California can heavily influence the speed at which automakers transition toward EVs, as the nation’s top market.
In a move meant to firm up details laid out in a 2020 executive order, California governor Gavin Newsom has positioned the state to completely phase out sales of new gasoline-powered vehicles by 2035. The California Air Resources Board (CARB) will vote on a rule in place to that effect — one that will set a ticking clock for automakers to complete their electric vehicle transition within the next 13 years.
It’s likely not just California that will impact the industry with that 2035 end date, either. 17 other states follow the California’s emissions standards, meaning today’s rule decisions could emanate out through like-minded state governments. In turn, that would further pressure car companies to accelerate their EV rollout, as well as more aggressively wind down their internal combustion development.
Several automakers have already invested billions into making the EV switch. We are seeing more and more electric models emerge, with some like the Dodge Charger Daytona SRT Concept directly supplanting gas-powered cars. Right now, EVs make up more than 15% of new vehicle sales in California (as of June 2022), though the state wants to increase that share to 35% by 2026. From there, the target will ramp up to 68% in 2030, before full electric sales are required in 2035. In the interim period, some plug-in hybrid models may count toward hitting targets CARB sets forth in this week’s rulemaking.
Is 2035 a realistic target?
Even as manufacturers pour unprecedented amounts of money into an EV push, there’s a great deal of concern whether setting that hard deadline is a realistic goal.
California does have its own statewide EV incentive program, offering up to $7,000 toward EVs that cost less than $45,000. The recently passed Inflation Reduction Act also revamps the $7,500 tax credit to EV buyers, while the infrastructure law passed last year dedicates $5 billion toward charging infrastructure. Despite all the investment, though, some analysts question whether it’s enough.
The average transaction price for an EV in July was nearly $62,900, according to Edmunds.
Current component shortages, supply chain issues and high material pricing may also continue to reverberate through the industry over the coming years. Changing consumer habits away from gasoline after more than a century of widespread use also casts a shadow on CARB’s 2035 deadline. Still, there’s also optimism that investment and support will see companies rise to the challenge.
At time of writing, we’re roughly 13 years away from that threshold. We will have to see how infrastructure, affordability and desirability for EVs moves in that timeframe. Of course, the team will continue to watch how everything unfolds and report back with regular updates.
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