By Alisa Reinhardt, Director of Government Affairs
On Sept. 23, 2020, Governor Gavin Newsom signed an Executive Order directing the California Air Resources Board (CARB) to enact regulations to require all new cars and passenger trucks sold in California to be zero-emission by the year 2035.
According to Governor Newsom, this action is necessary to combat climate change. In a statement, Governor Newsom said internal combustion vehicles are the target because the transportation sector is responsible for more than half of all of California’s carbon pollution, 80% of smog-forming pollution, and 95% of toxic diesel emissions, and this mandate would result in more than a 35% reduction in greenhouse gas emissions and an 80% reduction in nitrogen oxide emissions from cars statewide.
In the Executive Order, CARB was also directed to develop regulations mandating all medium- and heavy-duty vehicles to be 100% zero-emission by 2045 “where feasible.” To support the infrastructure that will be necessary to support the mandate, the order requires state agencies, in partnership with the private sector, to accelerate the deployment of charging options. It also requires the support of new and used zero-emission vehicle markets to provide broad access to zero-emission vehicles for all Californians, although it is unclear what form that support would take.
While the Executive Order will not prevent Californians from owning gasoline-powered cars or from selling them on the used car market, this transition would have a massive impact on California’s new car dealers, as zero-emission vehicles remain a small percentage of the 2 million new vehicles sold in California each year.
The federal Environmental Protection Agency (EPA) immediately responded to news of the Executive Order by warning Governor Newsom that the Executive Order “raises serious questions regarding its legality and practicality.” However, the victory of President-elect Biden drastically changes the game when it comes to the federal EPA and CARB butting heads. It is all but certain that the EPA under Biden will immediately stop defending Trump-era lawsuits and instead work hand-in-glove with CARB on vehicle emissions standards and other environmental issues.
The State of California continues to push the sale and widespread adoption of zero-emission vehicles through goals and now mandates. If CARB adopts regulations to implement a 2035 ban on the sale of all new internal combustion engine vehicles, this mandate will have a drastic impact on dealerships statewide in sales departments and service departments, and could result in out-of-state dealerships having an unfair competitive advantage over California dealers. We also would like to see off-ramps included in any future regulations if consumer acceptance does not improve.
CNCDA immediately issued a public statement in response to the Governor’s announcement, noting the following:
“While we greatly respect the governor’s ambition and emphasis on California leading the fight to combat climate change, we have many unanswered questions about fundamental components of his Executive Order to ban the sale of gasoline-powered vehicles by 2035, including the implications on consumers and the state’s preparedness to take on such a directive remains deeply involved in these developments and will continue to do so in the months and years ahead.
“Foremost, if the policy is ultimately adopted, this will transform how Californians move about our state. Such a significant public policy change and drastic shift in how Californians operate every single day requires addressing upfront, critical elements to how this directive will be met, including consumer adoption, consumer affordability, infrastructure, mandates versus goals, and current standards not being met.
“Additionally, bypassing the elected legislature and directing the California Air Resources Board (CARB) to adopt rules to prohibit the sale of non-ZEV vehicles to enact this significant transportation policy change is deeply troubling and deprives Californians of a direct voice in this important issue.
“While we support the state’s goals to combat climate change, there are many questions and factors that need to be thoughtfully considered and addressed before implementing such a mandate on consumers.”
CNCDA is deeply engaged on this issue, and staff will continue working closely with dealer leadership to further develop a comprehensive plan on how to insist that the administration address the critical unanswered questions and concerns we have about the Governor’s mandate. As these developments unfold, we will keep you apprised.
Alisa Reinhardt
Director of Government Affairs
This story appears in Issue 4 2020-21 of the California New Car Dealer Magazine.
