US regulators could be more interested in fuel cell or diesel than plug in hybrid vehicles image

With U.S. sales of plug-in electric vehicles on pace to reach half of President Barack Obama’s goal, regulators are following customers and automakers to vehicles powered by other fuels, from hydrogen to diesel.

California, which leads 10 states that require automakers to sell zero-emission vehicles, may alter its system of tradable credits to stop favoring plug-ins over hydrogen-powered cars. That would hurt Tesla while helping others like Honda, for example.

Obama, who touted electric cars in his first State of the Union address and gave $5 billion in U.S. loans, grants and tax breaks to spur their development, hasn’t mentioned them in public since July. His administration halted loans for their development and reversed moves to de-emphasize fuel cells.

“I don’t think they should just pick technologies that they say or feel may be better,” Audi of America President Scott Keogh, who’s seeking more favorable regulatory treatment for clean diesel, said in an interview.

Automakers that sell vehicles in the U.S. must double their vehicles’ average fuel economy by 2025 under rules Obama adopted. The target is considered impossible to achieve just by improving the gasoline engine.

Obama in 2009 set a goal of having 1 million electric vehicles on U.S. roads by 2015. The Energy Department last made a loan for electric-vehicle development in 2011. While Tesla repaid its loan nine years early, an award to Fisker Automotive Inc. became a talking point for Republicans during the 2012 presidential campaign. The defaulted loan was put up for auction in October after Fisker stopped production and failed to find a buyer.

California’s proposed revisions would cut the Zero-Emission Vehicle, or ZEV, credits Tesla gets for its electric Model S sedan by as much as 40 percent from 2015. The state’s Air Resources Board on Oct. 24 deferred a decision on the matter until next year.

Changing the credit formula may help Honda’s hydrogen-powered FCX Clarity, of which only six have sold in the U.S. this year through Oct. 31, according to researcher Autodata Corp. The shift also favors GM, which hedged its bets by investing in hydrogen technology while producing this year’s best-selling plug-in car in the U.S., the Chevrolet Volt.

Honda and GM, the top-ranking holders of fuel-cell patents filed between 2002 and 2012 according to the Clean Energy Patent Growth Index, in July announced a partnership to develop a fuel-cell and hydrogen-storage system. Toyota and Hyundai are also both planning separate new fuel-cell offerings by 2015.

Via Bloomberg