California has a plan to end the auto industry as we know it

Sergio Marchionne had a funny thing to say about the $32,500 battery-powered Fiat 500e that his company markets in California as "eco-chic." "I hope you don't buy it," he told his audience at a think tank in Washington in May 2014. He said he loses $14,000 on every 500e he sells and only produces the cars because state rules require it. Marchionne, who took over the bailed-out Chrysler in 2009 to form Fiat Chrysler Automobiles, warned that if all he could sell were electric vehicles, he would be right back looking for another government rescue.

So who's forcing Marchionne and all the other major automakers to sell mostly money-losing electric vehicles? More than any other person, it's Mary Nichols. She's run the California Air Resources Board since 2007, championing the state's zero-emission-vehicle quotas and backing President Barack Obama's national mandate to double average fuel economy to 55 miles per gallon by 2025. She was chairman of the state air regulator once before, a generation ago, and cleaning up the famously smoggy Los Angeles skies is just one accomplishment in a four-decade career.

Nichols really does intend to force automakers to eventually sell nothing but electrics. In an interview in June at her agency's heavy-duty-truck laboratory in downtown Los Angeles, it becomes clear that Nichols, at age 70, is pushing regulations today that could by midcentury all but banish the internal combustion engine from California's famous highways. "If we're going to get our transportation system off petroleum," she says, "we've got to get people used to a zero-emissions world, not just a little-bit-better version of the world they have now."

In that speech in Washington, Marchionne was talking up the little-bit-better option. He touted the improved efficiency to be wrung from traditional engines and gasoline-electric hybrids. But Nichols isn't scared of auto executives and has never accepted their vision of what's possible.

Even if most people outside California have never heard of Mary Nichols, she's the world's most influential automotive regulator, says Levi Tillemann, author of The Great Race, a book on the future of automobile technology.

Nichols, who drives a tiny electric Honda Fit, acts as if she's an unstoppable force. California's goals for the adoption of electric vehicle technology are the most stringent in the nation, but Nichols thinks they need to be even tougher. Regulations on the books in California, set in 2012, require that 2.7 percent of new cars sold in the state this year be, in the regulatory jargon, ZEVs. These are defined as battery-only or fuel-cell cars, and plug-in hybrids. The quota rises every year starting in 2018 and reaches 22 percent in 2025. Nichols wants 100 percent of the new vehicles sold to be zero- or almost-zero-emissions by 2030, in part through greater use of low-carbon fuels that she's also promoting.

The 2030 target is what's needed to meet Governor Jerry Brown's goal, set in an executive order, of an 80 percent reduction in greenhouse gas emissions by the middle of the century, Nichols says. The conventional internal combustion engine needs to be off the road by 2050 and, since cars last many years, on its way out of new-car showrooms around 2030.

Brown, 77, has had Nichols at his side as a clean-air regulator through both his governorships-his first two terms from 1975 to 1983 and his remarkable, ongoing second act. He made her a member of the Air Resources Board in 1975 and named her its chairman in 1979. By the time he returned to the capitol three decades later, Nichols had regained the chairman's job, having been tapped by Arnold Schwarzenegger. "She's smart. She's honest," Brown says. "There's no daylight between what I think and what Mary thinks on climate change."

Both Brown and Nichols emphasise that California must inspire and support action in other states and countries if there's any chance to slow or stop climate change.

Next year, Nichols will be a key player, along with Obama administration officials, in a review and update that will set the course for the national mileage standards and her own ZEV quotas. "This review will shape the next 20 years of transportation technology worldwide," says Diarmuid O'Connell, vice-president of business development at Tesla Motors. Elon Musk's company, devoted exclusively to electric cars, is an exception among automakers in pushing Nichols to move more aggressively.

California has a leadership position not just because of its size and fabled car culture but because its voters actually want the government to address global warming, says Brown, a Democrat. Nichols says she's motivated in part by the fear that her three grandchildren, when they're middle-aged, could be living in a state that's hotter and drier, with eroded beaches and less varied wildlife. But California emits only 2 percent of global green­house gases, which is why Nichols wants to export her clean-air programmes and ideas, especially to emerging markets. Nichols is advising China about enacting its own electric car mandate, and she's consulting with seven Chinese cities, including Beijing, that are testing a cap-and-trade programme.

"There are only a handful of people who've had the impact on clean air Mary has had," says Lisa Jackson, who was the Environmental Protection Agency's chief from 2009 to 2013 and now runs green initiatives at Apple. "She's implemented policies that are models for the world."

Brown is pushing the legislature to write into law his CO2 reduction plan for 2050, thus ensuring it will outlast his tenure in Sacramento. This includes an indefinite extension of a cap-and-trade programme, begun by Schwarzenegger, that requires utilities and industrial companies to buy permits for exceeding their carbon emission quotas and generates a revenue stream that Brown is using for things such as high-speed rail.