Our fossil fuel-based transportation system has contributed significantly to climate change, created air pollution and health issues that are disproportionately acute in low-income communities and communities of color, and made drivers bear the brunt of volatile fuel prices. Transitioning to a zero-emission transportation system, therefore, is one of the most effective ways to mitigate climate change, improve air quality and health almost everywhere, and make the total cost of car ownership lower and more predictable. Fortunately, states can now take a major step toward achieving that goal by adopting the Advanced Clean Cars II (ACC II) standard.
ACC II is a set of regulations that the California Air Resources Board (CARB) recently adopted to reduce smog-causing pollution and greenhouse gas (GHG) emissions from California’s light-duty vehicle (LDV) fleet. Its predecessor—Advanced Clean Cars I (ACC I)—includes a zero-emission vehicle (ZEV) program that requires automakers to produce for sale in states an increasing number of new ZEVs each year, culminating in about 7-8% ZEV sales by model year (MY) 2025. Building on ACC I, ACC II now requires a ramp-up of ZEV sales from 35% in 2026 to 100% in 2035. Eligible ZEVs include battery electric vehicles (BEVs), plug-in hybrid vehicles (PHEVs), and fuel cell electric vehicles (FCEVs), allowing for customer choice.
As per Section 177 of the Federal Clean Air Act, other states can adopt California’s more stringent standards. Indeed, 18 states have already adopted ACC I’s ZEV standards. Now, states across the country have the opportunity to adopt ACC II to ensure a 100% zero-emission new car market by 2035. This blog aims to help decision makers and stakeholders understand the significance, logistics, and implications of ACC II as well as address common misconceptions about the regulation.
The Scope of ACC II
Under ACC II, drivers will still be able to purchase new gas cars before the 2035 deadline, and drivers can continue to drive MY 2034 and earlier model year gas cars in perpetuity. Further, the regulation only applies to new, on-road car sales and does not affect used car sales or off-road vehicles or equipment. In 2021, only approximately 26% of all cars sold in the US were new cars. Therefore, while this regulation is vital to help ensure ZEVs enter the secondary market, most drivers in the US won’t be directly impacted.
ACC II is Feasible
ACC II is a commonsense standard that helps to accelerate the transition to a ZEV future that is already in motion. This is exemplified not only by the over 114 Billion of ZEV-related investments in the US announced so far by automakers, but also by the 6% market share that ZEVs hit from January to September 2022, which already approaches ACC I’s MY 2025 ZEV sales requirement of 7-8%. Building on these, ACC II ensures that states are sending a signal to the market that they are committed to the transition to ZEVs. As seen in the Advanced Clean Cars I program, automakers are more likely to send ZEVs to states that have adopted the Clean Car regulations than to states that have not adopted the regulations, and adoption of ACC II is the best way to guarantee that ZEVs will be available for sale in a particular state. As seen in the Advanced Clean Cars I program, automakers are more likely to send ZEVs to states that have adopted the Clean Car regulations than to states that have not adopted the regulations, and adoption of ACC II is the best way to guarantee that ZEVs will be available for sale in a particular state.
The Benefits of ACC II
According to CARB, ACC II will reduce GHG emissions from light duty vehicles in California by more than 50% by 2040, and similar emissions reductions are anticipated in other states as well. ACC II is also an important strategy to improve air quality and health; the American Lung Association estimates that from 2020 to 2050, the cumulative national health benefits of a zero-emission transportation sector would include 110,000 premature deaths avoided, 2.78 million asthma attacks avoided, and 13.4 million lost workdays avoided. Better yet, adopting ACC II would reduce the total cost of car ownership for the average consumer, create new jobs, and put downward pressure on rates for all utility customers.
