Tesla Should Thank California, New Policy Stops Gas-Powered Vehicle Purchase

In a boost to electric vehicles, California on Monday announced that it would completely halt the purchase of gas-powered sedans to state’s fleet from manufacturers not obeying its emission rules. This is likely to help electric vehicles maker Tesla which has California as the home state.

California Governor Gavin Newsom said on Monday that “the state is finally making the smart move away from internal combustion engine sedans. Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power.”

Under the new decision, starting January, California will only buy vehicles from automakers that respect the state's legal authority on emissions standards and will exclude those siding with the Trump administration on the matter. The state is in a battle with federal agencies that wanted to strip the state's authority on emission rules.

California has already sued the Environmental Protection Agency (EPA) and the National Highway Transportation Safety Administration (NHTSA) after the two agencies revoked the state’s rights to frame own guidelines on vehicle emissions.

Tesla vehicles can help

California’s decision appears a good opportunity for new generation electric car makers such as Tesla to work with California to build a positive environmental-eco system concerning vehicles.

A report by The Los Angeles Times published in September had said sales of electric vehicles are surging in California. It jumped 63.7 percent in the first half of the year. Nearly 33,000 Tesla Model 3 sedans were sold in the state during this time.

In 2018, California purchased 2,672 vehicles for its government fleet, per the data from the Department of General Services.

If California sticks to the decision and stays away from the purchase of petrol-powered trucks, sport utility vehicles, and semi-trucks, it will help Tesla to supply its current inventory and upcoming releases such as the Model Y, the Cybertruck, and its Semi.

Tesla stock was down 0.6 percent in the last trading session on November 18.

Under the new rule, California seems to be taking on car makers siding with the Trump Administration, which wanted to dilute or eliminate the rules set by the Obama regime on greenhouse gas emissions.

The recent California fires have further upped the state’s compulsions on enforcing strict environmental standards for vehicles.

The beneficiaries of California's "no gas-powered sedans" will include Ford Motor, Honda Motor, BMW and Volkswagen AG, which inked a deal with the state in July to follow revised state vehicle emissions standards.

Those facing the heat of the new decision will be GM, Toyota, and Fiat Chrysler and other automakers backing President Donald Trump against the state's battle over the authority to regulate tailpipe emissions.

Jeannine Ginivan, GM spokeswoman said it was unfortunate that California would stop buying its electric Bolt.

“Removing vehicles like the Chevy Bolt and prohibiting GM and other manufacturers from consideration will reduce California’s choices for affordable, American-made electric vehicles and limit its ability to reach its goal of minimizing the state government’s carbon footprint, a goal that GM shares.”