Will Gov. Gavin Newsom's Electric Car Mandate Save the World or Stall on the Freeway?

December 07, 2022

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by David H. Freedman (Newsweek) Shifting the world to zero-emissions all-electric vehicles would in theory eliminate about one-fifth of all carbon-dioxide emissions, the chief greenhouse gas behind climate change. But making the transition quickly is a tall order and creates new problems. EVs are currently too expensive for most people. The U.S. electric grid needed to power them all is unreliable and still derives much of its energy from burning fossil fuels. Charging stations are few and far between. Supply-chain and manufacturing issues have led to wait lists. And although EVs are popular in California—they constitute 15 percent of sales versus 3 percent for the U.S.—it's unclear how many more enthusiasts the state has left.

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The price tag will be staggering: tens of billions of dollars in state spending on EV subsidies and improvements to the electric grid and EV-charging infrastructure will be needed, experts say.

Californians are in no mood to write the state a blank check. In November, they voted down a new tax measure that would have supported EVs, and since then the state has projected a $25 billion deficit for next year.

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If gas becomes cheap again, as some experts predict, the political will for big EV investments could weaken or evaporate.

"2035 may seem like a long way off, but trying to get to 100 percent of sales by then is going to be tricky," says Jessica Caldwell, executive director of insights at car-guide publisher Edmunds. "We're talking about depending on products and infrastructure that don't exist yet, and it all has to be built in parallel."

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Californians have already proven themselves EV-friendly relative to the rest of the U.S. More than a million EVs are on California roads, about half of all the EVs in America. That number would almost certainly be higher if it weren't for long wait lists for the few sub-$35,000 EV models offered in the U.S. At present, the best-selling car in the state is a Tesla Model Y, which starts at $65,990.

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Still, a big fraction of the people in California who are willing to jump into EVs may have already done so. Getting the rest of them on board runs into some tricky economics. Setting up a home charging cable can be a complex and costly chore and may not be possible for those who park in the street or in a lot. Charging challenges are worse with trucks, which require more power and outnumber cars in the state. "EVs aren't going to work for everyone," says Edmunds' Caldwell. "California is vast and mostly rural and spread out, where people may have to drive hundreds of miles, some of it in mountain ranges. They may not be able to get the charging they need to make it round-trip."

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Even those consumers who qualify for rebates must wade through layers of paperwork and then wait six months or more to get the money.

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The rules keep ratcheting up the pressure year by year on automakers to sell more EVs, fining them $20,000 for every gas-powered vehicle they sell beyond the mandated percentage. As the auto industry copes by yanking gas cars off the lots, less-affluent new-car buyers will find themselves forced to choose between EVs they can't afford and beat-up gas guzzlers that sell for a premium. Incentives to keep people choosing EVs run the risk of raising costs for those least able to afford them.

The California Air Resources Board is promising more assistance to lower-income buyers, but making sure the money gets to the people who need it will be challenging, judging by the problems existing programs have faced. So will funding the rebates. Proposition 30, which was on the California ballot on November 8, proposed a new income tax that would have raised a projected $4 billion or so largely to fund financial assistance for EV purchases, but it was defeated at the polls.

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Another challenge to California's EV mandate is that there aren't nearly enough places to plug the vehicles in.

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By 2035, California will need about 2 million public charging stations, according to a UC Davis study. Right now there are fewer than 100,000. At a typical cost of about $50,000 each, the tab could hit $100 billion.

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Those charger stations will also need costly maintenance. The state has already fallen behind in maintaining its few existing ones.

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And because lower-income car owners are more likely to lack facilities for home charging or live in communities without good access to working public chargers, the charger shortage will hit them hardest.

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According to a 2021 report from energy industry trade group Advanced Energy Economy, a $274 billion investment would be needed to bring the U.S. EV infrastructure up to speed. Given California's aggressive timetable and enormous market size, the state would need a big chunk of that investment, easily running to the tens of billions of dollars.

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There is already a shortage of batteries needed to power EVs. More than half those batteries have come from China, an increasingly unreliable source given trade and political tensions. Biden's infrastructure plan pumps more than $3 billion into expanding U.S. battery manufacturing capacity, but a global shortage of lithium and other exotic metals required for EV batteries threatens to leave manufacturers with only a tenth as much as they need to meet Biden's goals of 50 percent EV sales by 2030 for the U.S., never mind California's more ambitious target of 68 percent EVs by that year. A shortage of semiconductor chips—the average EV needs 2,000 of them—is expected to last at least another two years. Car companies will also have to retool their workforce in the midst of a labor shortage around the country. Engineers who can design EVs may be a particularly rare commodity.

