The California New Car Dealers Association just reported their 2019 vehicle sales in California, and it’s bad news. First, total new vehicle registrations in the State came in at 1.89 million for 2019, and it’s the first time since 2014 that sales in California fell below 2 million. Second, for California’s efforts to reduce greenhouse gasses (GHGs), 2019 sales of zero-emission vehicles (ZEVs) came in at 7.6%. The report says that the numbers for the vehicles that count toward meeting the state’s ambitious clean energy transportation goals were down 12.37% in 2019 from 2018. Note: to qualify as a zero-emission vehicle, or ZEV, the vehicles must be all-electric, plug-in hybrids or hydrogen fuel cell vehicles.
The cooling sales numbers are part of a larger trend that affected the entire auto industry in 2019, with new vehicle registrations of all vehicles — internal combustion engine as well as electric and hybrids — dropping 5.5% from 2018, according to the report.
How Do the Tax Credits for ZEV’s Work? California offers rebates — with income restrictions — of $2,000 for electric vehicles, $1,000 for plug-in hybrids, and $4,500 for hydrogen fuel cell vehicles.
The federal government offers a tax credit of up to $7,500 for all-electric and plug-in hybrids, although once a carmaker sells 200,000 units, the amount is cut in half every six months until it disappears. The federal tax credit for Tesla, Chevrolet, and Cadillac has dropped to $1,875.
Adrian Moore, vice president of policy at the Los Angeles-based Reason Foundation, which advocates free-market economic policies, told the San Diego Union Tribune that he believes that the problem is California is running out of early adopters. Given the cost of the product, with an electric car versus internal combustion or hybrid. So it’s still a market for the wealthy and those in that class who can be enticed by incentives to buy an electric car in a market that has been saturated. Moore believes that the market needs to keep developing and bring the price and performance of electric cars down to the mass market. In fact, Moore believes that the subsidies which drove the market initially, have run their course.
In 2018, then-governor Jerry Brown set a goal to have 5 million ZEVs on California’s roads by 2030. As of last week, the California Department of Motor Vehicles counted 700,110 in the State.
California also aimed to have 250,000 charging stations across the State by 2025 (not counting chargers in homes, workplaces or multi-unit dwellings). So far, a little more than 24,000 charging outlets have been installed.
Consider one more set of numbers: According to the Phoenix Wealth and Affluent Monitor, California had the most millionaires in the United States in 2018 – 885,000. If each one of those households had purchased a ZEV, California would have more ZEVs on the roads than currently exist today.
So what will it take to make it to the 2030 goal of 5 million ZEVs? Assuming that the current sales numbers were maintained over the next 10 years, California would not reach even half of its intended goal.
The road to an all-electric transportation future is still filled with many potholes.
