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)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.
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.
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.
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.
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.
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.
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 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.
There is going to be a major shortage of ICE vehicles leading up to 2035.
In the last two years, according to my insurance company, their valuation of my 63 Impala has shot up $6000. That’s just their computation of the coverage I should carry; which is related to, but not a dollar-for-dollar match for, how much I could get if I were to sell it.
Google “Golgafrinchans” and read up on how they dealt with their middlemen problem. Here’s a bit to get you off to a good start:
https://hitchhikers.fandom.com/wiki/Golgafrinchans
I think it will be a pool of idiots after saner people flee.
The intent is to ban any type of hydrocarbon powered vehicle. Californication already has some ban on diesel powered trucks which escalates to a complete ban in the near future. This is already adding greatly to the cost of goods received at the CA seaports. At first I thought that this would be an opportunity for OR and WA to capture much of the CA seaport traffic as they don’t have ICE restrictions ... yet.
The article cites that OR and WA may be adopting the CA restrictions. This will drive up the cost of goods received at any west coast seaport. It will soon be cheaper to make port in Mexico and truck cargo through to Texas.
These evil politicians are killing America, our very own people are killing us
A horse ranch sounds fun.
What I have noticed here is that the used car prices for a normal vehicle have gotten rather outrageous, but it’s value as a trade-in has dropped. I have an ‘05 Buick that I’ll keep as long as I can. If anyone is going to take a beating on prices, I’ll do the best I can to see that it is the dealer, not me.
This particular car has collector value, so will keep going up in price. You should be able to make a tidy profit on it if you’ve had it awhile & can keep it in good condition. Whether or not you come out ahead depends on what you buy to replace it.
The catch with all this is the upgrade of electrical facilities to handle all the expected EVs. Based on what I see there is already a huge problem I can only imagine will get worse. Think the government cares? I am see seeing no real signs of that. All things considered, I think everyone will be better off if there are no EVs. Of course, there will always be those who think they are really worthwhile. The question is...is there enough demand to make continued production of them worth the effort? Keep in mind that many of them won’t be worth salvage when they get older & hit the used car markets. Buying a used EV will become a real risky idea.
Business and political fads have consequences. As pointed out in Charles Mackay’s appropriately titled book “Extraordinary Popular Delusions And The Madness of Crowds.
A friend has his stolen. In demand for low riders
That ‘05 Buick the entire front clip with the motor/transaxle cradle, steering and driveline is a separable and very rebuildable module with common parts shared across many years and production units. You oughta be able to source parts enough to keep that car on the road until you flat don’t need one, anymore.
If we just had a Law mandating ALL Public Employee’s and Officers of the Court were PROHIBITED from using, owning or possessing an ICE powered vehicle for any reason, all the problems of EV’s would be fixed.
Trillions would need to be spent just for the chargers at this rate...!
$2 Billion in Subsidies, Only 2 EV Stations Opened, the Holdup is Social Justice
https://mishtalk.com/economics/2-billion-in-subsidies-only-2-ev-stations-opened-the-holdup-is-social-justice/
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