Electric cars’ 2035 mandate ‘challenging’

Is California’s effort to mostly ban the sale of new gasoline-powered cars by 2035 actually workable?

Among the unknowns: Whether enough consumers will adopt electric vehicles in sufficient numbers, and whether the market for electric vehicles will evolve to meet the mandate in the next decade and beyond.

Currently, “it’s 100% clear that supply is the issue, not demand,” said Gil Tal, director of the Plug-in Hybrid and Electric Vehicle Research Center at University of California Davis.

“The reason (automakers) were not making

these cars is not because consumers will not embrace it, but because they know how to make money on gasoline cars,” Tal said. “And for them, this change is risky … except for car companies that had nothing to lose like Tesla.”

“So if it was up to (automakers), doesn’t matter if people want it or not, they would not make it without the government pushing them, and that’s what California is doing,” Tal said.

The new rules, approved last week by the California Air Resources Board, aim to gradually phase out new gas-powered cars sold in the largest vehicle market in the United States. Thirty-five percent of new vehicles sold in 2026 need to be fully electric or hybrid, up from about 16% currently. That target rises to 68% in 2030 and 100% by 2035. Automakers that fail to comply incur a penalty of up to $20,000 per non-compliant vehicle sold.

It’s not a total emissions ban: 20% of new vehicles sold in 2035 can still be plug-in hybrids, which use both gasoline and electricity. That, along with the fact that the regulations only apply to sales of new vehicles, means “it’s going to take many, many years before gas cars disappear,” Tal said.

Still, the 2035 mandate is ambitious, requiring substantial investment in supporting infrastructure. For one, an additional 3.2 million chargers would need to be installed by 2035, according to a May paper published by Tal and his colleagues. California also needs to ensure that its grid can handle the influx of charging cars, including during extreme weather events such as the upcoming west-wide heat wave.

For now, one of the main challenges in the market is leveling supply with demand. Supply chain disruptions and shortages, particularly in key battery materials such as lithium, hamper electric vehicle availability even as automakers rapidly work to scale up electric vehicle production.

These and other considerations make the 2035 mandate “extremely challenging,” said John Bozella, president and CEO of the Alliance for Automotive Innovation in an Aug. 25 statement.

“Whether or not these requirements are realistic or achievable is directly linked to external factors like inflation, charging and fuel infrastructure, supply chains, labor, critical mineral availability and pricing, and the ongoing semiconductor shortage,” Bozella said. “These are complex, intertwined and global issues well beyond the control of either CARB or the auto industry.”

Supply issues might take a few years to untangle, though it’s “starting to catch up already,” Tal said.

“The supply (of electric cars) will go first to California and the states that follow California (on mandates), and only then to the other ones, and they’re the ones that will still have supply limitations for I think, five to seven years from now,” Tal said.

For potential buyers, this has led to high prices on already-expensive electric vehicles and long waits to receive them.

“It’s creating a lot of

frustration with consumers,” said Chris Gross, founder and CEO of BuySide Auto, an automotive broker for new cars based in San Francisco serving customers across California.

Even still, interest in all-electric, hybrid and plug-in hybrid vehicles remains high. In California, 74% of drivers report having “at least some interest” in the electric vehicle market, and 40% are considering electric for their next vehicle, according to an April report from the California Air Resources Board.

But there’s a difference between demand outstripping supply in the present moment and wholehearted mainstream adoption of new electric vehicles by 2035. Consumers interested in electric vehicles have a number of unique considerations: Where do I fuel it? How far can it go? Can I readily find maintenance service if there are issues?

For many buyers, salespeople at car dealerships will be key to answering what it means to go electric, said Brian Maas, president of the California New Car Dealers Association.

“This transition cannot occur successfully without franchise dealers helping to push mass market consumers to buy these vehicles,” Maas said. “So we’re all in on the front end, and we’re essential to make it happen.”

In five years, there will be enough electric vehicles on the road for this information to be common knowledge, Tal predicted.

“Between 2025 and 2030, we will have enough (electric) cars around us to understand where the market goes,” Tal said. “People will not be like today, where many people don’t know if the electric car is for real.”

There’s also the concern that electric vehicles will remain out of reach for the average consumer. The average new electric vehicle costs over $64,000, compared to about $47,000 for the average new vehicle, according to a June report from Kelley Blue Book. State funding to help lower-income consumers purchase electric cars has been insufficient, CalMatters reported recently.

Over time, the price of electric vehicles should come down as more supply of electric vehicles becomes available, Gross said. This requires both more manufacturers to produce them as well as more suppliers to provide the components that go into battery production.

Repeat electric car buyers also are needed in order for electric cars to succeed on the behavior side, Tal said, because they will supply electric vehicles into the more affordable used car market. About 70% of cars sold each year are used, according to Statista data. “The 30% who buy new cars are the guys who make the (used car) market,” Tal said. “If they like EVs, we will see EVs. If they like red cars, we will all drive red cars.”

In the short-term, Gross doesn’t see any indication that electric vehicle supply is going to improve.

“It’s not going to be easy, but the manufacturers will figure it out, because the California market is so large and so important to them,” Gross said.