The following appeared in National Review’s Capital Matters on May 26, 2022.
New Mexico just became the 15th state to follow California’s lead in adopting “Clean Car Standards.”
Under New Mexico’s new automobile standards, roughly 7 percent of new cars sold in the state must be zero-emission in 2025. In the latest report available (3rd quarter of 2021) zero-emission vehicles amounted to just 2.29 percent of new vehicle sales in New Mexico. So, to comply with the new rule, sales of zero-emission vehicles will need to more than triple from Q3 of 2021 to 2025.
While the number of states adopting these standards is limited to mostly the West Coast and Northeast so far, anytime a Democrat is elected governor, this kind of policy could be on the table for adoption. That’s because, despite the impact that adopting such policies will have on everything from the automotive to the agricultural sectors, states often don’t need to push these policies through their legislatures for approval.
In New Mexico’s case, Governor Michelle Lujan Grisham these standards through an unelected Environmental Improvement Board. California’s own in states with Democratic governors, this kind of policy could be coming your way if it hasn’t already been put in place.
The real kicker is that by subjecting itself to California’s political whims, New Mexico (and other states adopting these standards) could be forced to adopt even more aggressive “Clean Car” standards soon. California governor Gavin Newsom has issued an executive order that, if adopted by California’s Air Board, would end the sale of gasoline-powered cars in California by 2035. The board’s decision on final adoption of that rule could come in California as early as this August.
Under California’s proposed rule, 35 percent of new cars, SUVs, and small pickups sold in California (and thus other states following their policies) must be zero-emission starting with 2026 models. That number will increase yearly, reaching 51 percent of all new car sales in 2028, 68 percent in 2030, and 100 percent in 2035.
Tripling sales of electric vehicles (EVs) in two years in New Mexico means dealerships will cross-subsidize EVs by raising prices on gasoline vehicles or they will look to the state to further subsidize sales of EVs. This could make gasoline vehicles purchased in states following California more expensive, leading to more car buyers looking out of state. That would result in lost jobs, and tax revenues leaving those states. That situation will get far worse if California adopts the even more aggressive rules now under consideration.
There is nothing inherently wrong with EVs, but there are numerous public-policy implications in their mass deployment, especially if the tool is to simply mandate their sale at the state level.
- Current tax credits and subsidies include a $7,500 federal tax credit and various credits for upgrading connectivity to the electrical grid. Many states also have credits in place. Those credits and subsidies are paid for by shifting costs to taxpayers and utility rate payers, a situation that will worsen dramatically as EVs are forcibly introduced into the market.
- A single EV charging station requires tens of thousands of dollars in upgrades to the electrical grid. A recent report found New Mexico (a big, sparsely-populated state) to have just 401 public charging stations statewide. And those need to be maintained. A recent report from EV-friendly San Francisco found that 27 percent of the Bay-areas charging stations were not functional. Who pays for these charging stations becomes a much more important issue when they become a major component of vehicle fleets.
- And this assumes we have enough electricity to “fuel” a massive new fleet of EVs. New Mexico’s largest utility is keeping its coal-fired power plant open just to keep the lights on and says it won’t have half the solar/battery replacement power needed during the summer of 2023. California’s problems keeping the lights on are well-known, but according to a May 8 Wall Street Journal article, “electric shortage warnings are growing across the United States.” A 2021 New York Times report noted that if all Americans actually replaced their gas-powered vehicles with electrical ones it would increase electricity demand by 25 percent.
Additional issues with the widespread and aggressive adoption of EVs include the need for more mining. Will environmentalists who ostensibly support EVs support the mining of everything from copper to rare-earth minerals to go along with their deployment on a large scale?
Who pays to maintain the roads? It is a relatively simple task to apply a charge to the use of EVs for road maintenance, but politically speaking, owners of EVs are currently favored. Will politicians have the courage to apply fees to electric-vehicle users to pay for the roads?
Few advocates of free markets such as myself oppose the deployment of EVs. But it should be an organic process driven by market forces, not government mandates and subsidies where the burdens fall on those who cannot afford or have no use for EVs.
Worse, the process of joining California on EVs is being done in the dark, absent the say-so of our democratically elected representatives.
Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility