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February 1 2019

Colorado Follows California Mandates on Electric Vehicles

by Amy Cooke

 

“It's a scientific fact that if you stay in California you lose one point of your IQ every year.”      

Truman Capote

How far will California drive Colorado public policy?

Colorado is two states and a thousand miles from Sacramento, but based on recent public policy, you’d think Colorado residents were living along the Pacific Coast Highway instead of the Front Range of the Rocky Mountains.

In fact, our drive toward California has gotten so extreme that state lawmakers are addressing it at the Legislature. In a recent State Senate floor debate, Republican Rob Woodward offered an amendment to go full California.

Instead of beating around the bush, the amendment makes it clear that we intend to disregard the voters of Colorado and abdicate our presidential choice to the state of California. We vote for whatever president California chooses, Woodward argued on a bill to change how Colorado awards its electoral votes.

The comment elicited chuckles from both sides of the aisle proving Danish comedian Victor Borge’s observation “…humor is truth” to be true.

While the statement and Woodward’s amendment may have been tongue-in-cheek, the policy implications are not. Nothing proves this more than Colorado’s mandated rules on electric vehicles (EV), which all but surrender our regulatory sovereignty to the powerful but unelected nine-member California Air Resources Board (CARB).

Thanks to Executive Orders from outgoing Governor John Hickenlooper and recently elected Governor Jared Polis, we Colorado residents are now tethered to the whims of the Golden State.  Governor Hickenlooper specifically cited California in his Executive Order. The directive is for Colorado's Air Control Commission to “develop a rule to establish a Colorado LEV [low emissions vehicle] program, which incorporates the requirements of the California LEV program.”

Neither Hickenlooper or Polis bothered to ask voters, or even go through the state legislature. Load up your Nissan Leaf, the 21st Century family truckster.  It’s California or bust!

Before diving into the new EV mandates, a few facts about EVs in Colorado:

  • Colorado’s “typical EV buyer,” according to the Colorado Energy Office’s (CEO) 2015 Electric Vehicle and Infrastructure Readiness Plan identified those earning more than $100,000 annually, having a bachelor’s degree or higher, owning two or more vehicles, and aged 38–78 years,” as the key target market for electric vehicle purchases.
  • That $100,000 is 44 percent higher than Colorado’s current real median household income $69,117.
  • According to a July 2017 National Renewable Energy Lab (NREL) report, over 90 percent of Colorado’s EVs are heavily concentrated in 10 Front Range counties with the vast majority in Boulder, Denver, Jefferson, Arapahoe, Douglas, Larimer, and El Paso counties, some of the state’s wealthiest counties.
  • Because of who buys EVs and where they live, low income and rural Coloradans end up subsidizing urban driving habits of wealthy Front Range residents, while critical infrastructure improvements go unfunded.
  • Even with overly generous taxpayer-subsidized tax credits ($5,000 from Colorado and $7,500 from the federal government), Colorado EV registrations were just over 11,000, less than 1 percent of total vehicle registrations.

The automotive information Web site TrueCar.com commissioned a study that confirms the first point:

The study shows that the average buyer of a regular Ford Focus was 46 years old and had a household income of $77,000 per year, as compared to the annual household income of $199,000 for the average, 43-year-old owner of Ford Focus electric.

TrueCar President John Krafcik told USA Today, “These are really affluent folks.”

Jason Hayes of the Mackinac Center for Public Policy said it best, “the statistics show, pretty convincingly, that if anyone is able to cover those additional costs, it is EV owners themselves.”

Policies offering additional financial rewards, through tax credits or mandates, to EV owners are nothing more than a reverse Robin Hood scheme, taking from the poor to give to the rich.

What will Colorado’s new mandates do?

Governor Hickenlooper’s July 2018 EO directed Colorado’s Air Quality Control Commission (AQCC) to develop a low emissions vehicle (LEV) program that mirrors California’s.

Inside Climate News published a good deconstruction on California’s clean car rules on which Colorado’s new rules will be predicated.

