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Will V3 Superchargers Provide More ZEV Credits and Revenue?

Discussion in 'TSLA Investor Discussions' started by GSP, Dec 26, 2016.

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  1. GSP

    GSP Member

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    Fred Lambert wrote an article suggesting that Tesla will get ZEV credits for Type V ZEVs: 9 credits per car. This is the highest available from CARB. I believe that Tesla is currently getting credit for Type III ZEVs: 4 credits per car with > 200 mi UDDS range.

    Tesla’s upcoming ‘Supercharger V3’ is the last piece of the EV adoption puzzle – and means more ZEV credits

    I was curious what the exact requirement was for Fast Refulling rating in the CA ZEV regulations. I think this is the appropriate section:

    View Document - California Code of Regulations

    The requirement is:

    Type III: > 200 miles UDDS range

    Type IV: > 200 miles UDDS range; Must be capable of replacing 190 (UDDS ZEV range) in < 15
    minutes per section 1962.1(d)(5)(B)

    Type V: > 300 miles UDDS range; Must be capable of replacing 285 miles (UDDS ZEV range) in < 15 minutes per section 1962.1(d)(5)(B)

    UDDS miles are about the same as NEDC miles, so expect EPA range on the window sticker to be about 75-80% of UDDS.

    I would guess it is most likely that V3 superchargers and next gen Tesla batteries (M3 and maybe P100D) will only get to Type IV charging speeds. Tesla may get to Type V speeds in the generation after that.

    Also, ARB has proposed changing to only 3 credits per car for all of these ZEV types (III, IV, and V) in 2018. If so, the whole subject may be moot.

    GSP
     
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  2. GSP

    GSP Member

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  3. Waiting4M3

    Waiting4M3 Active Member

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    It would still help if Tesla can crank out a bunch of higher range M3 in 2017 to take advantage of this to provide more funding for M3 production ramp. Hopefully in 2018 production will be in full tilt, and economy of scale kicks in, we will finally have an EV that is cost/performance/charging-time competitive with ICE even without incentives. To borrow an ICE terminology, "Open 'er up, Elon!"
     
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  4. TonyWilliams

    TonyWilliams Active Member

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    #4 TonyWilliams, Dec 29, 2016
    Last edited: Dec 29, 2016
    The linked article is wrong with its statement that Tesla could ever qualify for nine credits per vehicle with a battery electric car.

    CARB-ZEV credits per vehicle - Model Years 2012 - 2017:

    Type V - 300+ miles range "hydrogen" ---- Credit per vehicle: 9**

    Type V - 300+ miles range "fast refueling" - Credit per vehicle: 7 (this is what Tesla earned 2012-2014 with 85kWh car and demonstrated battery swapping)

    Type IV - 200+ miles range "fast refueling" - Credit per vehicle: 5 (the is what Tesla earned 2012-2014 with 60kWh car and demonstrated battery swapping)

    Type III - 100+ miles range "fast refueling" - Credit per vehicle: 4

    Type III - 200+ miles range -------------- Credit per vehicle: 4 (this is what Tesla earns today, mid 2014 to through 2017, after "fast refueling" rule change)

    Type II - 100+ miles range --------------- Credit per vehicle: 3

    Type I.5 - 75-100 miles range ----------- Credit per vehicle: 2.5

    Type I - 50-75 miles range --------------- Credit per vehicle: 2

    ** hydrogen "super credit" at 9 per vehicle for model years 2015-2017 only

    NOTE: The "fast refueling" credit has been revised (2014) to a minimum of 4% of the fleet to demonstrate a maximum 25 battery swaps. Hydrogen is exempt to continue receiving the credit.

