This is a textbook example of what happens when mandates go wrong. While President Trump will almost certainly push back against unnecessary regulations, California’s state government will likely continue to pursue burdensome and unfeasible policies.
2025 is almost here, and 2026 is barely more than a year away. Yet, regulations mandated by the California Air Resources Board require that 35% of 2026 model-year vehicles – which will be rolled out in 2025, no doubt – to be zero-emission vehicles.
We’re just not talking about low-emission vehicles here. More than one-third of next year’s new vehicles, according to California’s government, will need to be zero-emission vehicles. Are California’s regulators setting automakers up to fail?
Toyota Motor North America Chief Operating Officer Jack Hollis seems to think so. “I have not seen a forecast by anyone… government or private, anywhere that has told us that that number is achievable. At this point, it looks impossible,” Hollis declared.
Sure, Tesla stock may be flying high, but this doesn’t mean there’s an electric vehicle in every driveway. “Demand isn’t there. It’s going to limit a customer’s choice of the vehicles they want,” Hollis added, referring to California’s zero-emission vehicle mandate.
Courtesy: @KeillerDon
Yet, apparently California’s regulators will continue to pursue the path of restricting private industry. Currently, the California Air Resources Board’s Advanced Clean Cars regulations require that 100% of new vehicle sales in California must be zero-emission models by 2035.
Some commentators may view California as a bellwether state, but other states won’t follow California’s lead if the mandates are unachievable. Thus, as of this year, J.D. Power reports that no U.S. states are in accordance with the California Air Resources Board’s EV mandate.
93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
Wealth Education and Investment Principles Are Hidden From Public Database On Purpose!
Build The Knowledge Base To Set Yourself Up For A Wealthy Retirement and Leverage The Relationships We Are Forming With Proven Small-Cap Management Teams To Hit Grand-Slams!
J.D. Power added that national average of electric/plug-in vehicle adoption for retail sales is only 9% through October. Yet, lawmakers in California somehow expect automakers to produce 35% zero-emission vehicles next year despite the lack of demand.
Hollis, who operates within private industry rather than the ivory tower of government, expects to see “unnatural acts” in the automotive industry if California’s mandates are unchanged. “It’s going to distort the industry. It’s going to distort the business. Why? Because it’s unnatural to what the current demand in the marketplace is,” he explained.
Courtesy: @JesseJenkins
Certainly, it will be interesting to see how Trump’s presidential administration may clash with California’s regulators. Trump might even end up limiting or revoking states’ ability to set their own emissions standards.
Hollis “hopes it doesn’t come to that” and would prefer to see a resolution between the states, the federal government, and the automotive industry. Moreover, Hollis would like to see a “50-state rule, because that way we can treat all customers, all dealers, equally, fairly, whatever that might be.”
One can certainly hope for an amicable resolution, and ideally, California’s lawmakers will voluntarily modify or eliminate the mandates. Maybe, my concerns are unfounded and certain regulators will come to their senses.
However, I wouldn’t get my hopes up. Oftentimes, expecting rational policy decisions from the government is just a setup for a disappointing outcome.
Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!
Protect Yourself Now, By Building A Fully-Hedged Financial Fortress!
Disclaimer/Disclosure:
Legal Notice: No matter how good an investment sounds, and no matter who is selling it, make sure you’re dealing with a registered investment professional. Use the free, simple search at investor.gov
We are not brokers, investment or financial advisers, and you should not rely on the information herein as investment advice. We are a marketing company. If you are seeking personal investment advice, please contact a qualified and registered broker, investment adviser or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Please do your own research before investing, including reading the companies’ SEC filings, press releases, and risk disclosures. Information contained in this profile was provided by the company, extracted from SEC filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it.
Please read our full disclaimer at CrushTheStreet.com/disclaimer