California moves to ban sales of new gas-powered cars
Sales of gasoline-powered cars and trucks will be banned in California by 2035 under an order signed by Gov. Gavin Newsom, a move he said will cut greenhouse-gas emissions by 35%.
The proposed rule issued Wednesday would not ban people from owning gas-powered cars or selling them on the used market. But it would end the sales of all new gasoline-powered passenger cars and trucks in the nation's most populous state of 40 million people.
California already mandates a certain percentage of new-car sales must be electric or zero-emission vehicles. The latest rules, if implemented, would make California the first state with a plan to phase them out completely and could push automakers to accelerate their plans for EVs.
The proposed ban received a decidedly mixed reception.
Ford Motor Co. expressed support for Newsom's executive order, which was signed on the hood of a Mustang Mach-E SUV, the automaker's electric reinterpretation of its Mustang.
“We agree with Governor Newsom that it’s time to take urgent action to address climate change," Ford wrote in a statement. "That’s why we’re proud to stand with California in achieving meaningful greenhouse gas emissions reductions in our vehicles as we electrify our most iconic nameplates like the F-150 and the Mustang Mach E."
General Motors Co. and Fiat Chrysler Automobiles NV deferred comment to the Alliance for Automotive Innovation, which opposes Newsom's order.
"The auto industry needs the electric car market to succeed, and Auto Innovators members are committed to expanding vehicle electrification. Our members already offer more than 40 electric car models, and by 2025, that number is expected to more than triple," Automotive Innovation President and CEO John Bozzella said in a statement. "But neither mandates nor bans build successful markets."
California has butted heads before with GM, Fiat Chrysler and other automakers. Last fall, GM and Fiat Chrysler sided with the Trump administration in a legal fight with California over a rule to strip the state of the authority to set its own tailpipe-emissions standards. California and 22 other states including Michigan sued two federal agencies for the administration's effort to roll back tougher gas-mileage rules enacted by the Obama administration.
At least 15 other countries have made similar commitments toward emissions-free futures, including Germany, France and Norway. The U.S. does not have a uniform policy on adoption of alternative-fuel vehicles, but California has led the country in adopting regulations aimed at bolstering the transition to zero-emission vehicles.
Some auto executives, such as GM CEO Mary Barra, have been vocal about wanting nationwide federal guidelines for emissions standards, and industry experts recommend it so automakers are not navigating a patchwork of standards across multiple states.
"It's certainly helpful to have a federal standard," said Jessica Caldwell, executive director of insights for market researcher Edmunds.com, an auto information website.
"From an auto company perspective, it's hard to make vehicles for different places. They already have to because of consumer tastes, and then some of the rules and mandates make a complicated system even more so."
Newsom’s order directs the California Air Resources Board to develop and approve regulations to meet the 2035 deadline. He ordered the board to require all medium- and heavy-duty trucks be 100% zero-emission vehicles by 2045 “where feasible.”
Newsom also directed state agencies to speed development of charging stations and called on the Legislature to eliminate new natural-gas fracking licenses by 2024.
The directives come as massive wildfires have burned a record 5,600 square miles in California this year. Experts say the size and intensity of the fires are aided by warmer temperatures and years of drought brought on by climate change.
Wednesday's announcement did not surprise David Butler, executive manager for Suburban Cadillac, which has three GM dealerships in Michigan and one in California.
"California has typically been on the forefront of electric vehicles. From the standpoint that (Newsom has) given manufacturers 15 years' notice, that sort of helps," he said. "Most of the manufacturers are planning their future in the direction of non-(internal combustion engine) vehicles."
Today, electric vehicle sales account for a small fraction of the U.S. market. Fully electric vehicles made up just 1.3% of total new vehicle sales in the first half of 2020, according to Edmunds.
"Maybe this is less of an issue in 15 years, but as we stand right now, electrification is still such a small part of overall new vehicle sales," Caldwell said.
Auto industry experts and vehicle manufacturers, however, believe demand will grow significantly in the coming years. EVs are expected to make up 21% of all light-duty vehicle sales globally by 2030, according to a recent forecast by Guidehouse Insights.
But pushing forward with this executive order will come with difficulty, experts say.
The order doesn't specify if sales of hybrids — which mate an electric motor with a gasoline engine — would be banned. It only states that all new passenger vehicles sold by 2035 must have zero emissions. California's current regulation considers plug-in hybrids zero-emission vehicles, along with battery-electric and hydrogen fuel-cell powered vehicles.
The difficulty will come in getting the cost down on these types of vehicles "to the point where it's going to be acceptable to the market so people want to buy them," said Sam Abuelsamid, principal analyst for Guidehouse Insights.
Another challenge will be getting the charging infrastructure needed to support the additional EVs on the road.
"There's a lot of people today that don't live somewhere where they have access to charging at home," Abuelsamid said. The automakers will "have to take a serious look at investing more in the infrastructure in order to support these vehicles."
Ford has committed to investing $11 billion on electric-vehicle development by 2022. The Mach-E is due out later this year, and an all-electric F-150 is slated to enter production in 2022.
GM is spending $20 billion on electric and autonomous vehicles through 2025. It's pushing to have 20 electric nameplates by 2023 globally.
GM recently unveiled the Cadillac Lyriq, a crossover that will be the luxury brand's first all-electric vehicle when it hits U.S. dealers in late 2022. Cadillac will be the leading electric brand for the Detroit automaker. Brand executives expect to sell more electric vehicles than gas-powered by the end of the decade.
GMC will soon premiere the Hummer EV, an all-electric version of the massive off-roading vehicle that GM stopped selling more than a decade ago.
Cadillac dealer Butler is excited to see how the Hummer EV sells.
"(EV) adoption has been rather limited thus far, especially with where fuel prices have been, but as we've seen over the last two decades, things could change quickly in that arena," he said. "For the governor to go out 15 years, it may be that it's not even an issue because we've all switched over, or it could be we haven't really adopted it here in the U.S."
Fiat Chrysler has previously stated it will invest $10.5 billion on electrification of its fleet through 2022 and introduce electric or hybrid versions of more than 30 models through 2022.
Newsom's order could push automakers to get their electric lineups ready for the market faster.
"They will definitely have to make the transition more quickly than they intended," Abuelsamid said. "They will have to find a way to do it where it's cost-effective, so it doesn't kill sales — because if the vehicles remain too expensive, you're not going to be able to sell them."
Associated Press contributed to this report.