Automakers Reveal Details of Consumer Test for Electric Vehicles.

Business Editors

WASHINGTON--(BUSINESS WIRE)--Jan. 16, 2001

In advance of a Jan. 25 hearing on the future of electric vehicles, the Alliance of Automobile Manufacturers today revealed details of its proposal for a "Fair Market Test" to determine whether a sustainable consumer market exists for battery-powered electric vehicles (EVs) at volumes required by the state's Zero Emission Vehicle (ZEV) mandate.

On Jan. 25, the California Air Resources Board (ARB) will hold a hearing on proposed changes to ZEV regulations. In December 2000, ARB staff proposed to "amend the rate and timing of ZEV and Partial ZEV introductions to better reflect the near-term realities of cost and availability." The ARB staff noted, "There is significant disagreement over the extent of market demand for electric vehicles....Staff views this as the most difficult area in which to develop reliable estimates."

"The Fair Market Test is a common-sense way of showing if there is consumer demand for EVs," said Josephine S. Cooper, president & chief executive officer, Alliance of Automobile Manufacturers. "Everyone, including regulators, agrees that California's ZEV mandate presents enormous challenges, and one of the most difficult is low customer demand for electric vehicles. The Fair Market Test would resolve the debate over consumer demand once and for all."

The Fair Market Test (FMT) outlined by the Alliance would be conducted through existing dealerships over a specified time period, such as three years, beginning in 2003. New details of the FMT follow:

-- The market test would be administered by a foundation composed of diverse
interests, including representatives of ARB, environmental groups, auto
manufacturers, dealers, battery suppliers, and the motoring public. The
foundation would involve an independent blue-ribbon panel of experts as needed
to assist with implementing the FMT.

-- Large automobile manufacturers would provide a mix of about 2,500 electric
vehicles for sale or lease in the Los Angeles area. This mix could include 500
full-function electric vehicles,   750 city electric vehicles, and 1,250
neighborhood electric vehicles. If market demand throughout California were to
reach    5,000 electric vehicles every year, the value of the FMT would reach
$1 billion.

-- The program includes $15 million per year of funds to be administered by the
foundation to cover administrative expenses, advertising, education programs
and infrastructure development.

Contributions would be welcome from ARB, other governmental units,

utilities, battery suppliers, environmentalists, and EV owners.

-- Automakers proposed either Los Angeles or Sacramento as the

consumer test market, though the foundation would ultimately

select the market.

-- Media review of the FMT would be encouraged through open

meetings of the foundation.

"The Fair Market Test is objective, and it accommodates the interests of ARB, manufacturers, and others," Cooper said. "By limiting the Fair Market Test to a specific geographic area and time, the program assures that the funds available to the foundation will be used in the most effective way.

"The liberal involvement of independent third-party experts assures that the program will be conducted objectively and fairly. And the inclusion of an objective standard to determine the success or failure of the Fair Market Test provides us all with needed certainty."

Under the Fair Market Test, the current ZEV regulation would be amended to defer its effective date while the test is conducted. As required by California law, the final decision regarding the Fair Market Test's success would be made by ARB. It is expected this decision would be based on criteria established by the foundation.

The Alliance of Automobile Manufacturers is a 13-member coalition of car and light truck manufacturers who employ more than 620,000 Americans at 250 facilities in 35 states. Alliance members represent more than 90 percent of U.S. vehicle sales. For more information, visit the Alliance at www.autoalliance.org.