Going Electric In California Could Cost Toyota $1 Billion

prius plug in

It will cost Toyota $1 billion to comply with California’s zero emission vehicle legislation according to a source who spoke with Bloomberg.

Starting in 2012, 3% of sales over a three year period must be zero emission vehicles for automakers that sell more than 60,000 new cars annually in California. Initially the law was targeted at GM, since they produce the least efficient cars. Their sales have staggered, while sales for Toyota, a relatively clean company, grew.

Bloomberg estimates Toyota will have to sell 16,000 electric cars to comply with the law. Toyota presently has no cars available for the masses that would meet the required zero emissions standard. However, they’re testing plug-in hybrids and electric cars. By 2012, they should have at least one model available.

The law allows Toyota to count sales in other states like New York and Massachusetts, who similarly stringent laws about pollution. Selling 16,000 electric cars in three states over a three year period shouldn’t be to difficult.

As for the billion dollar cost added, it’s not a guarantee. Here’s one analyst’s take:

“If you’re only discussing the cost of batteries and other components, a $1 billion cost for Toyota may be a stretch,” said Brett Smith, an advanced-vehicle analyst at the centre for Automotive Research in Ann Arbor, Michigan.

“Add in all the things needed to support these vehicles — service, dealer training, marketing, warranties, new manufacturing equipment to get them into production, and that number sounds reasonable,” Smith said.

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