The goal of California is to get to time when every new vehicle sold in the state is one that produces zero emissions. This means more EVs and more hybrids need to be purchased to make this happen. Right now new legislation is being proposed to require a minimum of 15 percent of the new vehicles sold in the state be an emissions-free model within the next ten years. This legislation suggests that automakers that are unable to meet the goals will have to pay a penalty to the state or make payments to competitors who met the goals.
The goal to create a cleaner environment is one that is certainly admirable, but with gas prices falling at record rates it’s becoming more difficult to convince a customer to purchase an EV or hybrid model. Since these vehicles don’t have the range of a gasoline powered vehicle and take much longer to charge than it does to fill up a gas tank sales are challenging for any automaker. The hope of the California legislature is to create competition among the brand to ensure dealerships are pushing the zero emissions models to their customers looking for a new vehicle.
The credits given to automakers to sell EV models have hit a wall that was somewhat unexpected, but also welcome. The longer range EV models receive extra credits over those with shorter ranges and many automakers have begun to stockpile the credits to use in the future which will reduce the incentive they have to sell electric vehicles at prices that are considered to be affordable. This has become a challenge for the state and is expected to prevent California from meeting the goals set forth for the reduction of greenhouse gases, but with added pressure improvements could easily continue.
One automaker that is positioned perfectly for these new regulations is Tesla. Because 100 percent of their sales are EV models that have zero emissions and their vehicles tend to have the longest ranges they stand to receive the most credit, although they haven’t ever made a full year profit. Tesla is expected to have a new line of production vehicles, the Model 3, offered as an affordable EV in the upcoming years to help boost their sales and increase the number of EV models sold in California by a significant number.
The goals set forth in 2012 called for 1.5 million zero-emissions vehicles to be sold by 2025 and at this point only 192,000 have been sold since 2010. Of course this number should increase significantly if Tesla is successful with the Model 3 and other automakers feel the pressure to increase their sales of these vehicles well beyond what they currently sell. In addition to lower emissions with these vehicles dealers can offer the incentives of tax credits and access to restricted highway lanes to help increase the demand and desire for vehicles that are made to help clean up the air in California. If successful with these changes, you can expect other states will follow the lead of California to create cleaner air and lower emissions.
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