Four Obstacles to California’s Bid to End ICE Vehicle Sales by 2035

California has managed to cultivate the largest electric vehicle market in America in a few short years, hosting major EV makers such as Tesla, Rivian and Lordstown Motors while accounting for a significant percentage of EVs sold in America. As of the end of 2021, there were slightly more than one million electric vehicle units registered in California, more than any other state in the country.

The Golden State is now planning on banning the sale of new internal combustion engine cars (ICE) by 2035 as part of its efforts to curb carbon emissions. A policy that will outlaw the sale of new gasoline-powered cars has received approval from state regulators. However, despite the progress California has made over the past decade, there are still a few significant challenges standing in the way of this ambitious goal.

Electric cars are still expensive. Ever since they first hit the roads, electric vehicles have been significantly more expensive compared to similar gas-powered vehicles. Even with state and federal subsidies, buyers often have to dig deeper into their pockets to purchase EVs. And thanks to factors such as supply chain constraints and shortages, the average price of a new EV has gone up to a whopping $66,000. This locks out a large chunk of the market from purchasing EVs.

EV infrastructure is still woefully insufficient. America’s charging infrastructure is simply too limited to comfortably support the current number of EVs on the road, let alone a massive transition to electric cars. Furthermore, plenty of public chargers are faulty or don’t even work. The country’s electric grid also isn’t designed to support multitudes of power-hungry electric vehicles, culminating in range anxiety that has prevented many drivers from switching to EVs.

Electric vehicle adoption could have major labor consequences. A recent report by Ernst and Young estimated that of the 590,000 employees who are involved in automotive parts manufacturing, 150,000 build parts for internal combustion engine powertrains. Automakers will have to either train their employees on designing electric motors and EVs in general or lay off some of their workers as they electrify. Ford recently fired 3,000 employees as part of its efforts to restructure its human resources in readiness for electrification.

China maintains a monopoly on the EV battery mineral market. Electric vehicle batteries are built using scarce minerals such as cobalt, nickel and manganese. On top of being the largest EV market on the globe, China is also the largest supplier of critical EV battery metals in the world. Guidehouse Insight analyst Sam Abuelsamid estimates that an estimated 90% of the lithium used in EV batteries comes from the country.

Although the Biden administration has been urging automakers to source these metals locally, breaking China’s dominance won’t be easy even though U.S.-based energy storage companies such as QuantumScape Corp. are doing what they can to improve the EV battery technology upon which electric vehicles depend.

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