On August 25, 2022, the California State Legislature, in collaboration with the California Air Resources Board (CARB), voted to adopt the Advanced Clean Cars ll proposal into law. The regulation, which is only one part of the multi-layered environmental proposal, aims to fully phase out the overall sale and usage of conventional gas-powered vehicles by 2035 while serving as a complex follow-up to last year’s ambitious zero-emission vehicle (ZEV) regulation.
California, home to the largest automotive market in the U.S., accounts for about 11% of the nation’s total new vehicle sales per year and, in many ways, has catalyzed the rise in popularity of the ZEV movement. In the first half of 2022, ZEVs were responsible for 16.5% of new car sales in the state, a sizeable jump up from 12.4% in 2021 that caught the attention of state lawmakers. Due to ongoing public demand for ZEVs, the regulation will also alter expectations for automotive manufacturers and dealerships by increasing the required ZEV sales they must deliver per year.
This figure will only continue to increase yearly beginning in 2026, starting at 35% and moving to 68% in 2030 and 100% in 2035. California’s new regulations around ZEVs are likely to have far-reaching effects, as other border states historically have followed the Golden State’s lead when mapping out emissions standards.
While announcing the regulations passed, CARB Chair Liane Randolph stated: “Once again, California is leading the nation and the world with a regulation that sets ambitious but achievable targets for ZEV sales. Rapidly accelerating the number of ZEVs on our roads and highways will deliver substantial emission and pollution reductions to all Californians, especially for those who live near roadways and suffer from persistent air pollution. The regulation includes ground-breaking strategies to bring ZEVs to more communities and is supported by the Governor’s ZEV budget, which provides incentives to make ZEVs available to the widest number of economic groups in California, including low- and moderate-income consumers.”
The announcement of California’s regulatory changes joined with the state’s new ZEV Market Development Strategy, is expected to invest an estimated $6 billion in funds to bolster ZEV awareness statewide over the next five years. This will make California the first legal jurisdiction in the country to independently build an environmental roadmap free from the Clean Air Act (CAA) and EPA enforcement. From here, CARB will submit the newly passed regulations to the California Office of Administrative Law (OAL) for final review and approval before seeking out a waiver from EPA, the final step required to guarantee the regulations meet federal and National Ambient Air Quality Standards (NAAQS).
These new regulations were voted in only a couple of weeks after Congress passed the Inflation Reduction Act, which will provide $370 billion in energy and climate investments for the next 10 years. Legal experts anticipate that upwards of 17 states, including Massachusetts and Virginia, could soon follow in California’s legislative footsteps and independently adopt emission-based regulations through their state-level processes.