Tesla Motors is all set to defend the mandate in California which says that around 15% of the cars sold in the state should be zero-emission vehicles by 2025, says a report from Automotive News. Though the mandate is good for Tesla, for other automakers, it may not be easy to comply with the requirement.
Mandate already “weak”
Other automakers are requesting significant changes in the rule, including the permission to comply using plug-in hybrids instead of pure electric vehicles and fuel-cell cars. Meanwhile, the Palo Alto-based car manufacturer wants to ensure that auto dealers such as Fiat Chrysler, Ford, General Motors, Honda, Nissan and Toyota do not get their demands met. These six car companies should either ship a specific number of ZEVs or buy “credits” from companies such as Tesla to compensate for their shortfalls.
Terming the mandate as “weak,” Tesla Vice President of Business development Diramund O’Connell said pure-play electric cars such as Tesla were never imagined to be a successful entity, but then the company nailed it. “The inconvenient truth is that our success has revealed the weakness of the mandate,” O’Connell said. Tesla is eying California as one of the major regions where it can sell its Model S and other upcoming cars.
Major automakers have asked regulators to amend the mandate with a new formula which would be based on miles traveled on electric power, or e-miles, allowing them to sell more plug-in hybrids. However, Tesla is not ready to give in without a fight, which is why it has defended the rules challenging rivals publicly, going against the usual decorum of lobbying, in which companies talk about their interest and not criticizing the competition in public.
Tesla takes the fight public
Tesla made its stance clear on May 23 during a hearing of the California Air Resources Board in the state capitol. At the hearing, Tesla opposed the leniency plea from automakers including Mazda, Subaru and Jaguar-Land Rover, which argued that their size restricts them from coming up with pure EVs.
Although Tesla could benefit from the stricter mandate as it reported $152 million in revenue in 2014 from sales of ZEV credits, which is 5% of its total revenue, CEO Elon Musk, in May, termed it as not a “big deal.” O’Connell told Automotive News that credit revenue was once a hot item for Tesla, but not anymore.