Electric vehicle sales were on the rise this year even before the state’s decision to ban the sale of fuel-engine vehicles by 2035
VISALIA – Car sales may have slowed down in California this year but electric vehicles sales are revving up.
New vehicle registrations in California declined 17.9% during the first six months of this year versus last year, in line with the 18.3% drop in the Nation, according to the California New Car Dealers. As the vehicle market continues to navigate high demand, chip shortages, supply chain issues and production problems, the current economy could allow dealerships to help replenish their inventories as manufacturing of new vehicles is able to catch-up with demand.
“We are thankful California isn’t being hit as deeply as other regions in the nation across all vehicle registration sectors,” California New Car Dealers Association chairman John Oh said Oh is also general manager of Lexus of Westminster, Calif. “Additionally, we are seeing some increased interest in the electric vehicle market that are very promising.”
Sales of electric and hybrids accounted for three in 10 new car sales this year, with electric cars representing 15% of all new car sales through June. By comparison, the market share for alternative fuel vehicles was around 9% in 2017. Plug-in hybrids’ share of the market went from 1.9% of sales in 2020 to 3.3% last year as more carmakers offered the product. Now electric trucks are hitting the market and have been heavily advertised.
Tesla was one of only three automakers to post increased sales from the first half of 2021 to the same time period in 2022, along with other luxury brands Genesis and Maserati. The all-electric automaker topped the list for “near luxury,” “luxury/high-end sports cars,” “luxury compact SUV,” and “luxury mid-size SUV” in the first six months of this year. Some of that was fueled by record high gas prices in the wake of Russia’s invasion of Ukraine and economic sanctions imposed on Russia, one of the world’s top supplies of oil. Russia supplies 6% of America’s imported oil supply. In California, the trend was also car dealers expecting California to ban non-electric passenger vehicles in the near future.
Charging toward 2035
Less than a month after the California New Car Dealers Association released its data, the California Air Resources Board announced its rule banning fuel engine vehicles by 2035. The rule establishes a year-by-year roadmap so that by 2035 100% of new cars and light trucks sold in California will be zero-emission vehicles (ZEVs), including plug-in hybrid electric vehicles (PHEVs). Sales of new ZEVs and PHEVs will start with 35% in 2026, build to 68% in 2030, and reach 100% in 2035.
CARB says the “timeline is ambitious but achievable: by the time a child born this year is ready to enter middle school, only zero-emission vehicles or a limited number of plug-in hybrids (PHEVs) will be offered for sale new in California.”
By 2037, CARB claims the regulation delivers a 25% reduction in smog-causing pollution from light-duty vehicles to meet federal air quality standards. From 2026 through 2040, CARB estimates the regulation will result in cumulative avoided health impacts worth nearly $13 billion including 1,290 fewer cardiopulmonary deaths, 460 fewer hospital admissions for cardiovascular or respiratory illness, and 650 fewer emergency room visits for asthma. In 2040, greenhouse gas emissions from cars, pickups, and SUVs should be cut in half, reducing climate warming pollution from those vehicles by a total of 395 million metric tons.
“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,” CARB Chair Liane Randolph said. “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.”
In order to encourage more EV car sales, California is offering ongoing rebates to lower-income buyers. They include:
- Clean Cars 4 All provides up to $9,500 to low-income drivers who scrap their older vehicles and want to purchase something that runs cleaner.
- The Clean Vehicle Rebate Project (CVRP) provides up to $7,000 for income-qualified drivers to buy or lease a ZEV.
- The Clean Vehicle Assistance Program provides low-income car buyers with special financing and up to $5,000 in down-payment assistance.
The Governor’s ZEV budget includes $400 million over three years for the statewide expansion of Clean Cars 4 All and for a suite of clean transportation equity projects. The budget also includes $525 million for the Clean Vehicles Rebate Project (CVRP). In addition, there is $300 million for more charging infrastructure, especially for those consumers who may not have a garage where they can charge their EV.
CARB analysis indicates that battery-electric vehicles are likely to be priced closer to conventional vehicle prices by 2030. By 2035, consumers are likely to realize as much as $7,900 in maintenance and operational savings over the first 10 years of ownership. Owners will also see 10-year savings from 2026 model year battery-electric vehicles, though not quite as much.
In the past year, the average price for gasoline in California has climbed from $3.08 in January 2021 to $4.80 as of Feb 25, 2022, a jump of almost 40%. Californians are also using less gas than they used to pump. In 2015, the state recorded just over 15 billion gallons sold in California or about 4.4 million gallons a day, down from a high of 8 million gallons per day in 2006, according to the the Energy Information Agency. In 2021, the latest figures available, the state showed that number had fallen to 3.7 million gallons a day sold but still up from pandemic numbers in mid-2020 of 2.7 million gallons a day following the Governor’s stay at home order. Experts say this is in large part due to a shift to higher-mileage per gallon vehicles including the ramp-up of non-petroleum cars.
Not all electric vehicle companies are humming along. Greenpower Motor Company Inc., a Canadian electric bus maker manufacturing in Porterville, just reported their first quarter financials with a worse-than-estimated loss of $4.35 million.
The company – which fabricates multiple models of high-floor and low-floor vehicles, including transit buses, school buses, shuttles, and double deckers – reported higher revenue than a year ago but net income was down 92%. The NASDAQ reports Green Power’s 52-week stock price is down 72%. The company now has a manufacturing plant in West Virginia where they have proposed to add 900 jobs at the South Charleston WV facility. That would be a huge jump from company reports they have 62 employees in all locations.
GreenPower had promised to build a full blown factory in Porterville in 2015 but has yet to pull the trigger. They lease two production facilities in town and have bought a 9-acre parcel ready for a factory. They do assemble electric vans in Porterville. But now it appears their emphasis on manufacturing has led elsewhere.