Since 2016, California has been a leading market for the electrification of the transport sector. About 250,000 electric vehicles are on California roads, and the state has plans and programs in place to reach its goal of 1.5 million electric vehicles by 2025.
Around 63% of dwellings in the state are single-family homes, making it easier for residents to charge a plug-in vehicle. Homeowners dominate the EV market, with 96% of California electric vehicle owners also owning their dwelling, and 91% residing in a single-family home.
In the first half of 2023, 25% of all vehicles sold in California were electric – nearly three times the national average.
The cornerstone of the California’s policy mix, the Zero Emissions Vehicle Program goes back to 1990 when it was introduced to tackle air pollution. Since 2005, it also covers CO2 emissions, mandating a minimum (and rising) proportion of zero emission vehicle sales that carmakers must comply with. In its current form, 22% of car sales in 2025 must be zero emissions vehicles. This policy is accompanied by various financial incentives and RD&D support. From 2018, the scope of the desired low-carbon transition in transportation was widened to also include buses and heavy-duty vehicles.
Given its significant share of the US auto market, California's Clean Car Standards and Zero Emission Vehicle mandate obliged auto manufacturers to produce cleaner vehicles for the entire North American market—the famous “California effect”. The upshot is that higher costs of meeting California standards are borne not just by car buyers in California (and other jurisdictions adopting its standards) but distributed across the North American market.
The initial phase of California's zero emission vehicle mandate (1990–2003) proved an effective policy instrument. At the beginning of the mandate, there were only 2300 credit applicable vehicles on the road in California, while this number reached 140,000 by 2003.
Regional climate plan targets are developed through a planning process that allows stakeholders considerable flexibility in how they plan to achieve reductions while also using rigorous modelling techniques to assess effectiveness.
Under the Advanced Clean Cars program, a regulation was introduced to increase the stringency of tailpipe and greenhouse gas emission standards for new passenger vehicles for vehicle model years 2017–2025.
Zero Emission Vehicle mandate extended to truck fleet
Leverages public and private investments to support adoption of cleaner transportation powered by alternative and renewable fuels.
California Climate Investments grants support a wide range of next-generation vehicles, including electric school buses in Sacramento, electric yard trucks in Fontana, hydrogen-powered buses in the Coachella Valley, and a fleet of electric delivery trucks for Goodwill Industries in the Bay Area. More than 65% of the investments are for projects or vehicles that are in, or benefit, disadvantaged communities.
The Clean Vehicle Assistance Program was launched to make environmentally-friendly vehicles accessible and affordable to all.
Executive order requiring all new passenger vehicles to be zero emissions by 2035.
The Clean Vehicle Rebate Project was designed to encourage the early adoption of emerging technology, and its goal was to accomplish a 16% market share for clean vehicles. Since its launch in 2010, the program has issued half a million rebates, totaling $1.2 billion, that have helped Californians switch to cleaner vehicles.
The Low Carbon Fuel Standard in California conveys considerable political advantages with respect to carbon pricing. First, relative to carbon pricing, California's LCFS introduces a higher, more focused price that is applied only towards emissions relative to the standard. Second, the LCFS penalises the production of high-CI fuels while subsidizing low-CI fuels, whereas carbon pricing merely penalizes low-CI fuels less than high-CI ones. This carries some attractive features politically. By creating market incentives for the production of low-carbon fuels and electricity, fuel carbon intensity standards build a constituency for decarbonisation.
When the California Air Resources Board first adopted the Low Emission Vehicle regulation in 1990, it was noted that 10 percent of new vehicle sales would need to be zero emission in order to meet tailpipe standards. Quickly, it became its own requirement. At that time, the Board required that in 1998, 2% of the vehicles that large auto manufacturers produced for sale in California had to be zero emission vehicles, increasing to 5% in 2001 and 10% in 2003. The Board committed to biennial reviews of the program to provide a forum for the necessary policy discussions. The regulation has been modified several times over the years to reflect technological advancements.
California's Zero Emissions Vehicle mandate was updated in 2012 under California's Advanced Clean Car program (see below).
Main policy objective: Reducing air pollution
Secondary objective: Vehicle fleet decarbonisation
California's first bill to designate carbon dioxide as a pollutant — California's Clean Car Standards (also know as the Pavley regulation) — directed the California Air Resources Board to adopt the maximum feasible and cost-effective vehicle emission standards. The regulation came into force 1 January 2006 and applied to new passenger vehicles for the 2009–2016 vehicle model years.
Primary policy objective: Reducing air pollution
Secondary objective: Vehicle fleet decarbonisation, vehicle emission standards
The Clean Transportation Program (also known as the Alternative and Renewable Fuel and Vehicle Technology Program) invests up to $100 million annually in a broad portfolio of projects including those related to clean transport, petroleum reduction, zero emission vehicle adoption and improving air quality standards.
The Energy Commission leverages public and private investments to support adoption of cleaner transportation powered by alternative and renewable fuels, while helping to achieve California’s ambitious goals on climate change, and sustainable, long-term economic development.
Primary policy objective: Incentivise and scale up clean transport facilities
Encourage early adoption of emerging technology.
An executive order issued by Governor Schwarzenegger in 2007 established the Low Carbon Fuel Standards, which was first implemented in 2011. The standard operates by setting a benchmark for carbon intensity (the amount of carbon dioxide equivalent per megajoule of energy) of transportation fuels in the state, then gradually reducing that benchmark over time.
Relative to 2010 benchmark levels, the Standards require vehicle fuel producers and distributors to reduce the carbon intensity of transport fuels by 10% by 2022 and by 20% by 2030. It was been revised several times since then.
Primary policy objective: Reducing air pollution
Secondary objective: Transportation fuel decarbonisation
In 2012, the California government adopted additional vehicle emission standards for vehicle model years 2017–2025 under the National Program and introduced the Advanced Clean Cars program, also known as Pavley II.
This regulation increased the stringency of tailpipe and greenhouse gas emission standards for new passenger vehicles. A Zero Emission Vehicle credit percentage requirement of 4.5% in 2018 and 22% for 2025 was adopted with a view toward meeting a 2030 deployment target of five million zero emission vehicles.
The Advanced Clean Cars II regulations were adopted in 2022. This imposed the next level of low emission and zero emission vehicle standards for model years 2026-2035. These aim to meet federal ambient air quality ozone standards and California’s carbon neutrality targets.
Primary policy objective: Reducing air pollution
Secondary objective: Vehicle fleet decarbonisation
Funding from California Climate Investments, a statewide program that invests billions of cap-and-trade dollars to reduce greenhouse gas emissions, aims to strengthen the economy and improve public health and the environment — particularly in disadvantaged communities. Since the transportation sector overall is by far the largest contributor to the state’s total annual greenhouse gas emissions, a major focus of the climate investment program has been supporting the development and deployment of next-generation zero-emission trucks, cars and buses.
Primary policy objective: Incentivise and scale up clean transport facilities, with a focus on disadvantaged communities
The Zero Emission Vehicle mandate was expanded to the truck fleet through the California Sustainable Freight Action Plan.
Primary policy objective: Vehicle fleet decarbonisation
The Clean Vehicle Assistance Program was launched in 2018 through a partnership between Beneficial State Foundation and the California Air Resources Board, funded by California Climate Investments. Our goal is to make environmentally-friendly vehicles accessible and affordable to all.
Primary policy objective: Make zero emission vehicles accessible to low-income and disadvantaged communities
The 2035 Zero Emission Vehicle executive order was signed in 2020 by Governor Newsom requiring that all new passenger vehicles in California be zero emission vehicles by 2035
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