California's New Emissions Laws May Completely Change The Auto Industry

Politics

Because after the law goes into effect, the automakers will flee.

The auto industry pays a lot of attention to the laws that are passed in California, and with good reason. That’s because as one of the largest car buying states in the nation, automakers are faced with two options. They can adhere to the new standards set by new laws or lose access to a huge market. According to Reuters, it now seems that California is passing a new and more stringent carbon emissions law than the one currently in place. That law happens to already be the strictest in the country.

California’s current carbon law set a goal for the state to reduce carbon emissions to 1990 levels by 2020, a goal which it is on target to meet. Now, the new law states that emissions must be 40% lower than 1990 levels by 2030, only 10 years after the first target is to be met. A cap and trade program is also a component of the law, which enables cleaner industries to make additional money selling carbon credits. While many of these cuts will have to come from energy-producing industry such as power plants, there is no doubt that some of these cuts will come by means of greening up the supply of gas-powered cars on the road while increasing the number of (sometimes cool) alternatively fueled vehicles.

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However, there is a chance that it comes with plenty of blowback from automakers. Some may even contemplating leaving the state due to the increased cost of business. One automaker won’t, though, and of course that would be Tesla. Given that Elon Musk’s company only builds electric cars, nobody under the Tesla roof will have to worry about bureaucrats asking for cash. However, even though the deal sounds great for EV automakers in the state it does have one drawback. The price of electricity in California will increase. While buyers of the high-priced EVs like the Model S and X likely won't sweat the bigger bills that may not be the case once the Model 3 or cheaper Teslas roll out. For now, its best to buy your cheap dream car ASAP.

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