Consumer groups say customers might pay more for the vehicles but will save in lower fuel and other costs.
Both sides submitted testimony Thursday during a meeting of the state's air quality board, which was poised to vote on rules to require that vehicles emit about 75 percent less smog-producing pollutants.
The new standards, which also include big cuts in greenhouse gas emissions, would begin with new cars sold in 2015, and get increasingly more stringent until 2025. The rules also mandate that one of every seven new cars sold in 2025 in the state be a zero-emission or plug-in hybrid vehicle.
California Air Resources Board Chairman Mary Nichols said she hopes the rules lead "the nation and the world."
"We can't afford to wait. We have to act on these issues now," she said at the panel's meeting. "Our projections show continued growth in population and vehicle miles traveled, which will affect air quality for years to come."
Other states often adopt California's smog emissions standards because they are stricter than federal ones.
Fourteen states, including Washington, New Jersey, New York and Massachusetts, have adopted the state's current emissions goals, which is why the new regulations could have a wide-ranging effect. Of those states, 10 also adopted the zero-emission vehicle standards.
But the California New Car Dealers Association and other industry groups representing those who sell cars said the board is overestimating consumer demand for electric vehicles and other so-called "zero-emission vehicles."
Some dealer groups have estimated that $3,200 would be added to the average cost of a car because of the required technological changes, and that consumers have been slow to adopt them.
Jonathan Morrison, of the state dealers' association, said car retailers are supportive of new technologies that are accepted by their customers, but said the acceptance of electric and other vehicles has been slow.
"Consumers do not make purchasing decisions based upon regulatory mandates," he said.
The board's research staff disputes those estimates and says increases in hybrid and other sales continue to rise as more cars hit the market. They argue that fuel cost savings will make up for any vehicle price increase.
"Our research shows a $1,400 to $1,900 car price increase. But over the life of the vehicles, the owners save $6,000 in reduced fuel and maintenance costs," board spokesman David Clegern said. One of the nation's foremost consumer groups, the Consumers' Union, the policy and advocacy division of Consumer Reports, supports the regulations.
The rules will "protect consumers by encouraging the development of cleaner, more efficient cars that save families money, help reduce the American economy's vulnerability to oil price shocks and reduce harmful air pollution," according to a letter from the group.
Automakers including Ford Motor Corp., Chrysler Group LLC, General Motors Co., Nissan Motor Co. Ltd. and others said they generally supported the regulations in short statements delivered during the hearing.
The overall goal of the state is to have 1.4 million zero-emission and plug-in hybrids on California roads by 2025. But the program also looks ahead to 2050, laying groundwork for a goal of having 87 percent of the state's fleet of new vehicles fueled by electricity, hydrogen fuel cells or other clean technologies.
Yet the rules do provide some flexibility for automakers by giving them the ability to claim credits toward the state's zero-emission mandates if the company's other models exceed the federal greenhouse gas emissions mandates. The credits could be applied toward those zero-emission vehicle mandates starting in 2018 through 2021.
However, this aspect of the plan was not supported by many of the U.S. car makers, who said it could take hundreds of thousands of electric and other clean vehicles off the road in that time period, hurting the emerging market.
"This greenhouse gas over-compliance provision runs counter to the goals of the zero-emission vehicle mandates," said Robert Babick, speaking on behalf of GM. "We don't see how this provision makes the program better."
The board is scheduled to resume hearing testimony on Friday morning in Los Angeles.