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The Economic Results Of California Banning Gas Vehicles
Epoch Times ^ | 01/19/2024 | Anne Johnson

Posted on 01/19/2024 9:39:05 PM PST by SeekAndFind

As a result of California Governor Gavin Newsom’s executive order, gas-powered vehicles will be banned by 2035. This refers to new vehicles and existing gas-powered cars and trucks that will be allowed on California roads for the moment.

Other states are following California. But with electric vehicles (EVs) comes an investment. What are the economic ramifications of banning gas-powered vehicles? Can California afford it? Can America afford it?

(Shutterstock)

California Banns New Gas-Powered Vehicles 2035

Gov. Newsom’s executive order was announced in 2020 and was followed by the California Air Resources Board’s approval in August 2022. Automakers and car dealers will be restricted to selling only cars, SUVs, and pickup trucks that generate zero tailpipe emissions by 2035.

To prepare for this, California’s Advanced Clean Cars II rule requires 35 percent of new cars and light trucks to have zero emissions by 2026. Sixty-eight percent must reach that goal by 2030.

Power Grids and Demand

There are ramifications to the gas-powered ban. One of these is the need to upgrade the power grid.

In the past, California residents have been plagued with planned rolling blackouts. Some of these were designed to cut the risk of wildfires. In high-risk areas, electric utilities are often preemptively shut off during windstorms, but many blackouts resulted from the strain on the power grid. Residents were asked to conserve energy.

California has experienced more outages in the last five years than any other state except Texas. On average, a California blackout lasted roughly 10 hours, with the longest lasting two and a half days.

Electric vehicles are dependent on the grid. If the power goes out, so does the car.

Cost of Upgrading California Power Grid

Preventative fire measures aside, California’s power grid will need to be upgraded to handle the increase in EV usage.

In 2021, analytics firm Kevala conducted a study for the California Public Advocates Office. Kevala found that without load management of other mitigation measures, system-level peak load would increase as much as 56 percent between 2025 and 2035.

This increase would mainly be due to EVs. Kevala estimated that upgrading the grid would cost $50 billion.

However, the California Public Advocates Office created a different number using a different model. They estimated the usage based on the addresses of all vehicles in California to predict where EV increased usage would likely occur. They then modeled the expected charging load.

The Public Advocates Office estimated the figure was $15–20 billion. But as a caveat, they said, “No single study or pair of studies, particularly this early in the electrification process, can definitively answer such a complex question as what the costs of distribution grid upgrades will be.”

The bottom line is that billions of dollars will need to be invested to upgrade the power grid to handle the additional strain of EVs.

Lack of Charging Stations

In 2022, at 14.3 million, California had more registered automobiles than any state nationwide. The overall number of registered motor vehicles was nearly 31.4 million. California also has the most new car sales. In 2022, new car sales amounted to $1,667,831 worth of vehicles.

With those million-plus potential EV sales, the need for charging stations will soar. Currently, there are approximately 51,000 public charging stations across the nation. As of March 2023, California has the most, with 14,040.

A report by the California Energy Commission shows that California needs 1.2 million electric vehicle chargers by 2030. This doesn’t take into the account the additional 157,000 chargers needed by 2030 for medium, heavy-duty and electric buses.

There are three types of chargers, and their cost ranges from $1,500 to $20,000. But that’s just for the equipment. There’s also the installation cost.

Regardless of which type of equipment is chosen, the installation can cost $100,000 to $200,000. These high-voltage items must have specialized electricians and laborers to install them.

Splitting the difference with $150,000 per charger, it would take roughly $180 billion to build the 1.2 million chargers needed to accommodate the 2035 mandate.

Banning Gas-Powered Vehicles Tax Revenue

With electric vehicles comes a decrease in gas consumption. Fuel taxes are a significant contributor to state transportation funds. It contributes 40 percent of funding. The majority of funding could disappear in the coming decades.

To replace lost revenue, many states have added fees to EV owners. California charges $100 annually for a zero-emissions vehicle. As of January 2021, this fee was indexed to the Consumer Price Index.

Economic Hardship on Middle and Lower Classes

The average EV costs $66,000. The Inflation Reduction Act EV tax credit of $7,500 can be written off when filing income taxes, but the consumer must still make the initial downpayment and finance. This could give them a hefty car payment, which not many may be able to afford.

In California, low-income individuals could be eligible for $9,500 in grants or rebates. If you take both discounts, it comes to a $49,000 vehicle. That’s still a big-ticket item for most middle to low-income Californians.

The high cost is because batteries are more expensive than internal combustion engines—a lithium battery for an EV costs between $5,000 and $20,000. And batteries are easy to damage and difficult to repair.

States Banning Gas Vehicles

But California isn’t the only state with this on its agenda. Nine states have also announced a restriction on new gas-powered vehicle sales. These states are:

These states eight states are following the Advance Clean Cars II.

In 2022, the ninth state, Vermont, lawmakers required zero-emissions by 2030.

California and EV Economics

California is currently facing a $68 billion dollar deficit. Its debt for 2022 was $145.03 billion. That compares to the 2000 debt of $57.17.

Chris Hoene, head of the California Budget and Policy Center, blamed climate change for the state’s shortfall. This was because the state’s fires interfered with cash.

The goal with California is to reduce emissions to help prevent these climate issues.

However, the cost of converting the most populated state to EVs may not be feasible. Billions of dollars must be invested to upgrade the power grid and build chargers.

Manufacturers will need to drastically reduce prices to make it possible for middle America to afford EVs.

The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.


