The California Air Resources Board is expected to finalize Governor Gavin Newsom’s executive order that bans the sale of gas-powered cars by 2035. The rules would require all new cars on the market here to be zero emission. And they have the potential to transform the U.S. market. That’s because California alone makes up 11-12% of new vehicle sales in the U.S., says Alan Ohnsman, senior editor at Forbes.
He explains that the auto industry is undergoing a major transition right now: Every major car maker has announced plans to add lots of new electric vehicles (EVs) and set up facilities to produce batteries and components for those EVs. Plus, the new Inflation Reduction Act has incentives for both consumers to buy electric and for companies to get manufacturing plants up.
He says the first target year is 2026, when 35% of new passenger vehicles sold in California must be non-combustion, and that percentage will grow each year until the market reaches 100% in 2035.
People will still be able to purchase a used gas-powered car here, but Ohnsman says incentives will encourage them to trade up and go electric.
For example, the Clean Vehicle Rebate Program pays low-income Californians up to $7,000 when they buy a new EV, and another federal program would give up to $7,500 in tax credits on certain qualified EVs.
Non-combustion cars can be expensive, but Ohnsman says the automotive market will start selling low-cost options.
“There will definitely be a big growth in … the more attainable, affordable EVs [space]. It's not clear that Tesla is going to be playing in that market anytime soon. But General Motors and Hyundai and Kia and Ford and others are absolutely going to be moving into that high [$20,000], mid-to-high $30,000 price range over the next year or two,” he says.
Ohnsman expects other states to also ban the sale of new gas-powered vehicles over the next few years. That’s because 10-12 states — including Oregon, Washington, and New York — follow many of California’s automotive pollution rules.