Penalties
Requirement to make up ZEV Deficit
Must make up a deficit by the next model year
IVMs may request up to three consecutive model
years to make up a deficit
Subject to ARB Executive Officer approval
LVMs may only use ZEV credits
IVMs may use ZEV and TZEV credits
If the manufacturer still fails to comply, the
manufacturer is subject to financial penalties
outlined in HSC 43211
49 Generation and Use of Credits: 1962.2(g)(8)
2018+
MYs
Penalties
Health and Safety Code 43211
$5,000 penalty per vehicle not produced
1 ZEV credit = lowest amount of credit
that can be earned by a pure ZEV
1 ZEV credit = 1 vehicle
Therefore, $5,000 penalty per each ZEV
credit not produced
Penalty is additional to credits owed
50 Generation and Use of Credits: 1962.2(g)(8)
2018+
MYs
Thank You
Thank you for participating in the 2016
ZEV Tutorial
51 Citation
