The automakers may make less profit with a 100% ZEV sales quota than they would with no sales quotas, but they will still make profits. Jonn Axsen and Chandan Bhardwaj, two professors from the School of Resource and Environmental Management, Simon Fraser University, Burnaby, British Columbia, used the AUtomaker-consumer Model (AUM) to compare policy impacts on ZEV sales, GHG mitigation, vehicle markups and prices, and automaker profits from 2023 to 2035. They determined:
The ZEV standard scenario has the… effect [of] decreasing 2023−2035 cumulative profits by 7.5% relative to the baseline. These profit reductions are due to changes in automaker practices relative to the baseline. These include added R&D investment costs, fewer new vehicle sales (due to own-price elasticity), and lower profit margins for ZEVs (in initial years). Interestingly, automaker profits per year still increase by 15% from 2023 to 2035, mainly driven by our assumptions of increasing population that lead to an overall increase in new vehicle sales (even with own-price elasticities).1
The government must not permit the automakers to make the maximum profits that they can when they are doing so at the expense of the climate.
1 Axsen, John and Chandan Bhardwaj, “Subsidies, Standards, or Both? Trade-Offs among Policies for 100% Zero-Emissions Vehicle Sales”, Environmental Science & Technology 2025 59 (4), 1932-1941, p. 1938. DOI: 10.1021/acs.est.4c11772. Retrieved on 20 September 2025 from: https://pubs.acs.org/doi/pdf/10.1021/acs.est.4c11772?ref=article_openPDF&trk=public_post_comment-text