Toyota’s CEO said California and 16 other states semi-national mandate that 35% of 2026 model year vehicles be zero-emission or electric is “impossible” to meet.

According to Toyota’s North America COO Jack Hollis, “I have not seen a forecast by anyone … government or private, anywhere that has told us that that number is achievable. At this point, it looks impossible.” “Demand isn’t there. It’s going to limit a customer’s choice of the vehicles they want.”

This is what we have been saying for years. 

One example of not making the mandate us from Stellantis, maker of Jeep, which made gasoline-powered non-hybrids available only as a special order vehicle in California and other states that have adopted California Air Resources Board Standards. This has hurt Stellantis and the result are the latest job cuts follow last week’s lay off announcement of 1,100 UAW-represented employees at the automaker’s Toledo South Assembly Plant in Ohio. This is where they built the Jeep Gladiator.

Under California’s Advanced Clean Cars mandate that starts with model year 2026 vehicles, automakers must either sell enough cars or buy enough credits for the equivalent of 35% of their vehicles sold in California to qualify as zero emission vehicles, of which up to 20% can be plug-in-hybrids and at least 15% of which must be all-electric. Automakers will pay a $20,000 fine per ZEV credit they are short, meaning carmakers will have to either buy credits from other automakers with excess credits, or sell fewer non-ZEV vehicles. Which means are will get more expensive. The car makers will not absorb these costs.

The Advanced Clean Cars mandate applies to Massachusetts, New York, Oregon, Vermont, and Washington for model year 2026, and Colorado, Delaware, Maryland, New Jersey, New Mexico, Rhode Island, and Washington, D.C. for model year 2027.

No car maker will make cars for one state so all states will get more expensive cars. 

One challenge for EVs in California is the high cost of electricity, the high costs are across the country. 

Energy prices are so high the California Air Resources Board says the state is near the point at which it’s cheaper to propel a car on gasoline than it is on electricity. Last week, CARB voted to create a $105 billion credit for EV charger operators to be paid for with rising carbon emissions fees on the petroleum refineries that produce gasoline and diesel. CARB estimates the measure will create a 47 cent per gallon pass-through cost for gasoline in 2025. 

California also added a 68 cents per gallon tax that is going into effect at the first of the year. They are making gas and hybrid powered vehicles unaffordable. 

The state believes by raising the price of gasoline, and subsidizing electric vehicle charging, CARB’s new Low Carbon Fuel Standard incentivizes more Californians to get out of gasoline-powered cars either acquire electric vehicles or take public transportation. This will not work, it just angers residents. I’m sure Massachusetts, New York, Oregon, Vermont, Colorado, Delaware, Maryland, New Jersey, New Mexico, Rhode Island, and Washington, D.C. and Washington will plan to do the same thing foolishly.

California is able to pass its own emissions standards via a waiver granted by the Environmental Protection Agency, which first granted California a waiver to deal with smog pollution in the Los Angeles area in the latter half of the 20th century. The Obama administration ordered an expansion of California’s waiver just pollution to include emissions as well. In 2019, the Trump administration revoked California’s EPA waiver, a move that was held up in courts until the Biden administration put the waiver back into place in 2021.

It’s likely that the second Trump administration could revoke California’s EPA waiver once it takes office in January, which would — if upheld in court — invalidate many of the emissions programs created by California and the other states that follow.

We will be watching and reporting.

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