Zero-Emission Vehicle Incentive Program

The California Zero-Emission Vehicle Incentive Program (ZIP) provides grants of up to $9, 000 per vehicle toward the purchase or lease of new zero-emission vehicles (ZEVs). ZIP was originally funded at $18 million; an additional $20 million was provided in fiscal year 2001-2002 to expand the program and extend it into mid-2004. Eligible applicants include private and public consumers (including individuals), local governments, state agencies, non-profit organizations, private businesses, federal agencies, and fleets. Grants vary by vehicle model and are awarded on a first-come, first-served basis while funds are available. The California Air Resources Board certifies eligible cars and trucks. Each applicant must accept delivery of the vehicle prior to applying for the grant. ZEVs avoid tailpipe exhaust, evaporative emissions from fuel systems, and emissions from refining fuel and distributing it to service stations. They also avoid the need for emissions control systems. California has found that widespread use of ZEVs can reduce CO2 emissions, lower the risk of cancer from exposure to contaminants such as benzene, and diversify California's energy supply while reducing the state's dependence on imported oil.

Program Summary
Brief Description: 
The California Zero-Emission Vehicle Incentive Program provides grants of up to $9, 000 per vehicle toward the purchase or lease of new zero-emission vehicles.
During the program's first complete year, California placed 2, 500 ZEVs into service. These vehicles avoided approximately 3, 700 metric tons of CO<sub style="line-height:100%">2</sub> emissions and 5.6 metric tons of NOx emissions.ZIP has also spurred other technological advances. These include vastly improved alternative fueled vehicles, super-clean vehicles known as super ultra low emission vehicles, or SULEVs (generally fueled by gasoline or compressed natural gas), fuel-efficient hybrids powered by a combination of electric motors and internal combustion engines, and fuel cell vehicles that create their own electricity and can be powered by hydrogen.
Lessons Learned: 
California has faced four significant challenges while implementing the ZIP. The first is helping decision makers and the public understand the role of government incentives in promoting unfamiliar and higher cost technology. The second is helping auto manufacturers comply with mandated requirements. These challenges arise from California's belief that beyond legislating requirements, the state also has a critical role in the overall success of regulatory compliance. California has found that using incentives constructively is an important marketing tool, one that provides considerable early assistance to private-sector companies attempting to comply with regulatory requirements. Support from all interested and affected parties is necessary, both to create and to fund programs on this scale.A third challenge is providing consumers with accessible and current information on incentives (available from the ZIP as well as other local and federal programs). The ZIP currently relies on its Web site (<a href=""></a>) and one-on-one assistance via a toll-free number. In addition to state efforts, local air agencies and ZEV advocacy groups also have helped disseminate information about the program. The state acknowledges that more outreach with automotive dealers will be needed.A final challenge is streamlining the program's administration (to ensure timely disbursement of incentive funds) while retaining flexibility and options for program participation, often requiring a larger administrative overhead.California offers four recommendations, based on current program experience. First, if a program's funding mechanism is dependent on a timeline, states should consider including options for extending the program with any remaining funds. Second, provide program participants with flexibility and options when applying for and receiving incentive funds. Third, stakeholder involvement is essential for the implementation of a workable, successful program. And fourth, programs need to address issues of environmental justice. Public outreach efforts should include and facilitate involvement of communities disproportionately affected by poor air quality.
ZIP was developed to help meet California's regulatory requirement mandating the manufacture and marketing of zero-emission vehicles in California. The state's goal is to have a ten-percent ZEV saturation rate by the end of 2003.ZIP was originally authorized by state legislation that appropriated $18 million from the state's General Fund. ZEV advocates worked with legislators on the bill's language and program goals. Following the legislative mandate, a stakeholder working group was formed, comprising environmental advocates, auto manufacturers, industry associations, local air agencies, and state air and energy agencies. The group helped develop implementation guidelines, which were approved by the California Air Resources Board in December 2000. The working group meets quarterly and is revising the guidelines for an expanded program.Although ZIP has not benefited from any complementary state or federal incentive programs, California has utilized available local and federal ZEV incentives, which have helped further reduce vehicle costs for prospective consumers. Beginning in 2002, the Air Resources Board plans to partner with the South Coast Air Quality Management District, which will cover administrative costs.