ZEV Model Availability
The share of new ZEV model offerings is burgeoning. Through March 2022, the powertrain options available in the US include 40 BEVs, 40 PHEVs, and 3 FCEVs. We are also no longer in an era where the only option for a ZEV is a small compact car. SUVs, in fact, enjoyed by far the largest ZEV market share in the US in 2020, and the auto industry has continued to expand its zero-emission crossover, SUV, and pickup truck models. Although ACC II would eventually make more ZEV models available across the US, ZEV states would likely receive the newest ZEV models before other states as we saw with the ACC I, since automakers would want to make sure the ZEV states met the annual compliance requirements. Adopting ACC II would therefore help to increase customer choice to access the types of ZEVs drivers want.
ZEVs Are Increasingly Affordable
Although the upfront costs of some new ZEVs are currently higher compared to comparable gas cars, many ZEV owners already see cost savings over the lifetime of their cars. According to Consumer Reports, lifetime ownership costs of all nine of the most popular EVs on the market below $50,000 were “many thousands of dollars lower than all comparable ICE [internal combustion engine] vehicles’ costs, with most EVs offering savings of between $6,000 and $10,000.” With federal funding from the Inflation Reduction Act (IRA), buyers of new EVs can save up to $7,500 upfront through 2032, and buyers of used EVs can save up to $4,000 upfront. Even without these tax credits, the International Council on Clean Transportation estimates that BEVs with ranges of 150 to 200 miles will reach price parity with comparable gas cars by 2024-2026, followed by BEVs with 250 to 300 miles by 2026-2029 and BEVs with 350 to 400 miles by 2029-2032.
ZEV Suitability for Local Conditions
Generally, ZEVs can handle most local conditions as well as, if not better than, gas cars. Even in rural areas, most ZEVs are capable of meeting local residents’ daily driving needs as their ranges typically exceed 200 miles. ZEVs might have slightly shorter ranges in cold weather, but generally still more than enough to meet most people’s daily driving needs. In Norway, where the average temperature in winter is lower than 20°F, EV market share was a staggering 86% in 2021, and is rapidly approaching the 100% goal set by the Norwegian Parliament. In mountainous areas, ZEVs’ high torque allows for rapid acceleration even on steep inclines. When going downhill, ZEVs’ regenerative braking would help recharge their batteries, thereby extending their ranges.
As of June 2022, the non-proprietary public charging infrastructure in the US already includes more than 90,000 level 2 chargers in more than 40,000 locations, and almost 10,000 DC fast chargers in more than 4,700 locations. Additionally, with the Infrastructure Investment and Jobs Act ($7.5 billion in alternative fuel infrastructure), the National Electric Vehicle Infrastructure Formula Program ($5 billion in EV charging infrastructure), the IRA, continued utility investments, private investments, and state action, we will continue to see an increasing amount of reliable and fast electric charging infrastructure not only along highways, but also within communities.
The Electric Grid can Support ZEVs
California, the state the most ZEVs in the country, has proven that ZEVs actually incur very little grid upgrade costs. A 2018 analysis of EV grid integration costs in California found that in 2017, utilities collectively spent about $500,000 on upgrades out of a collective distribution capital budget of at least $5 billion—one hundredth of one percent of total distribution capital expenditures. Furthermore, ZEVs can be used as a grid resource and as battery storage to alleviate electricity outages, especially with proper utility investments and rate designs that shift charging to time when the grid is underutilized.
Adopting ACC II would allow more ZEVs to flow into the secondary market sooner and thus accelerating the availability of clean, durable EVs to the majority of drivers. Aside from this, ACC II does have some modest equity measures such as environmental justice credits, which allow manufacturers to earn additional credits for lower cost vehicles, ZEVs placed in community car share programs or related incentives to encourage sales to low-income community members, but state agencies should meet and work directly with equity groups and automakers to develop complementary policies that will help to ensure that disadvantaged communities experience the benefits of ZEVs.
As discussed, not only is ACC II feasible, but adopting it would also yield tremendous benefits for our climate, air quality, health, and economy. States now have the vital opportunity to reap all these benefits.