1. ZEV Credit Tracking Workshop Krista Eley April 9, 2002

2. Introduction Welcome Purpose of Workshop

3. Overview Background on ZEV Regulation Reporting - Process Issues Reporting - Technical Issues Next steps

4. Background on ZEV Regulation Biennial Review at September 2000 Board meeting January 2001 Board Hearing 15 day changes Current status

5. September 2000 Board Meeting Reaffirmed commitment to the ZEV requirements Asked staff to address challenges –Near-term vehicle availability –Market stability –Public education –Cost

6. December 2000 Staff Proposal Reduce number of ZEVs needed Allow further reduction if manufacturers backfill with advanced technology vehicles Reduce number of PZEVs needed in early years Gradually increase ZEV requirement Base ZEV requirement on prior sales

7. January 2001 Board Hearing Adopt most staff recommendations Increase number of vehicles required in 2007 and beyond –Include LDT2 vehicles in base –Additional changes to get to 2X staff proposal –Equalize long-term BEV and fuel cell totals Treat grid connect HEVs as AT PZEVs Further reward “transportation systems”

8. Additional 15 Day Changes Advanced componentry scoring Cap on future use of NEV credits Treatment of “specialty” vehicles Option to use current year sales to determine ZEV obligation

9. Current Status Final package to be sent to Office of Administrative Law (OAL) OAL has 30 day review period When approved, provisions will be retroactive to 2001 model year

10. Reporting Process Credit Bank Frequency Delivered for sale Placed in service Transferring credits Miscellaneous issues

11. Credit Bank Developing database system to track ZEV credits and determine compliance with the ZEV Regulation Required credits, credits, and debits Credit statement Scoping phase of development

12. Bank of ZEV Executive Order letter Credit Statement Production Placement ATPZEV PZEV Warranty Demonstration Transportation Systems FFEVs NEVs Credit Trades Credit Obligation

13. Frequency Reporting Current production reporting required –Quarterly - 45 days after quarter –Annually - March 1 after year Proposal to do the same Transition period –Beginning this CY report quarters together depending on when Regulation receives final approval

14. Credit Statements Transition period Quarterly and annual Viewing access Confidentiality

15. Overview of Credits Received ZEVs receive delivered for sale and placed in service credit –Receive base credit of 1 and remaining credits when placed in service AT PZEVs and PZEVs receive delivered for sale credits Credits can be transferred

16. Delivered for Sale Credits “Produced and delivered for sale in California” In California and ready for consumer purchase Report to ARB Confirmation of credits subject to verification ARB may perform informal audits

17. Placed in Service Credits Sold or leased to an end-user and not to a dealer or other distribution chain entity and Individually registered for on-road use by the California Department of Motor Vehicles Vehicles sold to another state shortly after registering in CA do not qualify for credits

18. Placed in Service continued Report to ARB ARB verifies registration with DMV for each vehicle Propose the latest a model year can be placed in service – six months after the end of model year (June 30) Confirmation of credits subject to verification ARB may perform informal audits

19. Transferring Credits Credits earned delivered for sale and/or placed in service Commodity on the market - contract between seller and buyer Propose both seller and buyer report to ARB each time transferred Double counting – Propose first to report receives credit Confirmation of credits subject to verification

20. Manufacturers Excess and Deficit Credits Multiplied by Non-Methane Organic Gases (NMOG) fleet average requirement for model year Expressed in grams/mile NMOG Credit Effect - Inflation and Deflation of number vehicles needed

21. Example of Excess and Deficit Credits 50 credits, assume 10 credits/vehicle MY 2002 are = 5 vehicles MY 2005 are = 6.9 vehicles (50)(.068 NMOG 2002 )/(.049 NMOG 2005) = 69

22. Miscellaneous Issues Corrections to Data Other

23. Technical Issues Collecting credit data Data for Credit Bank Data for Certification application

24. Collecting Credit Data Develop Manufacturers Advisory Circular (MAC) –Specify electronic format and data fields –Data for Credit Bank Certification application –Baseline credit # for each Executive Order –Data that contribute to baseline credit

25. Data fields and Definitions

26. Other Technical Issues

27. Open Discussion

28. Next Steps Assess and incorporate stakeholder ideas into reporting process Develop draft MAC Revise Certification application Continue development of Credit Bank Release final MAC after Regulation final