![\"Peter](\"https:\/\/www.gannett-cdn.com\/presto\/2019\/08\/30\/PDTN\/5b3ee73e-b49d-4bf7-9057-a10a608b6a06-cal_subaru_tenn.jpg?width=540&height=&fit=bounds&auto=webp\")
<\/p>\n<\/div>Peter Tenn is Subaru planning manager for its Legacy sedan and best-selling Outback SUV models. He says California attempts to mandate battery power are a tough sell to green Subaru customers, given the cost and limited range of EVs.\u00a0(Photo: Henry Payne, The Detroit News)<\/span><\/p>\n But with California and 13\u00a0other states mandating that about 8% of each automaker’s sales be battery-powered, zero-emission vehicles by 2025 \u2014 within the product cycle of Subaru\u2019s current lineup \u2014 the maker of affordable, all-wheel-drive vehicles is caught in a vise.<\/p>\n Like other carmakers from Fiat Chrysler Automobiles to Mazda Corp., it will have to make cars that customers don\u2019t want \u2014 or buy carbon credits for up to $8,000\u00a0for every EV they don\u2019t sell to meet their quota.<\/p>\n The primary seller of credits has been California automaker Tesla Inc. Because it\u00a0only produces electric cars, Tesla has amassed a vault of credits. In 2018, Tesla made $103 million on credits sold to other manufacturers.<\/p>\n By 2035, the California Air Resources Board\u00a0regulatory body has indicated it wants 100% of vehicle sales to produce no emissions. CARB determines\u00a0the state’s emissions goals.<\/p>\n The disconnect between what customers want and what the government demands \u2014\u00a0echoed by even stricter mandates from\u00a0Europe and\u00a0China \u2014\u00a0has some analysts wondering how it will all shake out.<\/p>\n \u201cIt\u2019s insanity to invest in auto companies under these conditions,\u201d said Anton Wahlman, an investor and Seeking Alpha auto analyst. \u201cGovernments are ensuring that these companies will make limited profits. California is practicing socialism by mandate and telling private companies what they have to sell.\u201d<\/p>\n The mandates are particularly burdensome for smaller auto companies, such as Subaru Corp. and Mazda that don\u2019t have the vast research and development resources of a Toyota Motor Corp. or Volkswagen AG. And they don’t have profitable\u00a0pickup lines like Ford Motor Co.\u00a0and General Motors Co.\u00a0to subsidize unprofitable electric vehicles.<\/p>\n \u201cWe have limited manufacturing facilities, limited engineers that can work on multiple programs,\u201d Subaru\u2019s Tenn said. \u201cWe\u2019re trying to launch everyday cars. It\u2019s tough to take those people off and put them on EV programs if we want to give our customers the kind of vehicles they expect from us.\u201d<\/p>\n Fiat Chrysler has seen little demand for EVs such as the tiny Fiat 500e that former CEO Sergio Marchionne famously pooh-poohed as a California-compliance vehicle. So it has thus far paid millions\u00a0in credits to Tesla in order to keep selling vehicles in\u00a0California. Through 2023, Fiat Chrysler has committed to paying nearly $2 billion in emissions credits to operate in U.S. and European markets. It also has pledged more battery-powered vehicles.<\/p>\n California has long had an exemption from the federal government to set its own emissions rules, an authority now being challenged by the Trump administration, which is attempting to relax gas-mileage rules. Four large automakers \u2014 Ford, Volkswagen, Honda Motor Co. and\u00a0Mercedes-Benz \u2014\u00a0have defied the White House’s efforts by coming out in support of California\u2019s more stringent rules.<\/p>\n All four of those carmakers have made substantial investments in electrification.<\/p>\n Ford, for example, is\u00a0making a\u00a0big bet\u00a0on a yet-to-be-seen Mustang-inspired EV,\u00a0while VW is rebranding itself an electric automaker after the\u00a0Dieselgate scandal.<\/p>\n When Colorado adopted California\u2019s EV mandates this year, auto dealers pushed back.<\/p>\n