The first 200,000 electric cars made by each automaker will be given a zero emissions rating under new U.S. fuel efficiency rules, after which the smokestack emissions of power plants will be included.
The Obama administration said the initial rating was an incentive to produce electric vehicles, but automakers like General Motors Co, Ford Motor Co, and Chrysler had pushed for an unlimited zero rating.
Right now, it's pretty clear that the credit is needed for these vehicles, said a senior government official talking on condition of anonymity about the new rules.
The zero emissions classification for electric vehicles would help automakers comply with a government efficiency requirement for each company's fleet to average 35 miles per gallon by 2016.
The standard is a 42 percent increase over today's efficiency requirements. The rules also seek to reduce carbon emissions by 30 percent.
Because the government is requiring a fleet average for each company, automakers can use a formula that leverages zero emission electric cars to offset less efficient models, like pickups and SUVS, and still meet the new mileage target.
Automakers say the trouble with the electric vehicle standard comes once the 200,000 vehicle threshold is reached and power-generation factors into the emissions calculation.
Our compliance will depend on what the utility is doing, said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, the trade group for most major U.S. and foreign car companies.
The government said it cannot predict the market for electric vehicles and has to account for the potential impact on power generation at some point.
Regulators consider the threshold of 200,000 vehicles per manufacturer a reasonable starting point, considering environmental activists wanted a tougher approach.
David Friedman of the Union of Concerned Scientists said his group is glad the government acknowledges there are emissions associated with electric vehicles and there are plans to focus on power generation later.
Their tailpipes may have zero emissions, but you have to get the electricity from somewhere so they are not truly zero-emissions, Friedman said.
Electric vehicles are now a product of niche manufacturers, but government tax credits, other incentives and consumer interest are boosting manufacturing plans. Several big manufacturers have plug-in electric cars in the pipeline or on the drawing board.
GM intends to roll out its Volt plug-in later this year. Nissan Motor Co Ltdis also producing a battery-powered car, the Leaf.
Currently, the market for gasoline-electric hybrid vehicles, the most efficient on the road, is about 2 percent of overall sales of about 10 million vehicles per year.
(Reporting by John Crawley, editing by Gerald E. McCormick and Tim Dobbyn)