Hydrogen Car Prospects Sputter
Even California, which wants to lead the U.S. in green technology, can't seem to will technology to evolve fast enough. At least, that was the conclusion last week when California regulators confronted the stark reality that the state won't be able to strong arm manufacturers into making as many hydrogen-fueled cars by 2014 as regulators had once hoped.
The California Air Resources Board voted unanimously during the last week of March to scale back the ambitious automotive clean air rules it adopted five years ago. The board ruled that the six largest automakers operating in the state will collectively need to produce 7,500 zero-emissions vehicles by 2014--a whopping 70% fewer than the 25,000 ZEVs it had mandated in 2003.
This is the fourth revision of California's clean air standards since the state instituted its first zero-emissions vehicle mandate in 1990.
The new ruling relieves pressure on automakers such as General Motors (nyse: GM - news - people ) and Toyota (nyse: TM - news - people ) that have focused much of their clean vehicle programs on cars that rely on batteries to reduce fuel consumption and emissions.
Under the latest revision, the automakers will be able to substitute 58,000 plug-in hybrids to compensate for the reduction in zero-emissions vehicles. GM is designing its Volt plug-in electric, a car designed to run for 40 miles between charges on batteries, for 2010 introduction.
Toyota has sold 1.2 million hybrids like its Prius since 1997 and plans to roll out a limited number of plug-in versions of its hybrid to fleet users within two years.
The ruling vexed staunch environmentalists. "Overall, we're disappointed," says Spencer Quong, a vehicle analyst at the Union of Concerned Scientists. Environmentalists had known that the standard would be lowered. They had hoped, however, the revised formula would keep the number of plug-in hybrids high. "The board's changes resulted in a loss of about 14,000 pure ZEVs and plug-in hybrids" over what the Air Resources Board staff had recommended going into the meeting, Quong says.
As a result, only about 4% of the cars sold in California in 2014 will have to have zero-emissions designs. Automakers have argued that regulators need to take into a account two realities: that the hydrogen infrastructure is far from adequate to support everyday drivers and that battery technologies have improved substantially over the past five years.
"We can build 2,500 or 25,000 hydrogen vehicles," says GM spokesman Dave Barthmuss. "But without adequate fueling infrastructure, we're going to be extremely limited in where we can place them in California."
The state has just two dozen hydrogen-fueling stations, and only one "700-bar pump"--a type of pump that can completely fill up a vehicle like GM's 180-mile range Equinox because the hydrogen is twice as compressed as in typical fueling pumps.
GM has already sent 40 Equinoxes onto the California roads, providing the cars to customers in two zip codes in Southern California with requisite hydrogen stations. As part of the California ruling, the Air Resources Board has 15 days to come up with initial suggestions for how to create a more extensive refueling infrastructure. "This is the first formal proceeding in which the Air Resources Board has talked about infrastructure," says Jamie Knapp, coordinator of the ZEV Alliance, which lobbies for cleaner cars.
The Air Resources Board sees its mandates as a way to speed new technologies to market. "We're trying to force people to do more than they normally would, but we don't want an incentive to put all their technologies' eggs into one basket," said Tom Cackette, deputy executive officer at CARB. "Five years ago, plug-ins weren't on anyone's mind. Getting them to market early will open the way for pure electric vehicles as well."
Despite reducing the number of ZEVs, he says the new rules will nevertheless result in cleaner air. There will be a 7,000-ton reduction in smog forming emissions, and 5,500 fewer tons of carbon dioxide emissions between 2012 and 2017, thanks to a greater number of greener vehicles.
Automakers estimate that the clean technologies will cost them a collective $1 billion per year between 2012 and 2014, when the clean vehicles will go into production.
Under the scheme, GM, Ford, Chrysler, Toyota, Honda (nyse: HMC - news - people ) and Nissan (nasdaq: NSANY - news - people ) will need to produce 58,000 plug-in hybrids and 7,500 zero-emissions vehicles, which can be powered either by batteries or hydrogen fuel cells. (Car makers selling fewer than 60,000 cars a year in California, which for now include Mercedes, BMW and VW, are exempt.)
But the recipe of precisely what types of cars manufacturers need to make is complex: If a car maker produces a small number of hydrogen-powered cars that can go a long distance, they won't be required to make many electrics.
The requirements are "fluid," says Cackette. "As new technologies come out, we can help push them to market."