California Has a Plan to End the Auto Industry as We know It
Comment of the Day

August 03 2015

Commentary by David Fuller

California Has a Plan to End the Auto Industry as We know It

Here is the opening of this informative article from Bloomberg:

Sergio Marchionne had a funny thing to say about the $32,500 battery-powered Fiat 500e that his company markets in California as “eco-chic.” “I hope you don’t buy it,” he told his audience at a think tank in Washington in May 2014. He said he loses $14,000 on every 500e he sells and only produces the cars because state rules re­quire it. Marchionne, who took over the bailed-out Chrysler in 2009 to form Fiat Chrysler Automobiles, warned that if all he could sell were electric vehicles, he would be right back looking for another govern­ment rescue.

So who’s forcing Marchionne and all the other major automakers to sell mostly money-losing electric vehicles? More than any other person, it’s Mary Nichols. She’s run the California Air Resources Board since 2007, championing the state’s zero-emission-vehicle quotas and backing Pres­ident Barack Obama’s national mandate to double average fuel economy to 55 miles per gallon by 2025. She was chairman of the state air regulator once before, a generation ago, and cleaning up the famously smoggy Los Angeles skies is just one accomplish­ment in a four-decade career.

Nichols really does intend to force au­tomakers to eventually sell nothing but electrics. In an interview in June at her agency’s heavy-duty-truck laboratory in downtown Los Angeles, it becomes clear that Nichols, at age 70, is pushing regula­tions today that could by midcentury all but banish the internal combustion engine from California’s famous highways. “If we’re going to get our transportation system off petroleum,” she says, “we’ve got to get people used to a zero-emissions world, not just a little-bit-better version of the world they have now.”

David Fuller's view

This is tough love for automobile companies.  They will struggle to adapt and the costs will be high, at least initially, as we know from Sergio Marchionne’s remarks above.  However, cleaning up our planet has to be one of our most important policies.  It is not only a measure of our civilization, but also a key to our species’ long-term survival.

Mary Nichols is smart, successful and growing influence internationally.

Here policy on fuels is another long-term blow for the crude oil industry.     

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