Silver and Gold: Nevada Joins California in the Gas War

On Monday, Nevada Governor Steve Sisolak announced that his state will embrace California-crafted emissions rules that are at odds with the national rollback finalized by the Trump administration in March.

Officially, Sisolak said the rules would not require residents to abandon their current ride “or choose one that does not work for their lifestyle or business needs.” Nevada has, however, decided to adopt higher mpg standards, as well as the Golden State’s zero-emission vehicle (ZEV) rules that require manufacturers to sell a certain number of electric or plug-in hybrid models each year based on the total number of vehicles sold within the state.

Companies in compliance accrue ZEV credits, which can then be traded or sold to other manufacturers for money. As with the Corporate Average Fuel Economy (CAFE) system, those that cannot hit their targets (or afford to buy up credits) will be fined. Tesla actually used such arrangements to make $594 million off its rivals in 2019, with the prospect of things only getting more lucrative for the all-electric brand.

The California Air Resources Board (CARB) releases annual credit bank balances each year, as well as the total number of vehicles produced for that model year broken down by type. And it has gotten quite popular among Democrat-run states, with many vowing to support California by adhering to its emission mandates (to varying degrees) instead of the revised federal standards.

According to Reuters, Nevada plans to enact the ZEV rules beginning in the 2025 model year, though automakers will be able to start earning credits starting in the 2023 model year. It will also adhere to the Obama-era mandates, deemed unsustainable by that administration’s own EPA, in solidarity with California. This requires 5 percent annual increases in efficiency through 2026 vs the current administration’s adjusted requirement of just 1.5 percent each year.

From Reuters:

California’s vehicle emissions rules, which are more stringent than rules advocated by the Environmental Protection Agency under President Donald Trump, are currently followed by states accounting for more than 40 percent of U.S. vehicle sales.

In September, a group of 23 states sued to block the Trump administration from undoing California’s authority to set strict car pollution rules and require more electric cars.

John Bozzella, who heads an auto trade group [the Alliance for Automotive Innovation] representing General Motors, Volkswagen Group, Toyota Motor Corp. and other major automakers, noted that by 2025, the industry’s investment in electric cars will exceed $200 billion.

“[Manufacturers] are committed to working with Governor Sisolak and state regulators toward a smoother transition to ZEV adoption that includes expanded consumer awareness, infrastructure, incentives, fleet requirements, building codes, fuel requirements, and more,” Bozzella said in a statement.

Automakers have been playing both sides of this argument for some time, so don’t consume any of their messaging on the issue without a side plate of skepticism. Their main goal is to avoid being shut out of any market while also avoiding punishment from regulators. Let’s not forget that industry leaders came to Donald Trump en masse during his first days in office to beg for an emissions rollback — among other favors. Former Ford CEO Mark Fields even told the then-novice president that the Obama-era rules would put a million American jobs in jeopardy. Maintaining factory employment ultimately turned out to be one of the keystone arguments used by the DOT and EPA to rationalize the rollback.

While we cannot speak to the validity of those claims, the general assumption is that EVs’ simpler hardware requires far fewer labor hours and less regular maintenance. Environmentalists have claimed this would be offset by new positions that blossom in the wake of advancing green tech, however.

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