California’s zero-emissions vehicle law could cost Toyota, darling of the environmental crowd, up to a billion dollars reports Bloomberg. That’s more than any other automaker is looking at. Why? Because by 2012, California will require that 3 percent of unit sales over a three-year period be zero-emissions models. Since Toyota has over 24 percent of the California car market (nearly double Honda, which is number two at 12.9 percent), it’s facing far stiffer requirements. And unlike Honda it doesn’t have a hydrogen fallback (although Honda’s FCX Clarity is not yet on sale). According to Bloomberg, Toyota will have to sell 16,000 plug-in hybrids (PHEVs) and EVs come 2012. “If you’re only discussing the cost of batteries and other components, a $1 billion cost for Toyota may be a stretch,” says Brett Smith of the Center For Automotive Research. “Add in all the things needed to support these vehicles — service, dealer training, marketing, warranties, new manufacturing equipment to get them into production, and [$1b] sounds reasonable” Toyota is declining comment on the exact cost of CARB compliance, but has already questioned whether PHEV demand will live up to enthusiast expectations.

From Despair Inc (via Jalopnik), comes a T-shirt that is sure to outsell the Aveo. Is it time to declare the death of the ironic T-shirt?

We rip on the Volt a lot around here. And with good reason. But at least GM’s moonshot has a few things going for it, like a gas range-extender, a real (if devastated) dealer network, a metric ton of government money and over a year of relentless hype. Coda Automotive has none of those things, but apparently widespread ridicule of the Volt and other overly optimistic variations on the overpriced EV theme aren’t stopping the firm from letting it all hang out for the LA Times.

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The latest attempt to bring the hottest Euro-fad in the biz has failed in the Senate Appropriations Committee, reports the Detroit News. Was it because it was attached to a tobacco regulation bill of all things? Or because SenAppCom has bigger, better plans for Obama’s stimulus money? Or because of the nascent green opposition which kiboshed the measure mere weeks ago? Who cares? At least it’s dead. For now. Since the idea has the White House’s support, expect it to be exhumed at least a few more times.

So reports the Detroit Free Press. For some perspective, The Center For Responsive Politics says GM spent $500,000 in the first three months of the year on independent lobbyists, compared with $2.8 million on its in-house lobbying corps. This “may cause some unique situations,” says to the president of the American League of Lobbyists. And that’s a hell of an understatement, considering that GM will soon be owned by a government led by a man who vowed to limit the influence of lobbyists in his administration. A GM spokesman declined to say whether the administration has given it guidance on lobbying activities.

Shark number one is Ford, which is making a concerted effort to steal sales from its cross-town rival. Automotive News [sub] reports that Ford is rolling out a regional incentive program aimed at existing Chrysler owners. Ford is offering Chrysler owners an additional $500-$1,000 on the purchase of a new Ford to owners of Chrysler vehicles older than the 2006 model year who have had service work done at Ford dealerships in the past three years. However, Ford is keeping the program as targeted and low-profile as possible. “We’ve been very cautious and certainly not predatory with regard to this,” say Ford spokesfolks. Which is smart. Domestic buyers seem to prefer other domestics, and Ford can only benefit from the uncertainty surrounding the other Detroit firms. Still, Ford should probably consider sending Chrysler owners an update on ChryCo’s attempt to welsh on its legal liability. Meanwhile, Automotive News [sub] reports that Ford is increasing production, as it angles for Chrysler’s declining market share. Toyota is, too, says AN [sub]. Let the feeding frenzy begin!

The NYT Wheels blog reports that Judge Arthur Gonzalez has overruled pleas by consumer advocates and law professors by granting Chrysler’s request to exempt “New Chrysler” from any liability arising from “Old Chrysler.” Public Citizen, the Center for Auto Safety and Consumers for Auto Reliability and Safety have formally objected to the move on the grounds that current owners of Chrysler vehicles will have no legal recourse if they are injured because of a product defect. A lawyer representing these groups has said they will seek an appeal, the second objection to date to the Chrysler asset sale. According to testimony by Robert Nardelli, the idea of not allowing current owners to sue came up during the discussions between the Treasury and Fiat. Unlike the State of Indiana’s appeal of the Chrysler asset sale, this appeal has the potential to completely change the incentives for Fiat to take over Chrysler. If an appeals judge hears and approves this objection, Fiat could simply walk away.

