CA’s Clean Car Rules Are Feasible but Can Go Further

On June 9, the California Air Resources Board (ARB) will have it’s first hearing on the proposed Advanced Clean Cars II rule (ACCII), which would set the state on a trajectory for 100% electric vehicle (EV) sales by 2035. The transportation sector accounts for more than 50% of the state’s greenhouse gas emissions and accelerating the transition to an electric vehicle future will be key to achieve the state’s climate and air quality goals.

Through these standards, ARB is formalizing Governor Newson’s Executive Order N-79-20, a groundbreaking directive towards 100% electrification of the transportation sector.

NRDC analysis shows that the sales targets are appropriate for the initial years of the program (which starts in vehicle model year 2026), but an even more aggressive 2030 target of 75% EV sales - versus the proposed 68% level - is achievable in California and supported by ARB staff analysis.

Advanced Clean Cars II Standards Are Necessary and Feasible

Vehicle demand is increasing

The current EV requirements level out after Model Year 2025 at about 7-8% sales. However, real world sales data shows that so far in 2022, California is already at about 16.32 percent ZEV sales (up from about 12 percent 2021).

Across the United States, EVs nearly doubled from 308,000 vehicles in 2020 to 608,000 in 2021.

And this trend has been consistent for the past few years: While overall auto sales fell by 14.6 percent in 2020 relative to 2019, EV sales only fell by 4.6 percent relative to EV sales in 2019. EV sales in January and February of 2021 resulted in all-time records for those months, exceeding the respective monthly totals from 2020 by 43 percent and 100 percent.

And these numbers are expected to grow– a 2020 survey by Consumer Reports shows that over 70% of participants indicated that they would consider buying an EV in the future. 

All of this indicates that while the market is performing higher than anticipated, there is still a major adjustment in sales targets needed to stimulate the ZEV market and ensure the state can achieve 100% ZEV sales by 2035 and support California’s climate goals and policy.

Electric vehicle charging infrastructure is increasing

With an increase in the number of electric vehicles on the road, California will need to ensure that there is sufficient charging infrastructure is available for drivers. NRDC analysis shows that  California has sufficient infrastructure funding available to meet the state’s 2025 EV goals, and if these trends continue—which we anticipate they will—the State will have enough infrastructure to support the 2030 EV targets.

The analysis revealed that investments from the state, the federal government, Low Carbon Fuel Standard, and electric utilities are currently projected to deliver $3.2 billion in support for charging infrastructure over the next five years in California. 

This could meet the state’s public, workplace, and shared multi-unit dwelling charging needs over the next five years based on a conservative estimate, provided that the Legislature passes the Governor’s ZEV investment proposal; the utilities implement their approved investments; federal funds are dispersed; and the Public Utilities Commission approves filings on Low Carbon Fuel Standard (LCFS), near-term priorities and Pacific Gas and Electric’s new proposal.

The grid can support the anticipated number of EVs

The costs of accommodating EV charging have been negligible to date and studies have shown that EVs are not crashing the electric grid. In 2017, the number of EVs in three of California’s utilities service territories (SDG&E, SCE, and PG&E) increased by more than 22%, but the number of needed upgrades to support these vehicles dropped to only 0.17% for a cost of $500,000. Put simply, very few EVs required any distribution system or service line upgrades.

This trend is expected to continue as more EVs are added onto California’s roads. A peer-reviewed study in California observed what would happen if all households in a residential region in North California were driving an electric vehicle.

The analysis found that if just 30% of EVs shift charging to off-peak times, only 15% of the feeders would need to be upgraded– showing that the state can achieve high EV penetration without major grid upgrades, so long as smart grid integration strategies are implemented, such as time-of-use rates and dynamic price signals, which all three of California’s large investor-owned-utilities already offer.

California should increase stringency to 75% by 2030

Based on NRDC analysis and recent actual ZEV sales, we project that in Model Year 2026, under a business-as-usual approach, about one third of car makers will have ZEV sales more than the 35% requirement, while the remaining car makers will fall short.

In future years, however, the requirement can and should be more aggressive. NRDC has recommended that the Model Year 2030 requirement be set at 75% (rather than 68%).

ARB estimates that in California, the current proposal will lead to 1,242 fewer deaths, 208 fewer hospitalizations for cardiovascular illness, 249 fewer hospital admissions for respiratory illness, and 639 fewer emergency room visits for asthma.  ARB estimates that this will result in $14.52 billion in health benefits. By increasing the stringency, these benefits will only increase.

Even a relatively small increase in ZEV sales has a significant cumulative greenhouse gas impact, and further reductions in PM 2.5 and NOx emissions will lead to improved public health.

California can increase the number of EVs placed in equity programs

As part of the regulatory package, ARB also has included provisions that encourage automakers to provide more EVs to state programs increasing access in communities historically over-burdened by pollution, such as the Clean Cars 4 All program that helps household replace highly pollution, old gasoline clunkers with either new or used EVs. ARB should work to increase the number of zero-emission vehicles made available by manufacturers in these access programs.

Next steps

These rules will not only have benefits for California, but since other states have the option of either adopting the federal standards or California’s stronger standards—as we recently saw in New Mexico—after the Board approves the regulations in August, states will be able to move forward with adoption of the rules as well, potentially more than tripling the emissions impacts of California’s rules.