ESYS10 2005 Case Study 1

Should Alex Buy a Hybrid Car?

The scene: Lunchtime at a crowded cafe on campus. Baylor, Chris, and Dale are grabbing a bite to eat as they compare notes about their perpetual on-campus parking woes. From across the cafe, Baylor spies Alex.

Baylor: Hey, Alex! Come join us. Where have you been? We haven’t seen you in weeks.

Alex saunters over to their table and pulls up a chair.

Alex: Can’t stay long. I’m shopping for a new car.

Chris: Whatever for? Your car is still running, isn’t it?

Alex: It’s my New Year’s Resolution for 2005. I decided that I’d like to live a more environmental lifestyle. So I’m going to be part of California’s Partial Zero Emission Vehicle program and buy a hybrid. I want to buy a car that doesn’t pollute nearly as much as my trusty old Jeep Cherokee.

Dale nearly chokes on a cup of coffee.

Dale: A hybrid? You’re crazy! When the California Air Resources Board started their ZEV program in 1990, they were operating in fantasy land, just hoping that by mandating that 10% of the cars sold in California by 2003 they could force car manufactures to develop electric vehicles. But car manufacturers are market driven. They couldn’t justify developing complicated new technology if consumers wouldn’t buy it. People sure didn't go for those ZEV cars. The State of California has had to relax the ZEV guidelines several times since the 1990s, just to prevent the automakers from suing the state for creating an unfair business environment. What’s the deal now? They require 6% of cars sold to be PZEVs? ZEVs had no resale value, so how do you expect a PZEV to? They're way overpriced. Besides, what are you going to look like driving around in one of those underpowered tin cans?

Alex (interjecting): Actually people are lined up for miles trying to get Prius Hybrids, and I think I can find a cheaper used one, maybe. And the newest Ford Focus meets all the emissions standards and no one could say it's underpowered. But it won't save me much at the gas pump. ZEVs with hydrogen fuel cells have a range of more than 200 miles, although they’re outrageously expensive and only available for lease at present. No mere mortal who doesn't work for an agency that has leases on experimental fuel cell cars will get to drive one. Maybe I should call Uncle Harold, with his three houses and 10 cars, and see if he'll advance me the cash!

Dale (continuing on): And you absolutely don’t want to drive a small under-powered car, especially now that over 50% of the vehicles sold in the U.S. are big S.U.V.s and trucks.

Chris: I agree with Dale that you shouldn’t buy a new hybrid, but I disagree with Dale’s reasons. I argued against your buying a electric ZEV last year and I still believe what I said, only now you've gone and decided to settle for a PZEV. Even ZEVs just aren’t sufficiently environmental to justify their cost. For one thing, manufacturing a new car uses an enormous amount of metals, plastics, and lots of energy. And then once they're built, you still have to fuel them. And your PZEV will still pollute. If you really want to live the pure and simple life, you should stop driving your car altogether. Save it for emergencies if you have to, but take the bus or bicycle to get around day to day.

Alex: I thought about giving up my car altogether, but the bus routes really don’t meet my needs, and I just hate bicycling on all these roads with drivers who act like they've never seen a bike before. Plus, it’s tough to take a group of friends to the movies on the back of my bike. All in all, I estimate that I use a car often enough that I may as well make it an efficient vehicle.

Baylor: None of you guys know what you're talking about. You can get a brand new Ford Focus or a Mazda for a whole lot less money than a hybrid, and be perfectly happy with your environmental ethics since they're PZEVs too. Or if you've got the money for a hybrid, why not get a BMW? Or if you're just into getting great mileage, why aren’t you looking at diesel cars? They don't have all the fuss of brand new technology. How are you going to know how to take care of a hybrid? I bet you'll have to have to keep going back to your dealer and we all know what they charge. My cousin's getting more than 50 miles to the gallon, in the city and on the highway, in her diesel Beetle.

Alex: I’ve thought about diesels too, just to save at the gas station, but they just aren’t PZEVs. I really, really wanted a ZEV, and I let you guys derail me last year when we went through this same discussion. Turns out I didn't have enough money to buy a new car last year anyway. Now I can't get one. And now I've probably lost my chance to drive solo in the carpool lane. The Governor got a law passed so you can take a hybrid in the carpool lane. But the feds don't seem to be moving along with implementing his law on the interstate, at least not for now. But I'm just going to get one anyway, and maybe that'll help keep the trend towards new technology going. Besides which, there's an obsessed internet chat group that's really into their hybrids, and I can get any questions about maintenance answered by them.

