While far from national reform, California’s rule affects the largest car-buying market in the U.S. and is already being adopted by some other states. Does this mean you will be forced to buy an electric vehicle or EV? no But the pressure on the auto industry is great.
What is the California Rule?
Under the new regulations, California sets benchmarks for new vehicle sales beginning in the 2026 model year when 35 percent of new car sales in the state must be battery electric, hydrogen fuel cell electric or plug-in hybrid vehicles. Currently, more than 16 percent of new cars sold in California are zero-emission or hybrid models, according to California regulators.
With such a lead in the state, Jessica Caldwell, executive director of insights at auto site Edmunds, believes automakers can meet the first benchmark. But realizing California’s goals also depends on improving the infrastructure that supports more electric vehicles.
“Although California’s net zero emissions rule could be characterized as a fairly aggressive goal when it was first introduced in 2020, automakers have long been preparing for an electric future, and significant industry progress has been made since then,” said Caldwell in a news release. “If carmakers can ramp up production, enough investment is made in charging infrastructure and the electric grid, and financial incentives can become more affordable, this milestone should be achievable – if not surpassed.”
The standards are gradually increased each year after 2026, requiring electric or hybrid vehicles to make up more than two-thirds of car sales by 2030 and 100% by 2035.
The new standards will also aim to make zero-emission vehicles more reliable and durable, so that consumers will actually want to buy an electric vehicle or hybrid instead of their favorite gas-powered models.
Before the new regulations can be implemented, the state will have to request a waiver from the U.S. Environmental Protection Agency, which allows it to set stricter rules than the federal government.
Explore: Four valuable lessons I learned traveling in an electric car
Don’t live in California? This could still be your future
California is known as a trendsetter when it comes to environmental protection. So while these provisions are extraordinary at the moment, they will likely be adopted in other states and supported at the federal level.
Seventeen states have adopted previous zero-emission vehicle standards set by California and could follow suit with these new rules. (Some have already done so, including Massachusetts, New York, Oregon and Washington.) Those 18 states account for 40 percent of the new vehicle market in 2021, according to a National Automobile Dealers Association report on the dealer financial profile of new cars in the usa
The Inflation Reduction Act emphasized the federal government’s priority of reducing carbon emissions. Initiatives funded by the law include incentives for green energy and electric vehicles. The new law, signed by President Joe Biden on August 16, renewed a tax credit for consumers purchasing qualifying new electric vehicles and an added one for used EV purchases. But the incentives come with a set of qualifications aimed at encouraging the auto industry to strengthen its domestic supply chain, and most EVs currently on the market do not meet the requirements.
Find out more: What is EV, BEV, HEV, PHEV? Here’s your guide to the types of electric cars
Yes, you can keep your gas car
Rules like the one in California apply specifically to the production of new cars by automakers. They don’t dictate what people can drive, nor do the current rules affect the sale of used gas-powered cars.
We’re also more than a decade away from seeing electric-only models of every car. So if you’re looking to buy a new car in the next few years, there’s still something to consider about whether it’s an EV.
Here are some ideas to help you consider your next car purchase.
What kind of car can you afford?
Price remains the biggest factor for most people when buying a car, says Carl Brauer, executive analyst at ISeeCars.com. Whether you’re considering a new or used car, an electric or gas model, make sure you know how much you can spend.
In July, the average price of an EV sold through a dealership was $62,893, according to Edmonds. That compares to an average of $47,198 for all vehicles that month.
Electric vehicle tax credits can help bring this technology into your price range, but there are rules about which cars are eligible. As production increases, EV prices are likely to fall. But that could be years away.
Read it: How much does it cost to charge an electric car? We do the math
On the other hand, as standards in California increase in early 2026, gas-powered cars will become fewer and fewer there. That could drive up the prices of those new and used models, Brower says. If you want to stick with a gas-powered model for a while longer, he suggests planning for that purchase sooner rather than later if you can afford it.
“If there’s anything to take now, you should probably buy your traditional vehicle before 2026 because it’s only going to go up in price,” Brower says.
What car suits your life?
If you’re considering switching to an EV, you’ll want to consider a few other factors, including how far you drive, whether you can comfortably charge it, and what you’d use the car for.
When it comes to EV infrastructure, not all hometowns are created equal. If you live in Los Angeles, you may know of several charging stations nearby that you could use to keep your car powered up for your daily commute. But this is still not the case everywhere.
look: Thinking about EVs? First-ever tax credit of $4,000 for used electric vehicles and $7,500 for new gets Congressional approval
How far you can go on a single charge, as well as the variety of EVs available, will continue to improve over time, Caldwell said in a phone interview.
“We’re still in the early stages of electric vehicle adoption,” Caldwell says. “Electric cars will become more and more popular. There will be more infrastructure. I think that’s what ordinary people will notice.”
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Taryn Phaneuf writes for NerdWallet. Email: tphaneuf@nerdwallet.com.