Why California Pushes Hydrogen Compliance Cars Over Electric Ones

We're starting to hear a lot about hydrogen fuel-cell vehicles from Hyundai, Toyota, and Honda--and we're going to hear a great deal more about them in the years to come.

The first 2015 Hyundai Tucson Fuel Cell was leased last month, and Toyota will bring its own hydrogen-powered vehicle into selected California dealerships starting sometime next year.

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Honda is expected to follow with a production version of the FCEV Concept it showed at the 2013 Los Angeles Auto Show, most likely launching sometime in 2016.

Golden State only

Offered only in California, these fuel-cell cars will not make money for the automakers, at least initially--just as hybrids and electric cars didn't when each new technology was first introduced.

But there's a strong incentive for automakers to offer hydrogen vehicles.

Hint: It's not consumer demand. At least, not yet.

Instead, California policy gives preferential treatment to hydrogen fuel-cell vehicles in meeting the state's mandate for sales of zero-emission vehicles.

Hydrogen over battery electric

Under a complex set of rules specifying how much credit automakers receive for each emission-free car they put on the road, hydrogen-powered vehicles earn more points for range and speed of refueling than do battery-electric cars.

And it's important for consumers to understand why these cars exist, and why makers will be aggressively marketing them to a small number of qualifying Californians.

That knowledge will let buyers better assess how serious automakers are about a technology--and whether it makes sense to put down tens of thousands of dollars to buy or lease a specific zero-emission vehicle.

Electric cars: unsuitable for most buyers

Honda, Hyundai, and Toyota are all staunch public advocates of hydrogen fuel cells as the preferred technology for providing zero-emission vehicles.

With varying degrees of vehemence, they dismiss battery-electric cars as not yet ready for primetime, unlikely to reach a mass market, and incapable of meeting the varied needs and uses of North American drivers.

And the state of California's policies largely seem to accept that view (despite the recent popularity of the Tesla Model S electric car among executives in the state's entrepreneurial, technology, and entertainment industries).

DON'T MISS: Hyundai On Hydrogen Fuel-Cell Vehicles: Critiquing Its Claims

But hydrogen fuel cells have been in development at many large automakers for as along as two decades, so why are we seeing them come to market now?

The answer can be found in Sacramento, the capital of California--the state whose chronic Los Angeles Basin smog led it to regulate auto emissions long before the national Environmental Protection Agency even existed.

The California Air Resources Board (CARB) is the arcane but powerful agency that sets emission standards for vehicles sold in the state.

Compliance cars emerge

Its zero-emission vehicle (ZEV) mandate requires the six best-selling auto companies in the state to sell certain numbers of vehicles with no tailpipe emissions at all.

The volume of ZEVs required were small when the rules went into effect in 2012, producing a spate of so-called "compliance cars": battery-electric vehicles sold only in California, and only in numbers sufficient to meet the mandate.

Those cars include the Chevrolet Spark EV, the Fiat 500e, the Honda Fit EV, the Toyota RAV4 EV--and, arguably, the Ford Focus Electric as well, though it's sold in many other regions as well.

None of those cars has exceeded sales of 1,800 a year thus far, and most U.S. buyers don't know they exist.

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The required volumes of emission-free vehicles increases slowly through 2018. Then, after a review of the program and its effects, the numbers will rise more quickly and apply to a larger number of automakers.