While major carmakers have dragged their heels on delivering the next big breakthrough on fuel efficiency, the plug-in hybrid, a small group of California entrepreneurs and innovators have made it possible for consumers to convert existing hybrids into plug-in cars running mostly on electricity. Yet, later this week, the California Air Resources Board (CARB) is expected to adopt new regulations that could put many of those conversion companies out of business.

Converting a conventional hybrid into a plug-in hybrid can approximately double the fuel efficiency of a Toyota Prius—from about 45 mpg to nearly 100 mpg—thus greatly reducing the greenhouse gas emissions from the vehicle. But CARB is concerned about potential increases in smog-related emissions from the converted vehicles.

Air resources board engineers are recommending that plug-in hybrids undergo extensive cold-start emissions and gasoline-evaporation testing. According to agency documents, the tests could cost between $20,000 and $125,000 depending on the number of vehicles that CARB wants each company to test. The board’s staff also wants to require the new companies to provide consumers with warranties for the changes they make to hybrids for up to ten years or 150,000 miles—despite the willingness of consumers to pay for conversions without the warranty.

Speak Up

Submit your views on the new rules directly to CARB before the meeting on Jan. 22 and 23

The new rules, which will be considered at CARB’s next meeting on January 22 and 23, will require small start-up companies offering plug-in conversion services to shoulder the costs of these expensive emissions tests.

A plug-in hybrid car is similar to a conventional hybrid vehicle—both use a gasoline engine as well as an electric motor. However, a plug-in hybrid uses larger battery packs that can be recharged by connecting to common household electricity. Plug-in hybrids can be driven for long distances—from a few miles to as much as 40 miles—without using any gasoline. Depending on the type of battery used, after-market plug-in conversions cost between approximately $7,000 and $10,000. As currently constructed, hybrids rely on the gasoline engine running for emissions-reducing components, such as the catalytic converter, to fully clean up the tailpipe emissions and burn off vapors from unused gasoline in the tank.

Potential Workarounds

Plug-in conversion companies can apply a simple technical fix to the problem: Make sure the Prius’s gasoline engine turns on when you start your car—so the catalytic converter warms up and the evaporation canisters are vented. Nonetheless, CARB wants the emissions tests, which are cost-prohibitive for the conversion companies.

Leading plug-in hybrid advocacy groups, such as CalCars, have also offered administrative solutions, such as waiving full-scale emissions tests for small conversion companies until they have completed a certain number of conversions. Until that time, these companies—many of which have only completed a dozen or so conversions—would be required to submit written documentation about emissions. “It’s simply too early for government regulation of plug-in hybrids,” said Felix Kramer, co-founder of CalCars, in an interview with the weekly East Bay Express. “Acting too soon will shut off innovation and will kill companies that are just getting started.”

Ironically, CalCars and the dozen or so conversion companies around the country demonstrated the potential of plug-in hybrids to major car companies, which have finally swung into action. The 2009 Detroit Auto Show, running through January 25, featured numerous plug-in hybrid and electric vehicles due in the next couple of years. General Motors is banking on its plug-in hybrid, the Chevy Volt, to save the ailing company. And President Obama wants to see 1 million plug-in hybrids on US roads by 2015.

Despite all the media attention about plug-in hybrids, it’s still not yet possible for an individual consumer to buy one from a car dealership. For at least the next two years, the only way to get a plug-in hybrid is to take matters into your own hands by converting an existing hybrid. If CARB passes its new rules, that option may also disappear.

“For California to be on the cutting edge of green-tech, they need to be more of an enabler than a restrictor,” said Paul Guzyk of 3Prong Power, which offers plug-in conversion services in Berkeley, Calif. “For us, the new regulations are a deal breaker.”

Update: On Jan. 23, the California Air Resources Board overruled its own staff and unanimously ordered the agency to work out a compromise with plug-in hybrid companies. The board, led by its president, Mary Nichols, ordered the air resources agency staff to devise new regulations ensuring that small startups can continue to provide conversion services. While the board refused to adopt the new regulations on aftermarket companies, it did approve emission testing rules on new car manufacturers that plan to begin selling plug-in hybrids in the next year or two.