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Report: Toyota needs to spend $1 billion to comply with new Californian regulations

 
3 944 views Jun 5, 2009

California has established a new law requiring 3% of vehicle sales by 2012 to be zero-emissions models

California has established a new law requiring 3% of vehicle sales by 2012 to be zero-emissions models

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With new fuel and emissions regulations coming into place across the nation, as well as more stringent requirements in California springing up, automakers will be scrambling to follow the new laws that have been set out. Even Toyota, one of the most fuel-efficient manufacturers in the industry, will be struggling to meet California's new requirements for 3% of sales in 2012 to be zero-emission vehicles, and early estimates are predicting that Toyota will have to spend up to $1 billion to meet the goal.

Currently, California's requirement to sell 3% of vehicles as zero-emissions only applies to manufacturers that sell over 60,000 units a year, placing manufacturers such as Toyota, Honda and Ford directly in the firing line of the legislation. Other manufacturers such as GM and Chrysler will also have to comply with the rules, but the costs for doing so will be significantly less for them than the costs for Toyota and Honda, considering that together the two Japanese companies hold a large percentage of the auto market and thus must spend more money to get more vehicles compliant.

The estimated $1 billion figure required for Toyota to comply with the new regulations does not just take into account the cost of components needed for building battery-powered vehicles, but also peripheral requirements such as service centers, training for engineers and dealers, marketing, guarantees and warranties, and even new manufacturing equipment.

With Toyota's current sales figures, 3% of its vehicles sold would constitute around 15,000 zero-emissions vehicles, and should it fail to completely ignore the rule then California can ban the company from selling cars there, although it is unlikely to get to this stage, Bloomberg reports.

Toyota, and all the major automakers, will have to begin examining how to bring all-electric vehicles to market in time for the regulations, and with work already underway on some form of electric propulsion at most firms, the most difficult aspect will likely be convincing the public to buy the cars, which can often be dearer than comparable conventional models.



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Comments (3)

  1. ma_NoNameDenton avatar NoNameDenton Posted: 6/5/2009 7:09pm PDT

    Boycott Cali
     
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    Bad stuff?

  2. ma_Vinzer avatar Vinzer Posted: 6/6/2009 7:17pm PDT

    Protectionism in disguise, anyone?
     
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  3. By  maus Posted: 1/6/2010 10:53pm PST

    Wow, I'll take that crystal ball you're using. What part of California do you live in? I'll take your $2.5 gallon any day. Prices here range from $3.1-3.3.
     
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