Legislation could also help to push electric vehicles ahead in the market, and this is already happening in California. Governor Gavin Newsom announced this week that the state will aim to prevent sales of new gasoline passenger cars and trucks by 2035. The proposed ban will help California to cut its emissions by up to 35%.
Despite Tesla Inc. (NASDAQ: TSLA) becoming the most valuable publicly traded automotive company in America, electric cars still only make up a small percentage of all car and truck sales.
This will change in the coming years, with electric vehicle sales increasing at a compound annual growth rate of 8.4%. With more models becoming available from major producers, and Tesla’s promise to deliver an electric car at just $25,000 within the next few years, consumers will be more willing to make the transition from gas.
California Big Changes in America’s Most Valuable State
California is recognized as an economic power and for its leadership on effective policy. Thirteen other states, including New York, Washington, Maryland, Massachusetts, and New Mexico, follow California’s strict emissions standards.
With California likely to ban the sale of new gasoline vehicles by 2035, the states that follow its leadership are likely to do the same.
Similar policies are being applied overseas. Germany, France, and Norway were some of the first to introduce legislation that will eventually ban sales of new gasoline vehicles.
California is committed to using 100% renewable energy by 2045. This latest policy announcement aligns with that goal.
Used Car Sales Will Still be Permitted
Used gasoline cars that meet emissions standards will still be sold under the proposed rule. Anybody already owning a gasoline vehicle will be allowed to operate it. The state government hopes to make the transition as easy and affordable as possible.
For manufacturers like Tesla, this is big news. Tesla already controls most of the electric vehicle market in America. By 2035, it will have advanced production lines, better battery technologies, and more affordable vehicles in its lineup. Manufacturers like GM (NYSE: GM) and Ford (NYSE: F) are investing heavily in electric vehicle research, but they are far behind Tesla at this point.
With stocks declining sharply this week, Tesla has become more affordable, and it’s worth considering as a long-term electric vehicle investment, especially considering this latest announcement.
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