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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.”This story appears in the September issue of Bloomberg Markets magazine.This story appears in the September issue of Bloomberg Markets magazine.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. (General Motors said catalytic converters, an early advance in tailpipe pollution control that Nichols promoted in the 1970s, could kill the company. They’re commonplace today, and GM’s not dead yet.)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. “Under her leadership, the Air Resources Board has been the driving force for electrification,” Tillemann says.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, ZEV
