Last week’s policy decision makes the regulators’ intent clear when it comes to reducing carbon emissions from the transportation sector. However, the regulators are calling for a massive transition that requires a major overhaul of many components that make up the automotive industry. Here’s a quick look at them.
Supply of EVs
Californian residents may be known for their pro-environmental views and openness to new technology. However, all the enthusiasm amounts to nothing when there aren’t enough electric vehicles (EVs) available in the market.
As NPR reported, despite strong demand for EVs in the state, the actual sale of EVs accounted for only three percent of total car sales. This means that the likes of Tesla, Rivian, or even Ford, with their brand new electric models of popular cars, are far behind in building up their production capacities.
Price of EVs
Even if the auto companies were to overnight ramp up production capacities, the current prices of EVs, at $66,000 on average, put them out of the population’s reach at large.
Under measures to reduce inflation, the U.S. now allows for a $7,500 tax credit if car owners opt for an electric vehicle rather than a gas-powered one today. However, that does not entirely remove the car’s high cost. Fuel prices may be record-high today, but the price of an internal-combustion engine-powered car is far lesser, making it more affordable to buyers.