Governor Gavin Newsom has submitted his 2021-22 State Budget proposal to the state Legislature. Among the many provisions, the Governor’s budget proposes $1.5 billion to achieve the state’s zero-emission vehicle (ZEV) goals by 2035 and 2045, including securitizing up to $1 billion to accelerate the pace and scale of the infrastructure needed to support zero-emission vehicles.
Executive Order N-79-20 directly addresses California’s transportation emissions challenge by positioning state agencies to work with stakeholders to aggressively scale the zero-emission vehicle market. The order sets the following zero-emission targets:
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100% of in-state sales of new passenger cars and trucks by 2035;
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100% of medium- and heavy-duty vehicles in the state by 2045 and by 2035 for drayage trucks; and
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100% of off-road vehicles and equipment operations by 2035, where feasible.
To support implementation of these targets, the Budget focuses on two interrelated priorities: equity and scale.
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A focus on equity prioritizes public investments in communities suffering most from a combination of economic, health, and environmental burdens.
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A focus on scale brings down the transition cost, accelerates private capital investment, and reduces the need for direct public investment.
The Budget includes the following investments to meet zero-emission vehicle goals:
Zero-Emission Vehicle Infrastructure—Securitization of approximately $1 billion of future revenues to increase the pace and scale of the construction of electric vehicle charging and hydrogen fueling stations necessary to accelerate zero-emission vehicle adoption.
The Budget proposes statutory changes to extend existing vehicle registration fees currently set to expire in 2024 and to authorize the securitization of these future revenues to support the expansion of the California Energy Commission’s Clean Transportation Program. A portion of this funding will be used for loans that will leverage additional private sector capital to build the necessary infrastructure.
Greening of State Infrastructure: $50 million one-time General Fund to support the installation of zero-emission vehicle charging stations at state-owned facilities.
Zero-Emission Vehicles: $465 million one-time Cap and Trade funds to improve access to new and used zero-emission vehicles, including passenger cars and trucks, medium- and heavy-duty vehicles, and off-road equipment. The Budget includes additional investments in existing transportation equity programs such as Clean Cars 4 All, Clean Mobility Options, and Financing Assistance, as well as heavy-duty vehicles programs such as the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project and the Clean Off-Road Equipment Voucher Incentive Project.
These investments will be further complemented by the Low Carbon Fuel Standard-funded Clean Fuel Rewards program, which provides a new, stable consumer incentive for plug-in passenger vehicles using existing revenue generated by utilities and existing funds in the Clean Vehicle Rebate Project.
The Budget also proposes to extend existing fees scheduled to sunset in 2024 to support incentive programs to accelerate the turnover of existing light-, medium-, and heavy-duty vehicles and equipment, including off-road construction and agricultural equipment and locomotives.
Delayed Property Tax Assessment of Zero-Emission Vehicle Charging and Fueling Stations. The Budget proposes statutory changes to exclude the construction or addition of electric vehicle charging and hydrogen fueling stations completed by 1 January 2024 from the definition of accessible new construction for ten years. This proposal would create additional incentives for investment in zero-emission vehicle charging and fueling stations.
Each of these investments will help consumers adopt zero-emission vehicle technology, as will the ongoing effort to simplify and align local, state, and federal funding programs through the Zero-Emission Vehicle Market Development Strategy process. The Administration will continue to evaluate the role of the Clean Vehicle Rebate Project in meeting the state’s zero-emission vehicle goals.
