California's fossil fuel ban likely in for long fight

In California, where plumes of smoke have billowed and spread across cities as historic wildfires stubbornly rage, the gasoline-powered vehicle's days may be numbered.

In just 15 years, the nation's largest auto market and the world's fifth-largest economy will stop the sale of new passenger cars and trucks with internal combustion engines in an effort to transition away from fossil fuels and reduce greenhouse gas emissions, Gov. Gavin Newsom said last week.

"Our cars shouldn't make wildfires worse and create more days filled with smoky air. Cars shouldn't melt glaciers or raise sea levels, threatening our cherished beaches and coastlines," he said.

The ambitious move by the Democratic governor is another step in what some legal experts say is likely to be a long fight over California's authority to set vehicle-emission standards.

But the long-term feasibility of Newsom's executive order could ultimately rest on who wins the presidential election in November.

The Trump administration is trying to revoke the state's authority to restrict tailpipe emissions. If successful, said Monica Baumann, a partner at Sacramento, Calif., law firm Scali Rasmussen, "that would effectively mean that it was overriding this executive order" and regulations from the state's clean air agency.

"This entire thing is going to rely upon either a change in administration, success in federal courts or some combination of the two," Baumann, who previously was director of legal and regulatory affairs at the California New Car Dealers Association, told Automotive News. "This is just adding fuel to a really big fire."

Under Newsom's executive order — signed last week on the hood of a Ford Mustang Mach-E electric crossover — the California Air Resources Board will develop regulations to mandate that 100 percent of in-state sales of new passenger cars and trucks are zero-emission by 2035, which would cut greenhouse gas emissions by more than 35 percent, according to the governor's office. The board also plans to mandate that all medium- and heavy-duty vehicles be zero-emission, where feasible, by 2045.

CARB Chairman Mary Nichols said last week via Twitter that the effort will transform transportation in the state, dramatically reduce vehicle emissions and foster a new generation of clean vehicles.

The order does not prevent Californians from owning combustion engine vehicles or selling them on the used-car market.

It was not immediately clear whether Californians will be able to buy a fossil fuel vehicle across state lines and register it at home. "One obvious fight for the future," said Baumann, "is whether or not this will actually be implemented as a ban on the sale of [new] gasoline-powered vehicles by 2035 versus a ban on the registration of new vehicles that are gasoline-powered."

The ban could have implications elsewhere in the U.S. Other states that follow California's car pollution rules, such as Massachusetts and Pennsylvania, could decide to follow in its footsteps on the gasoline vehicle phaseout.

Automakers such as Ford, Volkswagen and Honda finalized binding agreements with California in August to cut vehicle emissions in the state.

Ford last week began airing an ad promoting its adoption of tougher emissions regulations under the agreement and calling out rival brands — Chevrolet, Jeep and Toyota — for failing to join the effort.

Without expressly backing the order, Ford said it agrees with Newsom that it's time to take "urgent action" on climate change, citing efforts by the automaker to electrify most of its iconic nameplates, including the F-150 pickup.

The Alliance for Automotive Innovation, which represents most major automakers, including Ford, General Motors, Fiat Chrysler Automobiles and Toyota, noted its members already offer more than 40 electric models — a number that is expected to triple by 2025 — but argued regulations are not the answer. "Neither mandates nor bans build successful markets," said CEO John Bozzella.

The group said electric vehicles account for less than 10 percent of new-vehicle sales in California, which is still best in the nation.

Still, achievement of California's 2035 phaseout goal will require a major infrastructure and policy overhaul that could rely on other national efforts, according to analysts from Morgan Stanley.

California dealers are grappling with the big-picture business strategy and how the governor's order will affect their operations.

Hilary Haron, owner of Haron Motor Sales Inc. in Fresno, Calif., says there will be a need for robust discussions that engage dealers and manufacturers, as charging infrastructure currently lags the state's lofty ZEV goals.

The dealership group in the state's Central Valley retails Jaguar, Land Rover and Volvo vehicles and offers hybrid and electric options, but Haron's customers want to be able to drive north to the Bay Area or south to Los Angeles without worrying about battery range, she explained.

The percentage of EVs sold last year by the group was "negligible," she added.

"The worst wildfire California has ever seen is in our backyard. The valley is full of smoke every day. What does that mean for emergency vehicles?" she asked. "What if we're 15 years down the road — we're phasing out gasoline engines — what are our emergency vehicles? Are they electric? Do we have infrastructure in the mountains where they can recharge?"

Brian Maas, president of the California New Car Dealers Association, echoed those sentiments and pointed to critical elements such as consumer adoption, ZEV affordability, charging infrastructure and current state ZEV standards that still haven't been met.

"While we greatly respect the governor's ambition and emphasis on California leading the fight to combat climate change, we have many unanswered questions about fundamental components of his executive order," Maas said in a statement last week.

Beau Boeckmann, COO of Galpin Motors in North Hills, Calif., told Automotive News he agrees with the governor's order, citing pollution caused by the wildfires and climate change as urgent reasons to act.

"California is not going away, and it's not going to get any easier out here as far as emissions go," he said.

Galpin Motors sells Ford, Honda, Mazda, Volkswagen and other brands and was one of the first dealership groups in the U.S. to sign up with Swedish EV startup Polestar. He said the group has embraced brands that are pro-EV and can compete with Tesla.

Boeckmann, who grew up in the San Fernando Valley, where there was a dense layer of rust-colored smog, said Newsom's action doesn't have to be some "big, scary thing." Manufacturers and dealers have 15 years to gear up for it, he said.

"Of course we're going to find a way to make it work. That's how we evolve," Boeckmann said. "We need to evolve as an industry. We need to evolve as dealers.

"You know the saying, 'Without your health, what do you have?' We could say the same thing about the health of our planet."

Laurence Iliff contributed to this report.