Maintaining Momentum in Troubling Times – the Need for California Leadership

Until the COVID-19 crisis, California was leading the nation in electric vehicle manufacturing. No other state produces more electric cars, trucks, and buses than California. Nor is any other state employing more people in the production of these vehicles. Our clean vehicle industry recorded a 22 percent increase in employment in 2018. These are facts that are not widely known. And, some find quite surprising as California is often viewed as high-cost state that is not friendly to manufacturing.

With this new public health crisis, both unfortunately and understandably, like many auto companies the nation’s largest electric car manufacturing plant, the Tesla factory in Fremont, was shut down. This action was taken to comply with the Governor’s order to only support “essential businesses” and to limit the spread of the virus.

When the virus gets under control, and workers are allowed to return to factories, we hope the Governor and the California Legislature will take the necessary actions to stimulate our economy and put people back to work building electric vehicles. It is important to recognize that while we are fighting this one near-term crisis, we need to be doing all that we can to also combat the long-term threat from climate change.

While we appreciate that state investments and resources will need to protect public health from the virus, the good news is that California has a program called Cap & Trade that generates about $3 billion per year from emitters of carbon pollution. In the upcoming 2020-2021 state budget, we are urging the California Legislature and Governor to allocate about 1/3 of those funds toward low carbon transportation programs. This seems appropriate given that that about half of the carbon pollution comes from the transportation sector.

Because the virus, and the corresponding economic downturn, the focus now should be on those programs that both reduce carbon pollution and put people back to work. In last year’s budget, the investment in low carbon transportation from the Cap & Trade program was insufficient to meet the demand. Along with inaction at the federal level, and the loss of the federal tax credit for electric cars, electric vehicle sales actually declined in 2019. If we are to have hope of meeting the state’s 2030 climate goals, we need to see annual sales growth in the order of 15-25 percent. We can turn the situation around, but only if we are prepared to take the necessary actions and commit the amount of funds that are truly necessary to meet these goals.

At CALSTART’s annual “2030 California Policy Summit” on Wednesday we will be talking about the need for these investments and other strategies. This will now be a virtual conference and we hope you will join us. To learn more visit:

John Boesel