California's new gas ban is forcing automakers to face reality

AAutomakers like GM and Ford raved about electric vehicles (EVs) at the Detroit Auto Show in January 2018, with plans to invest billions of dollars in producing zero-emission cars. Fiat Chrysler, on the other hand, has signaled that it will delay the transition. “I do not know about [business] it means making money selling electric vehicles unless you sell them at the very, very high end of the spectrum,” Sergio Marchionne, the company’s CEO at the time, told those present at a news conference, according to The Detroit News. Instead of investing money in a rapid electric transition, he said, Fiat Chrysler will remain “technology neutral.”

Marchionne died later that year, and the company – now renamed Stellantis – eventually turned to electric cars, releasing new commitments to electrification and concept cars. But with California’s move this week to quickly end sales of new gasoline cars in the coming years and ban them by 2035, the earlier delay in business may have cost them, especially when it comes to meeting short-term sales targets of at least 35% zero emission vehicles in the state by 2026.

California is the largest auto market in the US, and more than a dozen other states tend to set their own emissions rules beyond California’s standard. And despite recent brilliant announcements, Stellantis has few electric offerings compared to their competitors. “It’s somewhat questionable whether they can achieve those goals, especially in the short term,” says Jessica Caldwell, director of insights at Edmund’s. “They don’t have much time.”

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This difficult reality for companies like Stellantis is part of what makes California’s new rules so transformative. The world urgently needs to phase out fossil fuels and reduce greenhouse gas emissions to prevent catastrophic climate change. Gasoline cars and light trucks are a big part of the problem, considering 17% of US greenhouse gas emissions— not to mention the release of other forms of air pollution that contribute to thousands of deaths. By 2050, 90% of cars on US roads must be electric for the nation to meet its emissions commitments, according to 2020 survey by researchers at the University of Toronto.

American politicians have been trying for years to force car companies to make the switch that science demands. Back in the early 1990s, California tried to get automakers to develop and sell zero-emissions vehicles, a mandate that led to the launch of the nation’s first mainstream electric car, GM’s EV-1. But the effort cratered under sustained pushback from the auto industry and the George W. Bush administration.

In the years since, the government has relied mainly on more frugal efforts to promote the auto industry, such as consumer tax credits for zero-emission vehicles. The result was that the industry was able to continue to squeeze money out of 100-year-old internal combustion engine technology while slowly moving away from fossil fuels. Manufacturers only got serious about electric vehicles when it became clear that new electric entrants like Tesla would take over the market if they don’t come together.

Those economic realities—and perhaps a little climate responsibility—may have been what ultimately pushed companies like GM and Ford to strong plays for the electric vehicle market Over the last few years. But for players who felt it was in their best interest to keep pumping out gas-guzzling cars and trucks, there was little to turn them away from fossil fuel vehicles. The world needed a transition to electric vehicles, but the US was going to achieve it at whatever pace the auto industry felt.

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Some say it still may be. California’s requirements — likely to go through the necessary federal approval — are broadly in line with the electrification schedules of companies such as GM, which previously pledged to sell only electric vehicles by 2035. Some environmentalists say the deadline not soon enough “We have to go electric much sooner or see our climate stability slip away,” said Scott Hochberg, an attorney at the nonprofit Center for Biological Diversity.

But despite this perceived lack of ambition, California’s new mandate at least puts elected officials in a position to dictate the speed of this electric-to-industry transition, not the other way around. The state ban on gasoline vehicles adds a stick to the new economic carrots for electric cars passed in the Biden administration’s recent climate bill — in this case a fine of up to $20,000 for each car sold in violation of the state’s electrification goals. This means not only rewards for companies that took the climate crisis seriously enough to invest early in electric vehicles, but also real consequences for players like Stellantis that ignored the urgent need for action to reduce emissions in order to squeeze out a few more dollars from its gasoline cars and trucks. And at this stage of the game, with humanity’s chances of keeping the planet’s temperature rise below 1.5°C slipping awaythese consequences are long overdue.

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Write to Alejandro de la Garza c [email protected].

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