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October 23, 2020

Cali Crazy Comes to Congress

The state’s regulatory meddling in the auto industry should not be a national model.

It was just four short weeks ago when we covered California’s bid to increase the market for electric cars by mandating all new cars sold in the state be electric by 2035. Left unresolved by that mandate, of course, is just how the state will come up with all that electricity considering it couldn’t even keep the lights and air conditioning on this summer.

Not to be outdone, this week the usual suspects in Congress introduced legislation taking that mandate national, with the added kicker of requiring half of all vehicles sold in 2025 be zero-emission vehicles. (In California, ZEVs are defined as “electric, plug-in hybrid electric, and fuel cell vehicles.”) Among the Senate cosponsors behind Oregon’s Senator Jeff Merkley are Bernie Sanders, Elizabeth Warren, and Cory Booker.

It’s worth mentioning, as the editorial board of the Wall Street Journal pointed out, “Last year a mere 2% of car sales were electric, notwithstanding the $7,500 federal tax credit, state subsidies and other incentives such as car-pool lane access.” The editors added, “Progressives have been hyping electrics for years, and that’s fine if consumers want to buy them … but they are still out of price range for 99% of Americans.” As an example, the reborn Hummer from GM, which has evolved from the epitome of a gas guzzler to a ZEV, will have a 350-mile range … and a colossal $112,595 price tag. The editorial board concluded, “Folks in middle America can buy a home for less.”

Speaking of middle America, there are a lot of farmers who may be hopping mad about this mandate. Along with their senator, Chuck Grassley, the leaders of two Iowa-based agricultural-advocacy groups condemned the ZEV proposal, stating that “banning the sale of new vehicles powered by biofuels would be a hammer blow to Iowa’s ethanol and biodiesel producers and would crush a vital market for [our] farmers.” Remarkably, and perhaps alarmingly to those who like to eat, over half of Iowa’s corn crop and one-third of its soybeans go into producing ethanol and biofuels. As they explain, “Losing this market could very likely trigger another farm crisis.”

We’d be remiss not to point out that the ethanol market exists solely because the government mandates that, too. Thus, with the Democrats’ legislation, we’d end up with competing mandates that benefit opposing constituencies.

To be sure, Merkley’s legislation is intended more for a revisit under a Biden-Harris administration and a far-left progressive Congress, but should it somehow pass it would also bring back the prospect of resellable “zero-emission vehicle credits.” These credits allow larger automakers — those who actually produce and sell cars that people want — the opportunity to purchase their penance from the smaller manufacturers, who’ll specialize in making a limited number of boutique cars. In essence, this amounts to selling each car twice — once to a customer and once for the credit. Welcome to the newest version of wealth transfer.

We were once told that if we liked our health insurance plan, we could keep it. (Who could forget that lie?) And because a ZEV mandate for California would “create the biggest market for used cars and vintage parts this side of Cuba,” don’t be surprised if and when this passes nationally that we see another “Cash for Clunkers” type of program to eliminate gas-powered cars and make their replacement parts more difficult to obtain.

After all, we need to cut the planet’s temperature another hundredth of a degree somehow.

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