In a little over a decade California plans for the majority of its vehicle sales to be electric.
The Golden State’s plan will work by incrementally increasing the amount of new car sales required to be electric. Currently, 15% of new car sales in California must be electric. By 2026, that number will increase to 35% and 68% by 2030.
California Governor Gavin Newsom originally announced the plan two years ago in an executive order, however the new percentage rules announced have set an established timetable for automakers to follow.
Hybrid cars would count toward California’s overall goal.
California isn’t the only government looking to ban gas-powered vehicles. In fact, they’re a little behind the curve. Europe and some parts of China have plans to phase out gas-powered vehicles by 2030.
European car companies Fiat, Chrysler Europe, and Bentley plan to phase out production of gasoline vehicles in line with Europe’s plans to go electric.
Why it’s news
California’s move will likely signal the end for gas-powered vehicles in the U.S.
States in New England and the Pacific Northwest typically follow California’s lead when making decisions on vehicle standards. Outside of state regulation, General Motors and Chrysler have announced plans to phase out gas-powered vehicles in the next several years.
General Motors’ schedule has the company set to phase out the vehicles by 2035. Chrysler is on a more accelerated plan, aiming to retire the gas vehicles by 2028. Ford is currently planning on 40% electric vehicle sales by 2030, Fortune reported.
Backing up a bit
California’s decision coincides with President Joe Biden’s Inflation Reduction Act he signed just a week ago. The bill included tax credits for car owners switching to electric along with other incentives for Americans to go solar.
Many automakers like Ford, Chrysler, and General Motors are upping their production of EVs, but those same manufacturers are concerned at the speed they are being forced to do so.
If the manufacturers are restricted to certain timetables, there is little room to allow the companies to adjust for consumer demand. Just in the first half of this year, EV sales only made up 6% of new vehicle sales, Fortune reported.
EVs are more expensive than gas vehicles, a big concern for consumers facing inflation. War in Ukraine could raise the prices even higher as access to necessary materials becomes more difficult.
The average EV cost $62,900 in July. All other vehicles averaged $47,200.
Switching to EVs will also mean a big change for current U.S. oil imports. About 60% of U.S. petroleum was used for gasoline and diesel motors. If California’s plan is successful, oil companies will have major adjustments to make.