From ICN:

  • CARB “set a mandatory, annual target for each manufacturer to increase its share of zero-emissions vehicles, a mix of plug-in hybrids, battery-electric and hydrogen cars.”
  • Beginning in 2018, California requires that 15 percent of all cars sold in that state must be all-electric, plug-in hybrid electric or hydrogen vehicles. The goal is 500,000 all-electric and hydrogen cars and 900,000 plug-in hybrids traveling California’s highways.
  • If auto manufacturers miss their target, they can purchase credits from smaller manufacturers or they can roll over credits if they overshoot their target in a prior year. (Currently only Tesla can sell credits)
  • If they fail to meet their targets all together and don’t purchase credits, manufacturers can be fined $5,000 per vehicle.
  • Conventional gasoline cars must slash emissions 50 percent by 2025.
  • They did not include a mandate for consumer demand, which can leave auto dealers with cars no one wants.
  • CARB estimates that by 2025 new regulations will add up to an additional $1,900 to the cost of a new car whether conventional or alternative fuel.
  • By 2020, an electric vehicle will cost $12,900 more than an average gasoline-powered vehicle.
  • Clearly some of this has changed in the last six plus years but you get the gist. Cars in Colorado will get much more expensive.

While the first EO addressed only LEVs (i.e. hybrids), everyone knew that Zero Emissions Vehicles (ZEVs) or plug in electric vehicles were next. Two weeks after being sworn into office, on January 17, 2019, Democrat Governor Jared Polis issued an EO for ZEVs. The goal is 940,000 EVs on Colorado roadways by 2030. To get there, Colorado auto dealers will have sell roughly 75,000 EVs per year, buy credits, or pay fines. We don’t know all the details yet, but those are the rules in California.

What will be the effect?

Here’s the cliff notes version: cars in Colorado will get much more expensive. Low income traditional car buyers will subsidize expensive EVs and Telsa credits. And crucial traditional budget items like roads, education and healthcare will have to compete with EV infrastructure for funding.

If Colorado adopts California’s standard, Tim Jackson, the president of the Colorado Automobile Dealers Association (CADA), believes the price of a new vehicle will increase by at least $2,110 because of new taxes. And, the new standards likely will increases the price of used vehicles.

Furthermore, 71 of every 100 vehicles sold in Colorado are traditional combustion engine trucks. For reasons unique to each buyer, consumers living in Colorado simply do not want to purchase low or zero emissions vehicles. However, in order gin up more interest and be able to sell all of their available vehicles, dealership owners are forced to raise the price of their trucks and other best sellers, so they can reduce the price of vehicles that meet emission standards.

CADA also argues that higher costs will drive Colorado car buyers to purchase their vehicles in neighboring states.

There is resistance.

On Tuesday, Colorado Politics reported that CADA filed a lawsuit against the AQCC to “overturn the recently adopted vehicle emission regulations based on standards set by California.”

CADA argues “that the state violated constitutional requirements and skipped steps in the rule-making process by reaching what the lawsuit describes as a predetermined outcome based on an executive order issued last year by then-Gov. John Hickenlooper.”

The pre-determined outcome may be based, in part, on Hickenlooper’s close relationship with Tesla Board members and majority shareholders Elon and Kimbal Musk, which finds him in some ethical hot water. Right now, Tesla is the only company that sells the ZEV credits Colorado auto dealers may have to purchase. According to reports, the Colorado Ethics Commission is investigating the former Governor for accepting exclusive travel accommodations from the Musk brothers, which has the appearance of a quid-pro-quo.

In a few weeks testimony for and against a bill from Republican State Senator John Cooke* prohibiting the “air quality control commission from adopting…the California motor vehicle emission standards” is expected to be heard in committee.

Tim Jackson is likely correct regarding the pre-determined outcome. But before lawmakers and judges make their final decisions, let’s hope they consider the words of California native Quinn Wolfe, environmental activist and founder of CAFE (Californians Advocating for the Environment):

The problem is that the mandate is yet another transfer of wealth to the wealthy. It redirects tax dollars to subsidize the manufacture of Teslas at the expense of essential services like education, police and fire. It undermines the programs we can least afford to cut, while it rewards the very individuals who can afford just about anything.

Also, let us disabuse ourselves of the notion that an EV is a green automobile. Not when it takes 2,240 kilograms of steel, plastics, and rubber to produce a Tesla Model S. Not when it costs so much green to buy a car that is not even available in green.

Consider, too, the disconnect between California’s Zero Emissions Vehicle credits and owning an EV. These “credits” are more a credit to very creative accounting than accountability in government, since an EV would have to rack up over 1 million miles to equal the value of its ZEV subsidy. Never mind the electricity necessary to charge — and recharge — an EV, which does nothing to lower utility bills or improve the environment.

One thing seems certain at this point, putting California in the driver’s seat for Colorado public policy won’t be cheap.

Editor’s note: John Cooke is the husband of the author Amy Oliver Cooke

 





Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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