Questions for all characters:

(1) What is a zero emission vehicle (or ZEV)? What is a PZEV and what are the emissions standard for it compared with an average gasoline-powered vehicle?

(2) What does the California Air Resources Board mandate for new car sales by 2010, and why? How does this differ from what it mandated prior to 2003? Why is air quality an important issue in California? How does this differ from fuel efficiency arguments for new vehicles?

(3) What about ZEV (all electric) cars? Why were they abandoned? What about hydrogen fuel cell cars?

Question for your own character:

(4) What is the point of view presented in this dialogue by your character?

(5) Based on what you know now, what are the advantages and disadvantages of the transportation choice of your character?

Extra credit:

(1) When did the California Air Resources Board meet and vote on new regulations that switched the emphasis from ZEV's to hybrids and gasoline-powered PZEVs?

(2) Who is the chief engineer for Toyota who designed the Prius?

In California, Clean Air Rules Force Changes in Autos

July 22, 2002 New York Times By DANNY HAKIM

DETROIT, July 21 -While automakers rail against landmark California legislation that would force them to cut greenhouse gas emissions by the end of the decade, they face a much more immediate challenge from the state.

On Monday, Gov. Gray Davis of California will sign a bill requiring automakers to cut carbon dioxide emissions by the 2008 model year. The bill directs the California Air Resources Board to decide how much to reduce emissions over all and how to do it.

But of more immediate concern for automakers is one of California’s last big initiatives on air pollution -a decade-old mandate to create zero-emission vehicles that could soon force them to sell more than 100,000 electric cars and other fuel-efficient vehicles in the state each year.

Although the zero-emission standard, which was scheduled to take effect with the 2003 model year, has been delayed by a court injunction, it has prompted automakers to spend billions of dollars developing technologies to cut harmful tailpipe emissions and has led them to start promoting and selling electric vehicles. In addition, New York and Massachusetts plan versions of the Z.E.V. mandate, as it is known, meaning the zero-emissions requirement could cover almost one-fifth of the American auto market. Other states could follow suit.

The mandate, set in motion in 1990, aims to cut emissions of nitrogen oxide and hydrocarbons, large contributors to smog, and particulates, which lead to respiratory ailments. But the mandate has been delayed by a legal challenge from General Motors and Daimler-Chrysler, which won an injunction in federal court last month.

State regulators have appealed and insist they will be able to tweak the regulation, if necessary, to mollify legal objections.

The rule requires large automakers to derive 10 percent of sales from vehicles that produce nearly zero emissions, including at least 2 percent from vehicles with no emissions. Auto executives say that 2 percent requirement has forced them to keep alive a technology they would just as soon give up on: the battery-powered automobile, the only pure zero-emission vehicle now made.

To comply, carmakers are already selling everything from armies of beefed-up golf carts to a few electric versions of sport utility vehicles to highly efficient versions of gas vehicles. Nissan is equipping most Sentra sedans sold in California with an extra catalytic converter. Toyota is advertising an electric version of its RAV4 sport utility vehicle on a billboard in Berkeley, at nearly double the normal price.

Some executives worry that they will have to take additional steps to meet the mandate, like subsidizing sales of costly electric vehicles and spending thousands of dollars a vehicle to convert gas cars to electrics.

“I remember I had a meeting in Tokyo where they showed me all the cost of this stuff. I said, ‘Oh my God, the others have to do this too?’ ” Carlos Ghosn, the chief executive of Nissan, said.

“Nobody believes in it, but you have to do it,” Mr. Ghosn said. “It’s a huge cost, but it’s part of the cost of doing business.”

California regulators, as well as environmental groups, counter that the rule has forced automakers to accelerate the development of cleaner technologies with sound prospects. These include hybrid engines, which run on both gasoline and electricity, as well as hydrogen fuel cells, a zero-emission technology widely considered as the power source of the future.

“They wouldn’t have been topics of discussion if not for Z.E.V.,” said Jerry Martin, a spokesman for the California Air Resources Board, the regulatory body that established the mandate. “The standard fare for drivers around the world would be 8,500-pound S.U.V.’s, probably half of them powered by diesel.” The air resources board has also modified the regulation several times to give automakers credit for cars with low emissions.

Many zero-emission vehicles in California are more golf cart than car and meant for gated communities, city-sponsored car sharing programs and corporate and government fleets. The Think division of Ford sells a beefed-up golf cart called the Neighbor for $6,500, which needs six to eight hours to recharge after traveling 30 miles. Ford is also considering bringing an electric subcompact sold in Europe, the Think City, to California.