    *************

    CARB-ZEV credits per vehicle - Model Years 2018-2025:

    Starting Model Year 2018 (enacted 2016):

    Range per Zero Emission Vehicle (ZEV) per UDDS test protocol:

    Actual credit value is 1% of UDDS range plus 1/2 credit
    Example - 249 miles UDDS * 1% = 2.49 + 0.5 = 2.99
    This vehicle earns 2 cretis
    No fast fueling credit

    350 miles range ---- Credit per vehicle: 4 (presumably, a 100kWh car would easily meet this threshold)
    250 miles range ---- Credit per vehicle: 3
    150 miles range ---- Credit per vehicle: 2
    50 miles range ----- Credit per vehicle: 1

    *************

    Model Year - ZEV Credit Percent Requirement
    2012 ------------ 0.79%
    2018 ------------ 2.00%
    2019 ------------ 4.00%
    2020 ------------ 6.00%
    2021 ------------ 8.00%
    2022 ----------- 10.00%
    2023 ----------- 12.00%
    2024 ----------- 14.00%
    2025 ----------- 16.00%

    The 0.79% ZEV credit rule (model years 2012-2017) for Zero Emission Vehicle (ZEV) sales means that a qualifying auto manufacturer must earn 0.79% ZEV credit for the whole fleet sold in California each year. A typical EV sold in California might earn 3 of the ZEV credits each, therefore 0.79% divided by 3 = 0.26% of the fleet must be a qualifying ZEV in that example.

    For model years 2015-2017, a hydrogen car earns 9 credits per car, therefore A qualifying car company need only build 0.08% of the fleet as a qualifying hydrogen ZEV.

    For model year 2025, a qualifying vehicle earning 4 ZEV credits each will need to be 16% / 4 = 4% of the fleet.

    ***********

    CARB states - Arizona, California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, District of Columbia.

    CARB-Zero Emission Vehicle states - California’s ZEV program has now been adopted by the states of Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, Vermont and Maine. These states, known as the “Section 177 states,” have chosen to adopt California's air quality standards in lieu of federal requirements as authorized under Section 177 of the federal Clean Air Act (42 U.S.C. sec. 7507).

    Additionally, California’s GHG standards are now spelled out federal law. Washington DC and New Jersey are participating with ZEV initiatives, but are not signatory CARB-ZEV states.

    ***********

    Auto manufacturers required to comply with CARB-ZEV:

    Starting in 2012, the six "Large Vehicle Manufacturers" (LVM) were required to sell a minimum number of California Air Resources Board - Zero Emission Vehicle (CARB-ZEV) qualifying vehicles for compliance in California:

    Manufacturer - ZEV used for CARB compliance, model years 2012-2014:

    Ford - Focus EV
    Honda - Fit EV (discontinued)
    Chrysler/Fiat - 500e
    Toyota - Rav4 EV, iQ EV (both discontinued)
    GM Chevrolet - Spark EV (discontinued)
    Nissan - LEAF


    For model years 2015 and beyond, both LVM and Intermediate Vehicle Manufacturers (IVM) must comply with CARB-ZEV:


    BMW - i3, including gasoline hybrid version dubbed "REx" under special "BEVx" rules
    Fiat/Chrysler - 500e (CEO of Fiat famously said, "Don't buy my car")
    Ford - Focus EV
    General Motors - Spark EV, Bolt EV
    Honda - absolutley hydrogen, plus a new EV
    Hyundai - absolutley hydrogen, plus new EV
    Kia - Soul EV, other EVs in the future, maybe hydrogen
    Daimler/Mercedes - B-Class ED, Smart ED
    Nissan - LEAF
    Toyota - absolutely hydrogen only in USA / Europe / Japan, maybe EV by 2020
    Volkswagen - eGolf, 310 mile Audi Q6 e-tron SUV, and 265 mile Porsche sedan for 2018 "Tesla Model S competitor"


    Auto manufacturers that are NOT subject to CARB-ZEV due to their small sales in California. These additional manufacturers are required to comply with the ZEV requirements, but would be allowed to meet their obligation with Plug-In Hybrids (PHEV):

    Mazda - possible EV, possible hydrogen car with Toyota technology
    Tesla - Model S, Model X, Model 3 (all EV)
    Mitsubishi - iMiev (EV) and Outlander Plug-in hybrid
    Fuji Heavy Industry (Subaru) - ?
    Jaguar Land Rover - future EV
    Volvo - plug-in hybrid CUV
    Aston Martin Lagonda - DBX EV
     
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  5. neroden

    neroden Happy Model S Owner

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    These ZEV requirements are so weak. I can see why Musk rubbished them. There even seems to be a rule giving extra credits for "overproduction" of ZEVs in previous years, but it's calculated so it only applies to manufacturers who make gas cars.

