California could become the first state to announce an electric vehicle mandate, opening up a massive market opportunity for the manufacturers of green-energy vehicles in the Golden State.
What Happened: The California Air Resources Board is expected to vote on Thursday day on stringent rules to ban gasoline cars by 2035 and set interim targets to phase out these cars, board member Daniel Sperling told CNN.
While expressing confidence that the rule would be adopted, Sperling reportedly said it would positively impact the U.S. car market.
“This is monumental. This is the most important thing that CARB has done in the last 30 years,” Sperling reportedly said.
The board is also contemplating putting in place interim quotas, mandating that 35% of 2026 model cars, SUVs, and small pickups sold in California should be zero-emission vehicles. This quota will increase incrementally to 51% in 2028, and 68% in 2030, as per the report.
About 20% of the quota can be plug-in hybrids.
Why It’s Important: California is the biggest U.S. state in terms of GDP. According to the latest data, the Golden State contributed $3.21 trillion, or about 14.6% of total U.S. GDP, in the first quarter of 2022.
The state is also among the biggest auto markets. New car registrations stood at 853,347 units in the first half, according to the California New Car Dealers Association, representing about 12.5% of the nation’s total.
That represented a decline of 17.9% for the first half amid economic softness and supply constraints, but was lower than the 18.3% drop registered by the U.S.
Tesla, Inc. TSLA, previously headquartered in California before shifting base to Texas last year, saw an increase of over 80% in new car registrations in the first six months of the year. The company sold 42,320 Model Y cars in the state, making it California’s top-selling model.
EV upstarts such as Rivian Automotive, Inc. RIVN, Fisker, Inc. FSR and Lucid Group, Inc. LCID could also be in for huge gains as they sort out their production issues and begin to scale up.
Price Action: Tesla closed Wednesday’s session at $891.29, up 0.22%, according to data from Benzinga Pro.
Image and article originally from www.benzinga.com. Read the original article here.