For a Think Neighbor “we had a man trade in his Cadillac,” said H. L. Fletcher, fleet manager of Fritts Ford in Riverside, Calif., who sells 40 to 50 Neighbors a month.

Mr. Fletcher said the man, in his mid-80s, was “too old to drive a big car and bought a Think to drive back and forth from the grocery store and get himself around.”

But many car executives say the development of realistic technologies is being sacrificed for the money-losing, obsolete idea of electric cars.

California has shown some flexibility, though. Nissan, for instance, has a varied compliance plan. It makes an electric station wagon, the Altra, that can travel 100 miles between charges and is being leased to power companies like Southern California Edison. It also makes a big golf cart, the Hypermini, that is being used in Pasadena and Palm Springs for parking enforcement. And Nissan will get credits for its modified Sentra.

The most familiar vehicle is the electric version of Toyota’s RAV4, which can go up to 78 miles an hour and travel up to 126 miles before it requires a recharge. The RAV4 EV sells for $42,510, versus a $17,000 starting price for a gasoline version, although it is eligible for $13,000 in state and federal rebates. Toyota has sold 120 since February. “We lose large amounts of money on every EV we sell,” said Mike Love, Toyota’s national regulatory affairs manager. “They cost us in excess of $100,000 apiece to build.”

New York and Massachusetts have plans to adopt mandates that would give automakers until the 2006 model year before they have to produce any pure zero-emission vehicles. Until then, car companies could comply by selling hybrids, efficient gas cars or cars that use alternative fuels.

“The small neighborhood-type vehicles really aren’t as marketable here in the Northeast,” said Gina McCarthy, assistant secretary for the environment in the Massachusetts executive office of environmental affairs. “Residents in Massachusetts are really looking to get access to hybrids. They’re buying them now, and they’re on waiting lists. We want more hybrids.”

Erin M. Crotty, the commissioner of the New York State Department of Environmental Conservation, said earlier this year that the state’s Z.E.V. mandate will be a strong incentive for automakers.

For the moment, though, both states are awaiting the outcome of the legal challenge in California.

In 1990, when California’s zero-emission mandate was formulated, there were hopes that the electric vehicle would be viable for the mass market by the end of the decade. But technology has still not solved the crucial drawbacks: short range and long charging time.

G.M., now the most outspoken opponent of the Z.E.V. mandate, was a pioneer in electric vehicle development in the 1990’s with its EV-1 sedan, spending more than $1 billion before abandoning it.

G.M. plans to use credits from sales of the EV-1 to help meet the requirement, though it is not clear how it will comply if its legal challenge fails. Part of its plan, which has angered competitors, is to give away electric vehicles it has purchased from Club Car, a golf cart maker.

“You don’t mandate markets,” said Chris Preuss, a G.M. spokesman. The Z.E.V. mandate, he added, was “completely unworkable both in California and anywhere else.”

The suit in federal court filed by G.M. and DaimlerChrysler, along with some state dealers, contends the mandate is superseded by federal fuel economy standards. Though reducing gas mileage is one way to cut harmful emissions, direct action on that is reserved for the federal government. A federal judge in Fresno granted the plaintiffs an injunction last month, saying the automakers had a strong case because of a 2001 amendment that gave credits for high-mileage vehicles.

The air quality board, which at first threatened to enforce an older version of the regulation, has since appealed and says it will rewrite the mandate if necessary.

Environmental groups say they have little choice but to turn California into a battleground. The auto industry has successfully lobbied since the 1980’s to prevent significant increases in federal gas mileage standards, and the Bush administration rejected the Kyoto protocol, the international treaty to reduce global warming emissions.

Since California’s air quality regulations predate the federal Clean Air Act, it has its own, tougher rules, and other states can choose whether to follow them. The Z.E.V. rule was set in motion before global warming was a hot-button issue and was aimed at pollutants that lead to smog and other environmental hazards. Whether carbon dioxide, linked to global climate change, is itself a pollutant is a matter of much debate, but the Z.E.V. mandate will have the practical effect of curbing such emissions as well.

“It forced the auto industry to evaluate and use technologies they never wanted to even look at,” said Daniel Becker, director of global warming strategies at the Sierra Club, adding, “As a direct result of that, we have hybrid electric vehicles on sale today.”

Sacramento Bee

New year, new laws: Hybrids stall on way to car-pool lane

By Margaret Talev -- Bee Capitol Bureau

Published 2:15 am PST Thursday, December 30, 2004

Some people buy hybrid cars to reduce America's dependence on foreign oil or lessen pollution. Some just want to save money on gasoline.

