1. Discussion on Adoption of CA LEVWednesday, December 5, 2007 Gregory Dana Consultant to The Alliance of Automobile Manufacturers

2. Lead Time Issues • Under the CAA, states must give manufacturers 2 years lead-time • This is based on a model year beginning January 2nd and ending the following December 31st • It takes about 3-4 years to design a new vehicle • It takes about 6-7 years to design a new engine and powertrain

3. ZEV Mandate “Zero Emission Vehicle” • History: • 1990 California adopts ZEV mandate: • Calls for 10% of all new vehicles emit zero emissions. • CARB later acknowledges this was not economically feasible and dramatically scales back the program. • EPA said in a rulemaking on January 25, 1995 that the ZEV mandate was separable from the LEV program • “a LEV program….need not include the ZEV sales requirement.” • ME did not adopt the ZEV mandate initially, but did so later • WA does not have the ZEV mandate

4. ZEV Mandate • Today: • ZEV mandate focuses on fuel cell vehicles (which cost $500K to $1M) • The most recent proposed changes again push battery electric cars, plug-in hybrids and fuel cell vehicles • The ZEV mandate will require costly new infrastructure requirements in the State • ie: fueling stations

5. PZEV Requirements “Partial Zero Emission Vehicle” • A PZEV is a vehicle that meets the SULEV (“super ultra low emission vehicle”) standards and has a 15 yr/150,000 mile warranty • SULEV: • 0.010 HC, 1.0 CO, and 0.02 NOx • These standards are 120, 000 mile standards

6. Recalls and Warranties • Any CARB recall applies to all CA certified vehicles in any state • “Super warranty” applies to the 15yr/150K mile warranty that PZEVs have to meet • These warranties are expensive for the manufacturer • The aftermarket service industry feels these provisions take business away from them

7. Car and Light Truck Statistics • In FL, 51% of the new vehicle fleet is cars, 49% is light trucks • Of the light trucks, the breakdown is: • 56% SUVs • 12% Minivans • 28% Pick-up trucks • 4% Vans