California’s Ambitious EV Goals Face Challenges Amid Sales Slowdown
California’s ambitious goal to transition entirely to electric vehicles (EVs) by 2035 is facing significant hurdles as EV sales growth slows and potential policy shifts loom. The state’s push, led by Governor Gavin Newsom, requires that 35% of new vehicles sold next year be zero-emission, up from the current 26.4%. However, this 33% increase in sales may prove difficult to achieve.
High prices and unreliable charging infrastructure are deterring buyers, and the situation could worsen if President-elect Donald Trump proceeds with plans to eliminate federal EV tax credits and impose tariffs on cars made in Mexico, which would drive costs higher. Jack Hollis, Toyota North America’s COO, expressed skepticism, stating, “I have not seen a forecast by anyone that that number is achievable. Demand is not there.”
State officials, acknowledging the challenge, have adjusted their messaging. Dave Clegern from the California Air Resources Board said, “We never expected a perfectly shaped curve over time. The 35% is an ideal number.” This marks a shift from previous documents that labeled the percentage targets as “requirements.”
The state’s calculation method for sales targets adds complexity. The 35% target applies to model year 2026 but is based on an average of sales from 2022 to 2024, rather than current sales. This allows automakers some leeway, potentially easing the path to meeting the target.
Despite these calculations, meeting the 100% zero-emission target by 2035 is uncertain, particularly with potential new tariffs impacting affordable imports, including low-cost Chinese EVs. California’s mandate also influences other states, with eleven adopting similar standards, creating a dual regulatory environment alongside a federal technology-neutral standard.
The Alliance for Automotive Innovation has highlighted the lack of charging infrastructure outside California, stating that achieving the mandate “will take a miracle.” Meanwhile, the advocacy group Veloz remains optimistic, likening the transition to “graduating from high school” with necessary investments and education.
To counter federal policy changes, Governor Newsom has suggested state rebates for EV purchases, potentially funded by California’s Greenhouse Gas Reduction Fund, though legislative approval would be needed. Newsom’s proposal also hints at promoting competition, possibly excluding Tesla from benefits.
While Tesla leads EV sales in California, overall growth is flattening. From January to September 2024, ZEV sales barely rose, with less than 1% growth over the previous year. Similar trends are seen nationwide, with a mere 1.3% increase in September.
Automakers, many of whom currently lose money on EVs, must scale up production for profitability. Despite investments totaling hundreds of billions globally, many companies are retreating from aggressive EV targets. Ford, GM, and Volvo have adjusted their goals, and startups like Fisker, Rivian, and Lucid face financial difficulties.
High vehicle prices and interest rates are affecting overall sales, and failing to meet California’s mandate could incur additional costs for automakers needing to purchase clean air credits, with Tesla as a likely seller.
Potential tariffs from Trump, who brands himself the “tariff man,” could further complicate matters by affecting cost-effective imports from Mexico and Canada. Automakers like General Motors and Ford, who have invested in EV factories in Mexico, may see cost savings negated, adding to the challenges of meeting California’s EV objectives.
Original Story at www.latimes.com