Small-volume car manufacturers wouldn’t be required to sell zero-emission vehicles in Nevada under the state’s proposed ZEV program, but if they did, they could earn credits to bank or transfer through the state market.

In contrast, large-volume automakers would be required to earn credits for the sale of ZEVs. Medium-volume manufacturers could meet their credit requirements by selling either ZEVs or transitional zero-emission vehicles, such as plug-in hybrids.

Those were some of the details discussed last week during a technical session on the Clean Cars Nevada program, hosted by the Nevada Division of Environmental Protection (NDEP).

Rulemaking is underway for the program, which NDEP hopes will go to the State Environmental Commission for approval in September. With all the necessary approvals, the program could take effect for model year 2025 cars.

Clean Cars Nevada has two parts. In addition to the ZEV program, it includes a low-emission vehicle (LEV) program. The programs are largely based on similar programs in California.

Last week’s technical session focused on the ZEV program.

Volume-based Requirements

The ZEV program would require vehicle manufacturers that sell cars in Nevada to produce a specified amount of ZEV credits by delivering zero-emission vehicles to the state.

The requirements vary depending on whether the automaker is considered to be small-, medium- or large-volume, said Danilo Dragoni, chief of NDEP’s Bureau of Air Quality Planning. Mitsubishi is an example of a small-volume automaker, according to NDEP, while Subaru and Mazda are intermediate-volume and Ford and General Motors are large-volume.

Starting in model year 2025, intermediate- and large-volume automakers would face a credit requirement equal to 22% of their passenger car and light-duty truck sales in the state averaged over three years. For example, a car maker that sold an average of 40,000 light-duty vehicles per year from model year 2021 to 2023 would need 8,800 ZEV credits for 2025

For a large-volume automaker, at least 16% of the average total sales — or 6,400 credits in the example — would need to come from ZEVs, defined as battery electric vehicles or fuel cell electric vehicles.

The remaining 6% — or 2,400 credits in the example — could come from transitional zero-emission vehicles (TZEVs). These include plug-in hybrid electric vehicles and hydrogen internal combustion engine vehicles.

Intermediate-volume automakers would not face a ZEV credit minimum. They could meet their credit requirement with any mix of ZEVs and TZEVs, Dragoni said.

Small-volume car makers wouldn’t have ZEV requirements under NDEP’s proposed rule. Still, they could generate credits to bank or trade on the Nevada credit market. One reason a small-volume automaker might want to bank credits is that it expects to grow into the intermediate-volume category, according to NDEP.

Dragoni also explained the formula for converting car sales to ZEV credits. The formula is based on how far an EV can travel on a single charge, under city driving conditions.

The vehicle’s range is multiplied by 0.01, and the result is added to 0.5 to determine the number of credits. NDEP cited as an example the Tesla Model 3. With a range of roughly 340 miles, it would earn 3.9 credits per vehicle.

The vehicle earns no credits if its range is less than 50 miles, and the maximum number of credits per vehicle is four.

A different formula applies to TZEVs. The range is multiplied by 0.01, and the result is added to 0.3. Using this formula, a Chevrolet Volt with a range of about 30 miles would earn 0.6 credits, NDEP said.

The maximum credits per vehicle is 1.1. No TZEV credits are earned if the vehicle’s range is less than 10 miles.

The program would keep ZEV and TZEV credits in separate accounts.

Steep Climb to 22%

Dragoni acknowledged that going from no ZEV credit requirements in Nevada to a 22% requirement for model year 2025 would be a steep climb for manufacturers.

To help with the transition, the Clean Cars program would allow automakers to accumulate credits from ZEVs sold before the program starts. The draft regulation includes early credits for model years 2023 and 2024.

NDEP has also proposed an “initial proportional credit” based on credits an automaker has in California. The California credits would be multiplied by a factor that accounts for different sales volumes in Nevada and California.

The division might also cap the amount of initial proportional credit.

The initial proportional credit would help reduce manufacturers’ “compliance uncertainty” during the early years of the program, according to NDEP’s presentation.

“NDEP is committed to finding an approach that maximizes air quality benefits but also provides the best strategy for compliance,” the agency said.

Is Sooner Better?

Some stakeholders would like to see early ZEV credits start even sooner.

Chris Nevers, director of environmental engineering and policy for Rivian, a company that makes electric “adventure vehicles,” argued for a model year 2022 start for early credits.

Waiting until model year 2023 to offer early credits would encourage car makers to delay delivery of EVs to Nevada, Nevers said in a letter to NDEP, and the proportional credit would also disincentivize ZEV sales before 2025.

“In addition to jump-starting Nevada’s public health and climate goals, model year 2022 early ZEV credits would drive infrastructure investment and utilization,” Nevers said.

Adam Mohabbat, market development manager for EVgo, said in a letter to NDEP that the ZEV program would give Nevadans more electric vehicle options. EVgo is the largest public fast-charging network for EVs in the U.S., Mohabbat said, and the company has 18 public charging locations in Nevada.

“EVgo is prepared to scale even further — and bring more investment to the state — to meet the increased demand for even more public charging infrastructure in the state if ZEV is implemented,” he said.

Additional Info

In addition to the March 30 technical session on ZEV credits, NDEP hosted a technical session on the LEV program on Feb. 23.

A third technical session, scheduled for April 27 at 9 a.m., will dive into details of the ZEV credit bank.

More information and recordings of past technical sessions are available on the Clean Cars Nevada website.