Framing the Future – Bans on New Gasoline-powered Vehicle Sales, Turning Mandates Into Opportunities

California and other states are continuing their efforts to transition away from fossil fuels as is evidenced by a sweeping new California state law.

The California Air Resources Board (CARB), consistent with the Advanced Clean Cars II program and ZEV Market Development Strategy, approved the Advanced Clean Cars II rule on August 25, 2022 that will require:

  • 35% of new cars and light-duty trucks sold in the state to be Zero-Emission Vehicles (ZEVs) (and a limited number of plug-in hybrid electric vehicles (PHEVs)) by 2026
  • 68% of new cars and light-duty trucks in state sales to be ZEVs by 2030
  • 100% of new cars and light-duty trucks in-state sales to be ZEVs by 2035
  • 100% of off-road vehicles and equipment to be zero-emission by 2035
  • 100% of medium- and heavy-duty vehicles in-state sales to be ZEVs by 2045

CARB’s actions are based on the Governor’s 2020 Executive Order N-79-20 (Sept. 23, 2020) that charged CARB with crafting regulations to lead to these ZEV mandates.  California asserts these changes with the transportation sector, which it says is the largest source and makes up more than half of greenhouse gas (GHG) emissions in the state, will help it reach its goal of carbon neutrality by 2045. CARB asserts that the new regulations will decrease vehicle GHG emissions by more than 50% by 2040 and vehicle smog-forming emissions by more than 25% by 2037. 

The regulation includes enhanced durability and warranty mandates, including requiring 2026 through 2029 model year vehicles maintain at least 70% of electric range for 10 years or 150,000 miles, individual vehicle battery packs maintain 70% of their energy for eight years or 100,000 miles for model years 2026 through 2029, with the percentages continuing to increase thereafter.

The final regulation also will expand ZEV deployment in environmental justice (EJ) and otherwise historically disadvantaged communities.  The regulations will include greater incentives for automakers that increase access to ZEVs by low-income households and people living in disadvantaged communities.

Washington and Oregon also have announced similar plans.  Washington has enacted requirements related to ZEV new car sales and adopting California vehicle emission standards. Oregon has a draft rule to develop its own Advanced Clean Cars II regulation.  Finally, many additional states have adopted Low-Emission Vehicle criteria pollutant and GHG emission regulations and ZEV regulations. These states represent approximately 40% of the county’s new car sales so the impact of these new regulations is likely to stretch well beyond California in the coming months and years.

At the federal level, more stringent emissions and fuel economy standards for light-duty cars and trucks through the 2026 model were finalized in December 2021 and became effective on Feb. 28, 2022.

The opportunities and options related to electrification of infrastructure, electric vehicles and batteries, electric vehicle charging stations and electric vehicle supply equipment continue to dominate planning and implementation strategies for companies, universities, agencies, municipalities, communities, and individuals.  Plunkett Cooney’s attorneys  are happy to engage and assist on strategies and implementation in many areas, including environmental and energy, government relations, and business and real estate transactions.

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