Nissan Takes Tesla’s Lead


There is a new venue that is opening up for the market for electric vehicles. This is not a race to sell cars but in giving away credits required to meet stringent clean air rules in specific areas.

California has made this possible starting 2012 through the requiring automakers to sell “zero emission vehicles” or ZEV’s like purely electric, plug-in hybrids and hydrogen powered vehicles. Should these carmakers not fulfill these requirements, they have the option of purchasing ZEV credits from rival carmakers that exceed their targets.

These regulations would soon be made effective in other states, such as New York, New Jersey and Massachusetts. The regulators would be expecting that the six largest carmakers would be selling a combined 60,000 zero-emission autos in those twelve states through 2014 or a total of 1.4 million vehicles by 2025.

One of the most successful carmakers in this regard is Nissan Motor Co., and it has recently announced plans to sell the credits earned with the best selling all electric car in the United States, the plug in electric Leaf.

According to Andy Palmer, an EVP at Nissan, “We are in a fortunate position of having positive credit, so that’s obviously something we are able to look at. We are exploring some plans, but we haven’t announced anything yet.”

Many experts believe that Nissan would take the route of Tesla Motors Inc., who in June 2010 sold its earned credits to Honda Motor Co and another automaker. The said sale specifications that includes the number of credits or the price of the sale, was not disclosed to the public. Carmakers earn credits for sales of electrics or plug in hybrids when they meet the thresholds and failure to gain credits can lead to fines or even curtailment of their ability to sell their vehicles.

According to Dave Clegern, spokesperson for the California Air Resources Board, “This is a way to address California’s unique air-quality issues and reduce greenhouse gas emissions. We think there’ll be growing demand for the vehicles and it’s a framework to get them to customers.” The ZEV program is being run by the CARB and heaviest burden falls on Toyota by having the largest market share in California, followed by Honda, Ford, General Motors, Nissan and Chrysler.

The number of credits earned per vehicle sold depends on a number of factors. These include its range and the rate of recharging of the vehicle’s battery array. Thus, a vehicle with a hundred mile range with standard charging, this would earn three credits. The vehicles at this level would be the Nissan Leaf and the Ford Focus. The Tesla Model S on the other hand, with its longer range and fast charging, it can earn seven credits.

By 2018, these requirements would apply to largest carmakers from US and Japan and soon to include Hyundai, Kia, Daimler AG, Volkswagen AG, BMW and Mazda.