According to Automotive News [sub], the Second Circuit Court of Appeals has granted a stay of Chrysler’s asset sale, pending a hearing scheduled for Friday. The stay comes on a motion (PDF) filed by the Treasurer of Indiana, Richard Mourdock (motivation found here) on behalf of several Indiana funds which hold first-lien secured Chrysler debt. A panel consisting of Chief Judge Dennis Jacobs, Judge Amalya Kearse and Judge Robert Sack will hear Mr Mourdock’s appeal on at 2pm Friday, delaying the Chrysler asset sale which has already been approved by Chrysler’s judge Arthur Gonzalez. If the appeal delays the asset sale past June 15, Fiat could walk away. The appeal follows the arguments of earlier “hedge fund holdouts,” making the case that government is overturning bankruptcy law and screwing secured bondholders to move the UAW to the front of the line. Only the state of Indiana apparently isn’t scared of the alleged government strong-arming that squelched previous bondholder opposition. Hit the jump for selected quotes from their appeal.

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Well, that’s how the Freep puts it. So will GM be leaving the toilet seat down? Will it apply for a separate credit card to pay for its extramarital liaisons? Will it be hiding its Playboy inside the latest Economist? Want to clear this up for us, CFO Ray Young? “As a privately held company, it’s likely we’re not going to disclose information except to the shareholders,” says Young. “We do not have to file all of the same documents that we do when we are a public company,” clarifies Chairman Kent Kresa. All of which creates more mind-benders than Will Shortz on a weeklong acid bender.

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Chrysler may be headed out of bankruptcy, but it’s sales aren’t headed out of double-digit declines any time soon. Chrysler’s best performer? The Challenger, which racked up a meaningless 3696 percent increase over May 2008’s 71 units sold (per Chrysler’s official release).  That translates to 2,695 units sold last month. Also, Wrangler topped May ’08 sales by 34 units. 300 was down only 23 percent, Liberty was down only 26 percent and Ram only shed 21 percent. Otherwise, this was pretty much the monthly bloodbath routine. Aspen (-67 percent), Compass (-70 percent), Commander (-54 percent), Dakota (-76 percent), and Durango (-56 percent) all failed to break past triple-digit sales. Everywhere else, now-routine drops of 50-70 percent were the norm.

Gosh that sounds bad, doesn’t it? Honda’s silver lining is (sorta) legit though, since the big H set an all-time sales record in May 2008. Toyota has no such excuse. Besides, falling sales are salling sales. So let’s put the lipstick away, and take a good, hard look at this pig.

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Automotive News [sub] cites two reports that Hummer will be puchased by Sichuan Tengzhong Heavy Industrial Machinery Co of Chengdu, Sichuan Province, China. Sichuan Tengzhong does not currently build cars or trucks, focusing on road and maintenance equipment. No word yet on the agreed-upon price. Meanwhile, GM tells the AP that it is currently entertaining offers from no fewer than 16 interested parties for its Saturn brand. Hey, I want Saturn too . . . better make that 17.

GM sales dropped last month by 29.6 percent compared to May 2008, according to GM’s press release. Sales volume was up 11 percent compared to April 2009 though. Guess which number GM’s release latches onto with boa constricter force?

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Automotive News [sub] reports that GM will force its remaining dealers to sign “participation agreements” requiring them to complete any upgrades GM requires. If they don’t sign on the dotted line by mid-June they face having their franchise agreements “yanked” says GM’s Mark LaNeve. “They get put into the old company and get a fairly quick termination, like the Chrysler dealers did,” LaNeve said. “Their sales and service agreement will be rejected and put into the old company.” GM will send out letters to its dealers tonight, according to AN, which will detail the requirements to remain a part of GM’s happy family.

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