Drivers throughout the U.S. may want to start a rainy day car fund in the wake of California Governor Gavin Newsom’s climate-change-focused ban on sales of new gas-powered autos beginning in 2035.
Veteran auto analyst Lauren Fix tells Yahoo Finance’s The First Trade that the cost of new cars across the country could rise materially in the years leading up to the ban. In the mind of the beancounters at automakers such as Ford and GM, in order to offset higher outlays from ramped up electric vehicle production to meet California’s new ban, consumers will have to bear the financial burden upfront.
“If automakers have to produce electric vehicles, they have to pay those carbon credits which sometimes in the past they were buying from Tesla. That all gets figured into the price that you pay, somewhere around $2,500 a car already. So if they are going to increase the cost, that means no longer will the average price of the vehicle across the U.S. be somewhere around $34,000. It could go up closer to $40,000. Again, that makes it untouchable for some consumers, and that’s not going to help,” Fix explained.
Seemingly trying to one-up France’s 2017 decision to ban gas-powered autos by 2040, Newsom signed on Wednesday an executive order that puts California in the position as most aggressive on future auto emissions standards. The ban will apply to new gas cars and trucks. Gas-powered cars and trucks on the road before the ban will still be allowed to roam freely.