SACRAMENTO, Calif. — California’s Democratic leaders aren’t too happy about it, but the Trump administration has no doubt done them a favor by scrapping the state’s emission rules that would have essentially banned the sale of new internal combustion vehicles by 2035. The feds revoked California’s special permission to impose air pollution standards that are tougher than federal requirements.
As always, California’s government was using its massive market power to force auto manufacturers to make the state’s emission standard the de facto national standard — and indeed several other states had followed its lead. The president also revoked California’s ability to impose zero-emission rules on commercial vehicles and to require tougher diesel rules.
In response, Gov. Gavin Newsom signed an executive order “doubling down” — his words — on the state’s clean-energy mandates, which “Reaffirms the state’s commitment to zero-emission vehicle (ZEV) deployment” and “Initiates the development of Advanced Clean Cars III regulation to advance new strategies for emissions reduction.” Yet another state versus federal battle will ensue, but the Newsom order reads mostly like sour grapes.
In reality, the feds have actually thrown California a lifeline because the state is missing its EV targets by a longshot — and its electricity grid is struggling to meet current capacities. The federal rules will of course help consumers and provide clarity to manufacturers, but it also will save the state from the embarrassment of having to push its deadlines further into the future or risking blowback from consumers.
California leads the nation in the percentage of electric vehicles sold, with one out of every four new cars being an EV. But those numbers are flat. They went up a mere 1 percent last year at a time when EV sales increased nationally by 46 percent, according to the Los Angeles Times. Californians tend to be early adopters of new technology, but it appears as if the bulk of people who want such vehicles have bought them.
The newspaper quotes the head of the state car dealers’ association: “The data don’t lie. The demand doesn’t match what the mandate requires. It’s just that simple.” That explains why officials must rely on edicts and punishments (e.g., imposing $20,000 penalties on every noncompliant vehicle sold). I have nothing against EVs, but their widespread adoption depends on their meeting consumer demand, not on government force.
Regarding the electricity grid, the most telling anecdote came in 2022. As the New York Post put it, “California residents are being asked not to charge their electric vehicles to conserve energy amid a brutal heatwave — just days after the state announced a plan to ban sales of new gas-powered cars by 2035.” We haven’t had such warnings since then, but it reflects the absurdity of promoting higher electricity use as the state fails to upgrade the grid. The marketplace could certainly sort this out if only the state’s regulators would let it.
A struggling grid is not a problem unique to California, but it speaks to the need to improve energy capacity to keep up with a variety of new strains on the system — ranging from growing tech centers to new industrial facilities to increased EV adoption. To deal with the issue, the U.S. Congress is considering a bipartisan bill to streamline permitting processes for electricity plants.
For instance, the Energy Permitting Reform Act of 2024 limits the ability of people to file lawsuits to stop energy projects by reducing the statute of limitations, expediting legal reviews, and setting stricter deadlines on federal agencies. This reform echoes the kind of reforms that California has approved (but not for energy projects) regarding the California Environmental Quality Act (CEQA) — the state’s “landmark” environmental law that impedes every sort of project.
Although this is a good bill, the real impediments come at the state level. As my R Street Institute colleagues explained in a report last year:
The problem is not a lack of motivation from capital markets, but rather an outmoded regulatory architecture of which permitting and siting and generator interconnection approvals are the core culprits. Although federal permitting and siting presents major challenges, incremental reforms and bipartisan interest in further reforms signify progress. Having generally trended in a more restrictive direction, state-level permitting and siting now represents one of the most significant barriers to energy development in most of the country.
Not surprisingly, California has some of the most Byzantine permitting and siting processes. The state received a C+ on electricity competition on a recent scorecard, but these past progressive environmental policies are actually impeding the current goals of progressives. They refuse to fully grapple with the degree to which their own favored environmental laws stop environmentally friendly projects. Nearly half of all CEQA lawsuits, for instance, target such projects.
This is certainly true for energy projects. Last year, the Union of Concerned Scientists argued that California needs to triple its clean energy capacity if it’s going to meet its clean energy goals. It points to the need for grid updates, improvements in the grid interconnectivity process, and permitting/siting reform. The group points not only to CEQA restraints, but to the wide variety of other permits needed also from a panoply of state and local agencies. The state spent decades building these regulatory systems. It’s now learning that rolling them back isn’t so easy.
If California leaders are serious about boosting EV adoption, they ought to spend less time passing new executive orders imposing more mandates — and more time expanding electricity production and improving the charging infrastructure so more people might, you know, actually want to shift to electric power. In the meantime, they’re fortunate that the Trump administration has given them more time to get it right.
Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].