National, state, and local governments in leading EV markets around the world are using various types of mandates, as centerpieces of their strategies, for stimulating both the supply of and the demand for zero-emission vehicles (ZEVs). It’s also clear that the cities and states emerging as “EV capitals of the world” are taking a holistic approach and achieving success through bold measures including mandates for EV procurement in public fleets, registration and licensing incentives, planned low-emission zones, and more.

Broadly speaking, the regulatory pathways for ZEV mandates are employed to (1) reduce air pollution and (2) reduce greenhouse gas (GHG) emissions.

The pathways that focus on air quality can be further sub-categorised by the way they are structured. The following examples of these in successful cities illustrate their form and impacts:

• ZEV incentives as part of exhaust emission standards: In 1990, California was the first U.S. state to implement a ZEV mandate programme under the state’s exhaust emission standards for light-duty vehicles. It requires that a certain percentage of auto manufacturers’ overall fleet sales be ZEV vehicles.
• Transit and public sector fleet ZEV procurement rules: Since 2014, the State Council of China has provided guidance that at least 30% of new procurement should be zero emission for all categories of vehicles in public service in ZEV promoting cities.
• ZEV mandate in ride-hailing and commercial permit rules: In late 2018, the New York City Council effectively capped the number of vehicles available in app-based ride-hailing fleets, when it stopped issuing new for-hire vehicle licenses. Battery EVs were excluded from this cap.
• ZEV preference in ICE-restricted registration rules: 8 major cities in China – including Beijing, Shanghai, Shenzhen, and Guangzhou – limit the sale of conventional vehicles through registration restrictions. Such mechanisms typically set a quota for the maximum number of vehicle registrations allowed in a year, granted either through monthly/bimonthly lotteries or expensive auction mechanisms. ZEVs, on the other hand, are either exempt from such restrictions altogether, or treated preferentially.
• ZEV promotion in air pollution control areas: In more than 200 cities all over Europe, preferential access is granted to approved vehicles in low-emission zones, which prohibit or levy heavy fines on polluting vehicles.

ZEV mandates linked to fuel consumption/GHGs are primarily directed at vehicle manufacturers. Examples of successful regulatory pathways include:

• ZEV mandate as standalone fuel consumption reduction pathway: The Canadian province of Quebec has a credit-based mandate program that requires passenger car manufacturers to put more ZEVs on the market. In May 2019, the Canadian province of British Columbia legislated the world’s first 100% ZEV mandate for passenger vehicles. The Zero-Emission Vehicles Act of 2019 enacted 10%, 30%, and 100% ZEV sales targets by 2025, 2030, and 2040, respectively.
• ZEV mandate as part of fuel consumption standards: The European Commission specified voluntary ZEV targets of 15% market share by 2025, and 35% by 2030, as a compliance flexibility mechanism in post-2021 corporate average CO2 standards for passenger vehicles. Manufacturers who over-comply with targets are eligible to receive a corresponding relaxation in their corporate average CO2 compliance values and receive an incentive to beat their ZEV targets by as much as 5%.

ZEV mandate programmes are flourishing. Several governments have already legislated or regulated a 100% transition to ZEVs for specific market segments within the next two decades. Leading policies targeting the purchase of fleets operating largely in urban areas – taxis, ride-hailing vehicles, transit buses, and urban delivery vehicles – are requiring full electrification of new vehicles within the next decade. Policies affecting the production and sale of an entire category of vehicles (e.g., all light-duty vehicles) are phasing in full electrification over a longer time period. These often offer flexible compliance pathways for smaller fleets and low-volume manufacturers while setting faster timelines for public procurement. Additionally, explicit targets are being complemented by other policies that impose restrictions and fees on conventional vehicles and offer exemptions for ZEVs. In India, there are already several ZEV incentive policies in place. Perhaps there’s a need, then, to focus less on exactly when 100% electrification will be achieved and more on identifying attainable interim electrification targets and enabling regulatory pathways. Such a focus is also essential to ensure the money being spent on short-term incentives leads to scale in the market.