Analysis of the Effect of Zero-Emission Vehicle Policies: State-Level Incentives and the California Zero-Emission Vehicle Regulations

Release Date: September 7, 2017

Introduction

The U.S. Energy Information Administration (EIA) contracted with Leidos to analyze the effect of California zero-emission vehicle regulations (ZEVR) and state-level incentives on zero-emission and plug-in hybrid vehicle sales.
Leidos worked to review the effect of state-level incentives by:

• Conducting a review on the available incentives on zero-emission vehicles and related transitional vehicle types such has plug-in hybrid electric vehicles
• Quantifying the effective monetary value of these different incentives
• Evaluating the combined values of these incentives in each state on an example sale of a Nissan Leaf and Chevrolet Volt

Leidos worked to project the effect of the California ZEVR by:

• Reviewing California's mid-term review, credit reports from adopting states, and historical sales trends and credit balances
• Developing an Excel based model to project sales under potential scenarios and compliance pathways through 2025 based on AEO2017 projections

Recognizing that historical data for adoption of these vehicles is limited, the number and type of available zero-emission and plug-in hybrid electric vehicle models is increasing, and capabilities are changing rapidly, Leidos recommended further study as more data become available. Suggested further study includes:

• Expanding the ZEVR projections to include hydrogen fuel cell vehicles
• Improving the granularity of the state level analysis to a monthly level

EIA plans to use this report to improve projections for sales of these vehicle types and modeling methodology for the ZEVR in the Annual Energy Outlook 2018. Example modeling improvements will include credit banking and spending, and the Section 177 state alternative compliance pathway. Through this added capability, EIA can examine various compliance pathways through different bank utilization rates and sales strategies.