Electric Car Quotas Have a High Cost

Source: By C. Boyden Gray, Wall Street Journal • Posted: Tuesday, January 26, 2021

California wants to do it, and Biden wants to help—even though it will violate the law and cost us all.

Electric cars recharge in a parking garage in Irvine, Calif., Jan. 26, 2015. Photo: lucy nicholson/Reuters

President Biden can’t mandate that we all drive electric cars, but he’s opening the gates to an electric Trojan horse. In a day-one executive order, Mr. Biden began the process of rescinding a Trump administration rule, the first step toward greenlighting California’s electric car agenda. California and like-minded states plan to impose electric cars through production quotas—whether drivers want the cars or not.

California regulators call it a “zero-emissions vehicle” standard, but green propaganda shouldn’t obscure what’s really going on. Start with federal law. It requires the transportation secretary to set national average fuel-economy performance standards for car makers at the “maximum feasible” level without restricting consumer choice. Instead of mandating a given technology, federal fuel-economy standards allow car makers the freedom to decide how best to improve fuel economy at the lowest cost.

To promote efficiency, federal law broadly forbids state regulations “related to fuel economy standards.” Courts have held that this law forbids electric car quotas and similarly meddlesome command-and-control policies that seek to dictate how car makers should meet federal performance standards. The Golden State argues that a special exception made for California regulations in the Clean Air Act should also be read into the federal fuel-economy law. But that law’s text says no. It forbids fuel-economy regulation by any state—no exceptions.

Next, the policy. Congress pre-empted state laws in 1975 because sprinkling policies like state electric car quotas on top of federal fuel-economy standards makes no sense. An electric car quota in California would force car makers to meet national fuel-economy standards using one of the most expensive fuel-efficiency technologies, undermining consumer choice and increasing costs. One study from 2019 estimates that state electric car quotas will cost an extra $400 for every new car nationwide by 2025.

Those costs won’t be distributed equally. The zero-emission vehicle standard is in effect a hidden regressive tax paid by ordinary car buyers to subsidize luxury cars for the wealthy. It takes $400 from the wallets of low- and moderate-income car buyers and hands it over primarily to six-figure-income electric car buyers, who enjoy many other subsidies, too.

Less directly, the electric car quota fuels African child labor, conscripted to mine the minerals used in electric car batteries. And because China dominates those battery supply chains, state quotas will speed up the exodus of blue-collar manufacturing jobs in Michigan, Indiana and Ohio to coal-powered Chinese plants, undermining the environmental rationale for the quotas.

California’s central planners cast electric car quotas as a step toward a carbon-free utopia, but they do nothing quantifiable to reduce carbon emissions. Federal fuel-economy law already sets stringent average standards for national fleets. The key word is average. Car makers can offset every “clean” electric vehicle produced to meet a state quota with a “dirtier” car. In other words, for every mandated electric car, car makers can and will sell an equal and opposite gas-guzzler and still meet the federal fuel-economy standard.

Meanwhile, by making new cars more expensive, electric car quotas encourage drivers to keep older and dirtier cars on the road, increasing pollution. California politicians assume away these inconvenient truths. They also assume an electric grid that works—a lot to ask of California these days.

California’s costly and regressive car quota isn’t laudable state experimentation. It is a Madisonian nightmare, a state-sponsored regulatory cartel meant to advance the interests of California’s dominant factions at great national expense. Why balkanize the car market into petty sovereignties governed from Sacramento? As America’s chief executive, Mr. Biden should faithfully protect the supremacy of the nation’s federal fuel-economy law.

Mr. Gray has served as White House counsel, U.S. ambassador to the European Union and U.S. special envoy to Europe for Eurasian energy.