California governor’s stimulus plan includes $1.5 billion to boost electric and hydrogen vehicles

Source: By Lora Kolodny, CNBC • Posted: Thursday, January 7, 2021

Tesla and other electric vehicle makers stand to benefit handsomely if California passes Governor Newsom’s proposed $4.5 billion 2021 budget for economic stimulus in the state.

The 2021 proposal, which Newsom previewed on Tuesday, includes $1.5 billion earmarked to help people and businesses purchase electric or hydrogen vehicles and equipment, and to invest in construction and maintenance of charging and fueling infrastructure, which would be needed to support expanded use of these vehicles in the state.

Newsom’s proposal also dedicates $300 million to maintenance and “greening” of state infrastructure, and would allow installation of electric vehicle charging stations at all state-owned facilities. That could include charging stations from the likes of Tesla, ChargePoint, Electrify America(part of the Volkswagen Group) and Volta Charging.

After a year of extreme wildfires harming his constituents and the California economy, Newsom has said many times over that he views pollution and climate change as an emergency that requires immediate action.

To that end, in September 2020, the governor signed an order banning sales of new internal combustion engine vehicles in California by 2035. The order would still allow gasoline vehicles to be owned and sold on the used-car market but could ostensibly help reduce greenhouse gas emissions by making these vehicles more scarce.

The newly proposed 2021-2022 budget could benefit any makers of electric and hydrogen vehicles selling used or new vehicles in California, and there are more than ever coming in 2021.

According to AutoForecast Solutions Vice President of Global Vehicle Forecasting, Sam Fiorani, in the next year alone, eleven new North American-built electric vehicles are expected to enter the domestic market, along with an updated Tesla Model S.

Imported EVs are also poised to sell stateside, including in California. These include the Nissan Ariya, Volkswagen ID.4 and others.

Fiorani noted, “Most of the next-wave of electric vehicles will be crossovers, however the pickup wave is just beginning,” with Ford, Rivian and others’ pickups hotly anticipated, along with Tesla’s eventual Cybertruck.

Tesla stands to benefit from other elements of Newsom’s proposal, too.

The governor has said the state should expand “interest-free payment options for larger businesses particularly affected by significant restrictions on operations due to Covid-19,” and suggested $430 million in incentives and grants for businesses that “locate in California to stay, grow and create quality full-time jobs in the state” and to “support job creation and investments in infrastructure.”

He is expected to unveil a full version of his budget proposal on Friday this week.