California Governor Gavin Newsom made headlines this week by announcing the state’s decision to phase out gas-powered cars. The ban on traditional autos seems like a radical move, although one that could be expected from the progressive state. By banning the sale of new, gas-powered vehicles, Newsome aims to cut down on the state’s reliance on fossil fuels and to curb climate change. While this may seem like a straightforward exchange—less gas consumption for reduced greenhouse gas emissions—there are many other ramifications to consider. So, here is a holistic look at California’s ban on gas cars.
What Exactly does this Executive Order Entail?
Using an Executive Order, Newsom took advantage of the policy put in place by President Richard Nixon which gave California the power to set its own auto emissions standards in an attempt to curtail the smog issues plaguing the state.
Newsom’s law is slated to go into effect in 2035, at which point it would ban the sale of newly manufactured, gas-powered vehicles; This would not affect gas cars that are already on the road. There was also a clause addressing medium/heavy-duty commercial vehicles, stating that they should be 100% emissions-free by 2045, “where feasible.”
By putting this order in place, Newsom believes that California’s greenhouse gas emissions will be cut by 35%. The decision comes at an interesting time. The auto industry seems to be on the precipice of a major change and although there are many major political conflicts currently at play, California has consistently prioritized environmental policy.
The Reaction from the Auto Industry is Split
Understandably, the auto industry has some opinions about Newsom’s decisions. Interestingly, it seems that those opinions are split. Ford Motor Company outright agreed with Newsom’s policy, while other companies agreed with John Bozella—president and CEO of Alliance for Automotive Innovation, an auto-industry group that represents Ford and virtually every major auto manufacturer—when he said that “neither mandates nor bans build successful markets.”
Some auto industry analysts believe that the window of time is too small for the technology to develop to the point where Newsom’s mandate is truly practical. Regardless of the order, it does seem like the industry is trending towards zero-emissions. BMW’s CEO Oliver Zipse had already set a goal to cut carbon emissions by 40% and to put 7 million electric BMWs on the roads over the next ten years.
Zipse has gone on record saying that “the best vehicles in the world are sustainable, that is why premium and sustainability will be even more inextricably linked in the future” and Volvo seems to agree. The Swedish auto manufacturer announced on Thursday, September 24th, that they would be launching a green bond to fund its electric vehicle program.
Internationally, there is a precedent being set. There are 22 countries that have some form of a plan to phase out fossil fuels by 2040, with most having their plan set to start in 2030. It would be naive to think that auto industry would be resisting change because of American purchasing power, even if California’s power to set their own emissions regulations is fully revoked by President Trump; so, do not be surprised if this becomes the norm.
Is this Practical?
At the end of the day, the question on most’s mind is whether or not this order is practical. Right now, the cost barrier to owning an electric vehicle is set fairly high, worrying some about their ability to drive in the future. This is why it is important to note that the ban only applies to the sale of new cars, used gas-powered cars would still be allowed to be sold in California after 2035.
This writer spent many years in California and can attest to the fact that the car culture in that state makes having an automobile almost a prerequisite. If the order were to prevent swaths of the nation’s most populous state from, it would most likely be revoked. Automakers themselves are also addressing that concern, with Tesla hoping to roll out an electric vehicle starting at $25,000 in the next few years.
Ultimately, there will have to be investment in infrastructure one way or the other. There will need to be significantly more charging stations put up across the state and Californians would most likely benefit from an overhaul to the public transit systems. Aside from those concerns, California’s production of electricity would need to increase by an estimated 25%.
All in all, this is a landmark order that is signalling a major shift in the automotive industry and in spite of Bozella’s assertion that mandates don’t build markets, there seems to be a lot of opportunities in many different sectors to capitalize on the change.