TOPICS: Business/Economy; Culture/Society; News/Current Events; US: California
KEYWORDS: california; clonk; commerce; despotism; economy; electricity; ev; gas; infrastructure; transportation; travel; tyranny
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1 posted on 01/19/2024 9:39:05 PM PST by SeekAndFind
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To: SeekAndFind

People, you’re missing the point. The government wants control. If you can no longer travel, that’s a feature, not a bug.


2 posted on 01/19/2024 9:42:20 PM PST by HIDEK6 (God bless Donald Trump. )
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To: SeekAndFind

By 2045 Califagifornia will have a population of 10 million


3 posted on 01/19/2024 9:43:03 PM PST by Fai Mao (Starve the Beast and steal its food.)
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To: SeekAndFind

No nukes = no upgraded grid = live in hovels in your “walkable cities” PEASANTS!


4 posted on 01/19/2024 9:52:33 PM PST by lightman (I am a binary Trinitarian. Deal with it!)
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To: SeekAndFind

The only way out of this mess is for the Federal government to mandate the production of EVs, to control their prices, to mandate installation of massive solar and wind power, and to rebuild the nation’s electrical grid. In six years.


5 posted on 01/19/2024 9:53:57 PM PST by Jeff Chandler (THE ISSUE IS NEVER THE ISSUE. THE REVOLUTION IS THE ISSUE.)
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To: SeekAndFind

What about increased costs due to loss of economy of scale in oil production? Petroleum will still be needed for some things.


6 posted on 01/19/2024 9:53:59 PM PST by KrisKrinkle (c)
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To: SeekAndFind
Cloward and Piven
7 posted on 01/19/2024 9:54:06 PM PST by Nateman (If the Pedo Profit Mad Moe (pig pee upon him!) was not the Antichrist then he comes in second.)
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To: Fai Mao
By 2045 Califagifornia will have a population of 10 million

So gift it to the ChiComs and Cartels already. /s. Or maybe not /s.

8 posted on 01/19/2024 9:54:29 PM PST by lightman (I am a binary Trinitarian. Deal with it!)
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To: SeekAndFind
The executive order will not prevent Californians from owning gasoline-powered cars or selling them on the used car market.

Used ICE vehicles will become valuable in California.

9 posted on 01/19/2024 9:58:15 PM PST by MinorityRepublican
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To: lightman

At some point, it will become sane again after the idiots disperse to other places.


10 posted on 01/19/2024 9:58:22 PM PST by Fai Mao (Starve the Beast and steal its food.)
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To: Jeff Chandler
..The only way out of this mess is ..

Mandating electric vehicles is not a way out , it is digging the hole deeper. If electric cars had been a good idea the market would have adapted them decades ago. It is only because of Government meddling that they have gone anywhere at all.

11 posted on 01/19/2024 9:58:35 PM PST by Nateman (If the Pedo Profit Mad Moe (pig pee upon him!) was not the Antichrist then he comes in second.)
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To: MinorityRepublican

ICE car dealers in Las Vegas, Reno, Carson City, etc. become “more valuable” too! ;-)


12 posted on 01/19/2024 10:04:06 PM PST by Drago
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To: Fai Mao
At some point, it will become sane again after the idiots disperse to other places.

At some point, it will become sane again after the idiots disperse to other places PLANETS.

Improved.

13 posted on 01/19/2024 10:04:12 PM PST by lightman (I am a binary Trinitarian. Deal with it!)
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To: MinorityRepublican

In France what they did was to retroactively make older cars have to comply with emissions standards that they were never designed for even when new.

Then they couldn’t be licensed if one lived in “low emissions” areas.

Moves like that is where the yellow vests movement came from.

Or CA could use extremely rigorous “safety” inspections to force older cars off the road. That is what is done in many countries to limit vehicle ownership.


14 posted on 01/19/2024 10:16:46 PM PST by Reverend Wright ( Everything touched by progressives, dies !)
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To: lightman

;)


15 posted on 01/19/2024 10:36:26 PM PST by Fai Mao (Starve the Beast and steal its food.)
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To: Jeff Chandler

No. The only way out of this mess is for the Federal government to CANCEL all the climate and zero-emissions madness.


16 posted on 01/19/2024 10:43:42 PM PST by ProtectOurFreedom (“Occupy your mind with good thoughts or your enemy will fill them with bad ones.” ~ Thomas More)
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To: SeekAndFind

CONTROL - First, last, and always - CONTROL

The Soviet Union had an internal passport system. Driving, trains, busses, bicycles, and even walking. In order to travel outside of your small county, you needed your ‘papers.’

The dirty BIG secret was they did not issue passports to over 80% of the populace. If you were fortunate enough to have the internal passport, you could lose it for the slightest infraction, or for no infraction at all.

Many democRATS envied the Soviet control. Some of those same RATS now envy the Chicoms and their iron fist.


17 posted on 01/19/2024 10:50:07 PM PST by Ronaldus Magnus III (Do, or do not, there is no try)
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To: SeekAndFind

My Yukon XL started and ran with no issues when it was 24 below just recently.


18 posted on 01/19/2024 10:53:36 PM PST by Noumenon (You're not voting your way out of this. KTF)
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To: Jeff Chandler

ha

that there is funny

the only way out of this govt made mess is to get the govt out of it


19 posted on 01/20/2024 12:23:44 AM PST by joshua c
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To: SeekAndFind

Wonder what people in 2035 will tell Nuisance what he can do with his executive order?


20 posted on 01/20/2024 1:09:10 AM PST by Bonemaker (invictus maneo)
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