The beginning of the end of the internal combustion engine? California to phase out gas-powered vehicles by 2035 | Vide Rome LLP

A leader in stringent automotive emissions regulations, the State of California has recently taken additional steps in its efforts to further protect the environment. On August 25, 2022, the California Air Resources Board (“CARB”) voted to require all new cars and light trucks sold in the state to be “zero emissions” by 2035.[1] The plan, officially known as the CARB Advanced Clean Cars Rule II, was originally introduced by Executive Order by Governor Gavin Newsom nearly two years ago.[2]

The plan provides that “[i]It will be a state goal that 100% of in-state sales of new passenger cars and trucks be zero emissions by 2035. It will be another state goal that 100% of medium and heavy-duty vehicles in the state be zero emissions by 2045 for all operations where possible and by 2035 for drayage trucks. The state also aims to move to 100% zero-emission off-road vehicles and equipment by 2035, where possible.[3]

The phasing out of petrol and diesel vehicles will be phased in, with these traditional motor vehicles being phased out over time. The plan calls for 35% of new passenger vehicles sold to be zero emissions by 2026, 51% by 2028, 68% by 2030 and 100% by 2035.

CARB’s endorsement of the Advanced Clean Cars Rule II makes this 2035 goal official California state policy. Although the U.S. Environmental Protection Agency has yet to grant the state a waiver to set its own auto emissions policies under federal clean air law, this will likely happen under the Biden administration.

Exhaust emissions are the largest source of greenhouse gas emissions in California and accounted for 40% of the state’s greenhouse gas emissions in 2019 and nearly 50% today. According to air quality officials, this new mandate has the potential to reduce greenhouse gas emissions from cars by more than 50% by 2040.

California’s history of reducing automotive emissions and increasing fuel efficiency has led to some or all of its rules being adopted by 17 other states over the years, despite the fact that the standards California’s tailpipe emissions are stricter than federal rules. As such, it is likely that CARB’s Advanced Clean Cars II rule could eventually be adopted elsewhere. As it stands, Washington and Massachusetts have pledged to adopt similar policies, and other states may soon follow suit.[4]

In particular, CARB faces two daunting challenges in achieving its zero emissions goals: cost and charging infrastructure. With respect to infrastructure, the original executive order called for numerous state boards, commissions, and agencies to use their authority to “accelerate the deployment of affordable refueling and charging options for zero-emission vehicles, so as to serve all communities and especially low-consumption vehicles”. income and disadvantaged communities, in accordance with federal and state law. »[5] Additionally, the “Energy Commission, in consultation with the State Air Resources Board and the Public Utilities Commission, will update the statewide biennial assessment of required zero-emission vehicle infrastructure. by Assembly Bill 2127 (Chapter 365, Statutes of 2018) to support the levels of electric vehicle adoption required by this Order.[6]

Even assuming the many logistical hurdles of increasing charging infrastructure are overcome, the cost of the fuel-efficient vehicles themselves is an even bigger hurdle. The purchase of an electric vehicle (“EV”) has been and remains considerably higher than that of an equivalent gas-powered vehicle. Kelley Blue Book price estimates indicate that the average electric vehicle sold for $66,000 in July 2022, compared to $48,000 for the average internal combustion vehicle. Despite the difference in cost, electric vehicles have steadily gained market share in California over the years, growing from just 2% of new vehicle sales in 2002 to 7% in 2018, reaching around 16% of the vehicle market. new this year. According to CARB, there are now 1.13 million zero-emission vehicles registered in California, representing 43% of total electric vehicle registrations in the United States.

Both the federal government and California offer incentives to help lessen the “sticker shock” of zero-emission vehicles. The federal government just passed the Cutting Inflation Act, which includes tax credits worth between $3,500 and $7,500 for owners of electric vehicles, and California has its own plan. Clean Vehicle Rebate that provides $1,000 to $7,000 towards the purchase or lease of certain electric vehicles.

Is this really the beginning of the end of the internal combustion engine? Probably not. With apologies to Mark Twain, reports of the death of the internal combustion engine are greatly exaggerated. For starters, the mandate for zero-emission vehicles actually includes vehicles that are not 100% zero-emissions. California will allow up to 20% of an automaker’s sales to be plug-in hybrids, that’s to say, powered by both electric motors and gasoline engines, and still count as zero-emission vehicles, as long as the battery range is 80 km or more. Additionally, and perhaps a relief to classic car enthusiasts, motorsports fans and automotive enthusiasts, the new CARB mandate allows owners of internal combustion cars to continue driving them past 2035. It will remain also legal to buy and sell gasoline and diesel powered cars and light trucks.

It remains to be seen whether California’s ambitious goal of moving toward a zero-emission vehicle future will progress on schedule or require a change in federal regulations. Other considerations to watch include the differing positions taken by major automakers toward the mandate and the effects on the state’s oil industry.[7] Regardless of how the mandate progresses over time, California continues to push the envelope in its bid to reduce carbon emissions and fight climate change.

[1] This plan will phase out all gasoline and diesel cars, SUVs, minivans and pickup trucks in favor of cleaner versions powered by batteries or fuel cells.

[2] Executive Department State of California, Executive Order N-79-20 (September 23, 2020).

[3] ID. to 1.

[4] Washington’s timeline to phase out the sale of internal combustion engine vehicles is even more ambitious than California’s, with a plan to do so by 2030.

[5] Executive Decree N-79-20 at 4.

[6] ID. at 5.

[7] Currently, California is the seventh largest oil producing state.

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