Pub. 2 2020-2021 Issue 4

18 Governor Newsom's Executive Order to Ban the Sale of New ICE Vehicles by 2035 Alisa Reinhardt Director of Government Affairs O n Sept. 23, 2020, Governor Gavin Newsom signed an Executive Order directing the California Air Resources Board (CARB) to enact regulations to require all new cars and passenger trucks sold in California to be zero-emission by the year 2035. According to Governor Newsom, this action is neces- sary to combat climate change. In a statement, Governor Newsom said internal combustion vehicles are the target because the transportation sector is responsible for more than half of all of California’s carbon pollution, 80% of smog-forming pollution, and 95% of toxic diesel emis- sions, and this mandate would result in more than a 35% reduction in greenhouse gas emissions and an 80% re- duction in nitrogen oxide emissions from cars statewide. In the Executive Order, CARB was also directed to develop regulations mandating all medium- and heavy-duty ve- hicles to be 100% zero-emission by 2045 “where feasible.” To support the infrastructure that will be necessary to support the mandate, the order requires state agencies, in partnership with the private sector, to accelerate the de- ployment of charging options. It also requires the support of new and used zero-emission vehicle markets to provide broad access to zero-emission vehicles for all Californians, although it is unclear what form that support would take. While the Executive Order will not prevent Californians from owning gasoline-powered cars or from selling them on the used car market, this transition would have a mas- sive impact on California’s new car dealers, as zero-emis- sion vehicles remain a small percentage of the 2 million new vehicles sold in California each year. The federal Environmental Protection Agency (EPA) imme- diately responded to news of the Executive Order by warn- ing Governor Newsom that the Executive Order “raises serious questions regarding its legality and practicality.” However, the victory of President-elect Biden drastically changes the game when it comes to the federal EPA and CARB butting heads. It is all but certain that the EPA under Biden will immediately stop defending Trump-era lawsuits and instead work hand-in-glove with CARB on vehicle emissions standards and other environmental issues. The State of California continues to push the sale and widespread adoption of zero-emission vehicles through goals and now mandates. If CARB adopts regulations to implement a 2035 ban on the sale of all new internal com- bustion engine vehicles, this mandate will have a drastic impact on dealerships statewide in sales departments and service departments, and could result in out-of-state dealerships having an unfair competitive advantage over