According to Bloomberg, Toyota Motor Corporation could face a $1 billion charge in trying to comply with the clean air rules set by the California Air Resources Board (CARB) starting 2012.
In March 2008, I had talked about how CARB had officially chosen to promote plug-in hybrid electric vehicles in California over hydrogen and electric cars. The number of hydrogen and electric cars required to be sold was slashed from 25,000 to 7,500. Meanwhile CARB decided to up the number of plug-in electric vehicles to 60,000.
Now, since GM and Chrysler have gone into bankruptcy and are expected to sell fewer cars in California they may be able to fly under the radar of this new rule. But, Toyota that sells twice the cars of any other automaker in the state will have the CARB target firmly planted upon them.
This means that in the years 2012 to 2014 Toyota will have to spend $1 billion to rollout 60,000 plug-ins, and 7,500 hydrogen and electric vehicles. According to automotive researcher Brett Smith, “If you’re only discussing the cost of batteries and other components, a $1 billion cost for Toyota may be a stretch. Add in all the things needed to support these vehicles – service, dealer training, marketing, warranties, new manufacturing equipment to get them into production, and that number sounds reasonable.”
Now, the solution may be for Toyota to renegotiate with CARB the number of plug-in hybrids needed in this timeframe. Or CARB may once again face the same dilemma that caused the crushing of the electric car a few years back. And, that is that automakers could rebel against this overly strict plan especially at a time when all carmakers are losing money.
Similar to last time, the automakers could start rolling out plug-in hybrid and all electric golf carts, small city cars and other small vehicles by the thousands in order to comply with the rules.
Another idea might be to up the production of hydrogen cars and let CARB and the state of California deal with the fact that there are not enough hydrogen fueling stations to support them. Should Toyota be penalized for the lack of hydrogen stations, a problem that is outside of their control?
Anyway, there will likely be another showdown between the big automakers and CARB and lets just wait and see this time who blinks first.