California’s Electric Vehicle Revolution Paves a Bumpy Path for Other States
California Governor Gavin Newsom often mentions that “California leads.”
However, for any state following Newsom’s ambitious plan to prohibit the sale of gasoline-powered cars, warning signs are beginning to appear.
During the COVID pandemic, Newsom utilized his emergency powers to issue an executive order banning the sale of new internal combustion engine vehicles by 2035.
To enforce this order, the California Air Resources Board established rules requiring that by 2026, 35% of cars sold by auto dealers in California must be electric vehicles.
Newsom stated that automobile manufacturers must “comply under force” or risk losing access to the California market.
He claimed that this move would lead to a national “tipping point” for the widespread adoption of electric vehicles.
However, it seems that California consumers are increasingly leaning in the opposite direction.
In the third quarter of 2023, EV sales in California dropped by 2.8%, as reported by the California New Car Dealers Association.
In the fourth quarter, Tesla sales decreased by 10% and overall EV sales fell by 10.2%.
This decline resulted in EVs accounting for 21.1% of new car sales in California, down from 23.3%.
Eight other states, including New York and New Jersey, have adopted California’s plan to phase out gasoline-powered car sales by 2035, regardless of consumer preference.
However, there are valuable lessons to be learned from California.
Consumers in California have encountered several challenges with fully electric plug-in vehicles.
They are more expensive to purchase and insure compared to gasoline-powered vehicles, not to mention the additional cost of owning a secondary vehicle for situations where a charge may not suffice.
Additionally, the cost of electricity in California is a concern.
Residential electricity rates are approximately double the national average, leading to a controversial law in 2022 that tied utility rates to household income, widely unpopular among consumers.
Moreover, the public charging infrastructure for electric vehicles outside the home is unreliable and inconsistent.
Studies suggest that only around 80% of chargers are operational at a given time, and finding another one could pose a challenge.
Despite Vice President Kamala Harris’ announcement in 2021 about funding for 500,000 chargers along highways, only seven stations have been constructed.
Car manufacturers are gradually distancing themselves from this trend.
General Motors shifted away from plans to manufacture 400,000 EVs in 2024 and delayed the introduction of two new electric pickup trucks.
Ford Motor Company reduced production of the electric F-150 Lightning by 50%.
Tesla decreased prices, and Mercedes retracted its decision to exclusively sell EVs by 2030.
Even rental car companies are acknowledging reality, with Hertz announcing the sale of 20,000 EVs and the shift to gas-powered purchases.
The decreasing prices of used EVs in 2023 reflect consumer dissatisfaction with the trend.
As usual, government central planners believe they know best.
The Biden administration is utilizing regulatory authority to limit consumer options by gradually eliminating gas or diesel-powered vehicle sales.
In March, the Environmental Protection Agency issued a final rule regarding tailpipe emissions for passenger cars and light trucks, mandating manufacturers to adhere to maximum allowable greenhouse gas emissions by 2032.
To meet this standard, about 56% of new vehicles from a manufacturer would need to be battery-powered, with hybrids accounting for only 13% and internal combustion engine vehicles making up less than a third.
Another rule announced by the EPA on March 29 focused on “Greenhouse Gas Emissions for Heavy-Duty Vehicles,” such as freight trucks, aiming to transition to electric trucks by the 2027 model year.
The EPA claimed these requirements would stimulate private investment and provide manufacturers with time for developing cleaner heavy-duty vehicle technologies.
Essentially, the electric trucks compliant with this EPA regulation are not yet available.
The EPA’s lack of economic consideration mirrors the California Air Resources Board, which established an “Advanced Clean Fleets” rule last April. CARB’s rule prohibits the sale of new traditional combustion trucks by 2036 and gradually bans them from roads completely by 2045.
Although these mandates are likely unattainable, they are immediately costly.
The Clean Freight Coalition estimated that developing charging infrastructure for electric trucks would cost $1 trillion, excluding the trucks’ purchase price.
In California, the Public Utilities Commission disclosed that ratepayers would bear the cost of utility upgrades required for charging electric trucks.
Considering that 20% of investor-owned utility customers are behind on their payments and customers of Pacific Gas & Electric face a 12.8% rate increase this year, this poses a significant financial burden.
The EPA’s rule may violate the Supreme Court’s 2022 decision in West Virginia v. EPA, which stated that agencies cannot make major decisions on national public policy by exceeding their congressional authority.
However, for residents of California and states following its lead off the economic precipice, the consequences of elections are evident.
Susan Shelley is a columnist and editorial writer for the Southern California News Group and VP of Communications for the Howard Jarvis Taxpayers Association. On X: @Susan_Shelley.