    There are about 2.05 million new cars sold per year in California. Multiply by 2.35 to estimate the total ZEV state new car sales (this is the proportion of California's population to their total population) Looking at the 2018 requirements, a requirement of 2% is only 96350 ZEV credits for the whole fleet. If GM sells all its Bolts in California, it's pretty much set and can sell credits to other manufacturers. Looking at the 2025 requirements, 770,800 would be required. And there are loopholes so these numbers be lower.

    Tesla's going to be generating over 1 million ZEV credits in 2018.

    ZEV credits are essentially worthless at that point unless the rules are strengthened. I can see why Musk says forget about them.
     
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  6. TonyWilliams

    TonyWilliams Active Member

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    #6 TonyWilliams, Jan 5, 2017
    Last edited: Jan 6, 2017
    I'm not sure that I follow your "2.35" number, but yes, there are loopholes, and hydrogen wins at that game. Toyota will sell about 900,000 cars in California for 2015-2017 model years.

    At 9 credits per hydrogen car, the actual number of hydrogen cars required for ALL THREE YEARS is just 790 cars.

    900,000 * 0.79% = 7110 credits / 9 = 790 cars, or just 264 cars per year.

    Hydrogen benefits:

    1) ZEV credits - 9 for hydrogen -vs- 3 or 4 for EVs

    2) $5000 state rebate for each hydrogen car sold -vs- $1500 or $2500 for hybrids and EVs

    3) Exemption from "traveling provision" for hydrogen -vs- EVs that must be sold in all 9 ZEV states starting MY2018

    4) $20 million in state money spent per year, every year, for hydrogen infrastructure -vs- no guaranteed funding for EV infrastructure. $200 million over 10 years.

    5) $8000 federal tax credit

    In 2018, things even up when both a Tesla 100kWh car as well as a hydrogen car will both earn 4 credits. That means in 2025, assuming Toyota only makes hydrogen ZEV cars and their sales remain at 300,000 per year in California, then the total hydrogen sales will be 16% / 4 = 4% * 300,000 = 12,000 cars, or about 1000 per month.

    Or they could just buy the credits from Tesla and build none.

    GM has 10% of the California market of 2 million cars per year, so they need to sell:

    2017 - 200,000 * (0.79% / 4 credits per Bolt EV) = 395 cars, California only

    2018 - 200,000 * (2% / 4 credits per Bolt EV) = 1000 cars in all 9 CARB-ZEV states

    2025 - 200,000 * (16% / 4 credits per Bolt EV) = 8000 cars in all 9 CARB-ZEV states
     
  7. neroden

    neroden Happy Model S Owner

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    I was assuming that the ZEV requirements were a proportion of the number of cars sold in the total of *all* the ZEV states. I couldn't find that number. So I guessed that the number of cars sold per resident was probably about the same for each state and extrapolated from the California numbers. Likely an overestimate since I think Californians buy more cars than New Yorkers.

    Anyway, even using these very high estimates for requirements, it's just such a miniscule number of cars required -- it's so little that they could *all* buy *all* of their credits from Tesla and Tesla would still have hundreds of thousands of ZEV credits left over.

    They probably will make their own cars instead of buying the credits from Tesla because they don't want to help Tesla, but at this point Tesla has very little to lose financially speaking by selling ZEV credits for pennies on the dollar. They're essentially worthless. If the other companies really don't want to make electric cars, they don't have to.
     
  8. RobStark

    RobStark Active Member

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    If ZEV credits are close to worthless then the most environmentally friendly thing for Tesla to do is burn the credits and force other manufactures to make ZEVs.
     
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  9. ggr

    ggr Roadster R80 537, SigS P85 29

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    That's a really interesting thought. What if, towards the end of 2017, Tesla suddenly stops selling ZEV credits to companies like Honda and FCA? Oh, and there's a neat new mid-size car entering the market at the same time...
     
  10. neroden

    neroden Happy Model S Owner

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    Yes. I did think about that. They might just do it.
     

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