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Even if affordable electric vehicles were ready on California dealer lots, the state's troubled electric grid may not be. READ MORE

Lithium-ion batteries see first-ever price increase -- A BloombergNEF report found that the cost of a battery pack — for electric vehicles, storage and other uses — jumped 7 percent in 2022. Rising prices for raw materials and components are largely to blame. (Politico)

Can the California grid handle a gas phaseout? (E&E News)

West Coast states unite to ban gasoline-powered cars by 2035 -- Oregon and Washington will require zero-emission vehicles to make up an increasing amount of new car sales, following in the footsteps of California. (PoliticoPro)

Gavin Newsom's California Electric Car Push Faces Huge Hurdles (Newsweek; includes VIDEO)

Can California’s power grid handle a 15-fold increase in electric cars? (San Francisco Chronicle)

States see lithium rush for EVs as environmentalists urge caution (The Hill)

Newsom embraces dirty energy in bid to stave off blackouts - The California governor is focused on keeping the lights on even if it means reversing pledges to eliminate dirty and risky power sources. (Politico Pro)

Excerpt from San Francisco Chronicle: Powering the vehicles means the state must triple the amount of electricity produced and deploy new solar and wind energy at almost five times the pace of the past decade.

The Air Resources Board enacted the mandate last August — and just six days later, California’s power grid was so taxed by heat waves that an unprecedented, 10-day emergency alert warned residents to cut electricity use or face outages. The juxtaposition of the mandate and the grid crisis sparked widespread skepticism: How can the state require Californians to buy electric cars if the grid couldn’t even supply enough power to make it through the summer?

At the same time as electrifying cars and trucks, California must, under state law, shift all of its power to renewables by 2045. Adding even more pressure, the state’s last nuclear power plant, Diablo Canyon, is slated to shut down in 2030.

With 15 times more electric cars expected on California’s roads by 2035, the amount of power they consume will grow exponentially. But the California Energy Commission says it will remain a small fraction of all the power used during peak hours — jumping from 1% in 2022 to 5% in 2030 and 10% in 2035.

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But in setting those projections, the state agencies responsible for providing electricity — the California Energy Commission, the California Independent System Operator and the California Public Utilities Commission — and utility companies are relying on multiple assumptions that are highly uncertain.

“We’re going to have to expand the grid at a radically much faster rate,” said David Victor, a professor and co-director of the Deep Decarbonization Initiative at UC San Diego. “This is plausible if the right policies are in place, but it’s not guaranteed. It’s best-case.”

Yet the Energy Commission has not yet developed such policies or plans, drawing intense criticism from energy experts and legislators. Failing to provide enough power quickly enough could jeopardize California’s clean-car mandate — thwarting its efforts to combat climate change and clean up its smoggy air.

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Drivers must avoid charging cars during evening hours when less solar energy is available. More than a million new charging stations must be operating. And offshore wind farms — non-existent in California today — must rapidly crank out a lot of energy.

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The total electricity consumed by Californians is expected to surge by 96% between 2020 and 2045, while net demand during peak hours is projected to increase 60%, according to a study commissioned by San Diego Gas & Electric.

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For instance, in the summer when energy is the most expensive, PG&E customers pay about 55 cents per kilowatt-hour during peak hours, more than double the 24 cents during off-peak times, according to PG&E spokesperson Paul Doherty.

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“The cost of electricity is trending so high that it represents a threat to California meeting its goals,” said Mark Toney, executive director of the advocacy group Utility Reform Network.

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Solar farms face big obstacles: insufficient materials for energy-storing batteries and a need for more transmission lines, especially in the Central Valley, a prime place for solar, said Shannon Eddy, executive director of the Large-scale Solar Association.

There’s also some “not-in-my-backyard” pushback in the desert and other rural communities. San Bernardino County outlawed solar farms on more than a million acres, and two projects were rejected in Lake and Humboldt counties.

To speed clean energy projects, Newsom and the Legislature enacted a controversial new law allowing state agencies to usurp control from local governments for siting solar, wind and some battery backup projects.

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California will need expanded ports, and developers must first submit detailed plans about a project’s cost and scale before facing extensive environmental reviews.

Adam Stern, executive director of the industry group Offshore Wind California, said the planning and regulatory process alone could take five to six years. Installing the massive turbines — with blades bigger than a football field — and constructing transmission lines and an onshore production plant would take another two to three years, Stern said.

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This new technology won’t be cheap. The cost of producing the energy averages about $84 per megawatt-hour, more than most other sources of energy, according to the U.S. Department of Energy.

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A standard level 2 charger could cost between $7,000 to $11,000, while direct fast charging costs about $100,000 to $120,000 each, according to the California Energy Commission.

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One method is called vehicle-to-grid integration, where energy can be reabsorbed by the grid when the vehicle is parked.

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Some car owners may not want to use the technology because they worry that it could affect their car battery’s life. READ MORE

Excerpt from Politico Pro: He's also blessed extensions of gas and nuclear power plants that were scheduled to be closed. Keeping the lights on takes precedence over California's clean energy goals, at least for now.

Newsom is grappling with the same nuts-and-bolts challenges of running the electric grid as other blue-state officials in New York as well as the Biden administration. The pivot reflects the awkward reality faced by Newsom and other climate-minded governors: Politics moves far faster than the building of solar fields, wind farms and transmission lines, while power blackouts and electric bill spikes hit home immediately. READ MORE

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