California’s New Climate Legislation: What Does it Mean for Electric Cars?

September 2, 2016
David Reichmuth
Senior Engineer, Clean Transportation Program

California wrapped up its 2016 legislative session on August 31 with several decisions that could have important impacts on the adoption of electric vehicles (EVs) in the state. Policy decisions made in Sacramento often have outsized effects on the nation’s adoption of EVs, both because the state is the US leader in EV sales and also because California directly influences clean air laws in other states via rules like the Zero Emission Vehicle regulation.

Lots of EVs are needed to meet the state’s 2030 climate emission target

The highest profile environmental legislation to pass the legislature this year in California was Senate Bill 32. The key provision of SB32 directs the state’s Air Resources Board to put California on track to reduce heat-trapping emissions to 40 percent below 1990 levels by 2030. Because transportation is the largest source of emissions, this will require the state to not only continue its programs to switch from petroleum to electricity for our cars, trucks, and buses, but to accelerate the transition. In order to meet this 2030 target, the state will likely need to have EVs make up around 30% of new car sales by 2030 and have about 4.2 million EVs on the road by then.

In the case of personal transportation, this will mean improving the state’s Zero Emission Vehicle (ZEV) regulation. The regulation has been a success with over 65% of EVs last year sold in a ZEV state and more than 200,000 EVs sold in California to date. The most recent changes to the ZEV rule were adopted in 2012 and were predicted to lead to 15% of all new cars being plug-in hybrids, battery electric or fuel cell electric vehicles by 2025. Ironically, we now know that we’ll fall well short of that target because EV technologies have advanced faster than the ZEV regulation anticipated. The regulation is based in part on electric range, so today’s longer range EVs effectively mean fewer EVs are needed to meet the standard. We also know that the ZEV regulation has been critical to making sure that automakers bring EVs to market and make them available. UCS’s recent report on progress in the EV market shows that California is far ahead of the rest of the country in both EV models and number of EVs available for sale.

Continued funding to support EV adoption

One critical piece of legislation to pass in the waning hours of the session was the allocation of funds from the Greenhouse Gas Reduction Fund (GGRF). The fund is the result of proceeds from California’s “cap and trade” program that requires those responsible for heat-trapping emissions to purchase permits to cover their contributions to climate change. The legislature and Governor Brown agreed to allocate over $365 million from the GGRF to support transportation-related programs to reduce emissions and air pollution, including $133 million to support rebates for buying or leasing an EV. In approving the funding, the Legislature also made some noteworthy changes to the EV rebates:

What does all this mean for EVs, both in California and the US? First, California will remain a leader in EV adoption with both incentives and regulations driving EV sales up. Nine other states (Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont) have also adopted California’s ZEV regulation and should see similar increases in sales of electric vehicles. These 10 states make up about a quarter of the nation’s cars and trucks so even if many states aren’t part of the ZEV regulation, there should be spillover effects that increase the number of EV models available nationwide. This wide-scale adoption of EVs is important to reach both oil use and emissions reduction goals, but California needs to keep showing aggressive leadership to make this happen. That’s why what happened at the end of August in California is important not just for one state, but also for the whole country.