impossible!
That's what Jack Hollis, Toyota North America's chief operating officer, calls the requirement in California and 16 other states that 35% of 2026 model year vehicles be zero-emission or electric vehicles.
California also added a 68 cents per gallon tax that goes into effect at the beginning of the year. The state is making gasoline and hybrid cars unaffordable.
“I've never seen anyone, government or private, project that that number is achievable. Right now, it looks impossible,” Hollis said.
He continued, “The demand is not there. It would limit the choice of vehicles that customers want.”
Welcome to the party. This is what we've been saying for years.
Stellantis, the automaker that owns Jeep, certainly agrees. Stellantis has made its gas-powered, non-hybrid Jeep available only as a special order vehicle in California and other states that have adopted California Air Resources Board standards.
This was a blow to Stellantis, which announced last week that it would lay off 1,100 UAW-representative employees at its Toledo, Ohio, south assembly plant. This is where the company built the Jeep Gladiator.
Under California's Advanced Clean Car Regulations, automakers must sell enough vehicles or earn enough credits equal to 35% of vehicles sold in California to qualify as zero-emission vehicles. must be purchased.
Moreover, only 20% of them can be plug-in hybrids. The remaining 15% must be all-electric.
Automakers will have to pay a $20,000 penalty for each ZEV credit they lack, and automakers will have to use the excess credits to buy credits from other automakers or sell fewer non-ZE vehicles. Become. That means the car will cost more.
The Advanced Clean Cars mandate applies to Massachusetts, New York, Oregon, Vermont, and Washington for the 2026 model year and to Colorado, Delaware, Maryland, New Jersey, New Mexico, Rhode Island, and Washington DC for the 2027 model year. Masu.
As we often point out, automakers don't build cars for specific states, so expect prices to rise in all 50 states.
And why is there no demand there? One of the blows to EVs in California is high electricity costs.
California's energy prices are so high that the California Air Resources Board says California is nearing a point where it will be cheaper to run a car on gasoline than electricity. CARB voted last week to create $105 billion in credits for EV charger operators, to be paid for with increased carbon emissions fees for oil refineries that produce gasoline and diesel. . CARB estimates that this measure will result in a gasoline pass-through cost of 47 cents per gallon in 2025.
California also added a 68 cents per gallon tax that goes into effect at the beginning of the year. The state is making gasoline and hybrid cars unaffordable.
The state expects CARB's new low-carbon fuel standard to increase gas prices and electric vehicle charging subsidies to encourage more Californians to ditch gasoline-powered cars and buy electric vehicles or take public transit. I believe that we can encourage them to do so.
What it actually accomplishes is infuriate California drivers. I expect it will work just as well in other states that are foolish enough to try it.
California was able to meet its own emissions standards through a waiver from the Environmental Protection Agency, first granted in the late 20th century to address Los Angeles' smog problem.
The Obama administration ordered California's exemption expanded to include emissions as well as pollution. In 2019, the Trump administration revoked California's EPA waiver, but the action was held up in court until the Biden administration reinstated the waiver in 2021.
When the second Trump administration takes office in January, it is likely to revoke California's EPA exemption, which, if upheld in court, would invalidate many of the emissions programs created by California and later by other states. It will become.
We will continue to monitor and report on developments in this situation.