For Ken Kaufman, a 58-year-old college administrator who lives about 40 miles east of Los Angeles, the strategy was even more pragmatic: He wanted to be able to drive passenger-free in the car-pool lanes.

He knew California had a new law on the books, set to take effect Saturday, allowing owners of the cleanest, most-fuel-efficient class of hybrids to do just that until 2008. But when Kaufman drove his Toyota Prius home from the dealership last month and went on the state Department of Motor Vehicles' Web site to apply for a hybrid car-pool lane permit, he hit an unexpected roadblock.

The permitting process was still pending a waiver from the federal government. And getting congressional approval for that waiver had turned out to be a much more convoluted proposition for California than the environmental organizations and a bipartisan group of elected officials behind the legislation, including Republican Gov. Arnold Schwarzenegger, thought it would be.

"I didn't anticipate the political opposition potentially of the automobile manufacturers," said the author of the legislation, Assemblywoman Fran Pavley, D-Agoura Hills, who also wrote a controversial law automakers are now suing to block, requiring them to reduce emissions in all cars.

The upshot of all this is that California's hybrid car-pool lane law isn't going into effect Saturday.

It may be months before the waiver comes, and if the debate in Washington goes on long enough, it may not go into effect at all by the time California's pilot project is set to expire.

The federal government says states need a waiver to tinker with car-pool lanes because the lanes are funded by the federal portion of the gas tax. A waiver was tucked into the omnibus transportation bill before Congress. But with a war on and election year wrangling, the package stalled. In the meantime, Ford and other American carmakers whose hybrid models don't meet the California law's 45 miles per gallon and near-zero emission standards began pushing to block or weaken the standards.

California isn't prepared to just roll the dice and let its hybrid program go forward without a waiver, as at least one state, Virginia, is doing. If it did, the federal government could retaliate by withholding billions of dollars in transportation funding. State officials say California has about 40 percent of the nation's high-occupancy vehicle, or HOV, lanes.

Right now, the only cars that meet the standards in the California law are the Prius and Honda's hybrid Civic and Insight.

Sen. Jim Talent, a Missouri Republican, introduced legislation allowing less fuel-efficient hybrids, including sport-utility vehicles, to use car-pool lanes nationwide. Talent argues that Congress should offer an incentive that encourages consumers who are going to buy SUVs to buy the hybrid variety.

But some environmentalists see that legislation as a poison pill because it would flood car-pool lanes with vehicles that, even though they use hybrid technology, might get lower mileage than traditional compact cars.

Recently, Rep. Brad Sherman, D-Sherman Oaks, has introduced separate legislation to get California its waiver, but he's unlikely to get far in a Republican-controlled Congress unless members of California's GOP delegation join his effort.

"I think we need the governor to pick up the phone," Pavley said. "I think the governor would be the key person."

If Schwarzenegger plans to do the heavy lifting, his staff isn't ready to go public about it. The administration declined to respond to repeated requests about the governor's intentions.

In the meantime, the number of California drivers who might already qualify for the special permits, an estimated 20,000 that was expected to swell to 75,000 in the next three years, will just have to wait.

Among car dealers, confusion abounds. David Coombs, assistant sales manager at Mel Rapton Honda in Sacramento, said in an interview only days ago that he didn't know the law's implementation was being stalled.

"I thought it was going to take effect in January - I hadn't heard anything to the contrary," he said.

"We use that pitch a lot, that you'll be able to use it in car-pool lanes," he said of sales of the Civic hybrid. "It's a selling point."

Eleanor Kas, a senior vice president at World Savings Bank in Oakland, said she traded in her BMW convertible for a Prius this month largely for political reasons, because she opposes the war in Iraq and felt that in a small way her purchase could reduce dependence on oil from the Middle East.

"But then when I went to the dealer to buy the car, he said he thought Priuses could go in the car-pool lanes," Kas said of her salesman. "So the dealer didn't know." She made inquiries with the DMV and the California Highway Patrol. "Nobody seemed to know."

The limbo has left many hybrid owners frustrated.

"It's delay after delay, and it's unfortunate because it would make the few of us who have hybrids very happy and it would make a very nice incentive" for would-be buyers, said Mary Fassler, who lives in Elk Grove.

But few are more irked than Kaufman. "It's a nice car," he said of his new ride. "But I would never have bought it had I not thought I could use the diamond lanes."

Some starting points:

http://www.arb.ca.gov/homepage.htm

http://www.driveclean.ca.gov/en/gv/home/index.asp

Newspaper archives are very helpful