Tag Archives: California

Insight, Opinion, Vehicles

Electrify California

Last week, the California Air Resources Board (CARB) passed a plan that requires all new passenger cars and light trucks sold in the state to be electric vehicles or plug-in electric hybrids by 2035.

Five days later, California is telling people not to charge their electric vehicles due to a heat wave that is hitting the state over the next several days.

I’m left scratching my head wondering what in the world is going on. California cannot even get their power grid under control, and yet they want to ban all new sales of gas-powered cars and light trucks within the state in the next thirteen years. This seems like a huge stretch. Possible? Anything is possible. Likely? I highly doubt it.

California averages around 2 million new car sales a year according to the California New Car Dealers Association (CNCDA). In 2017 and 2018, California sold over 2 million new cars. With Covid hitting, California new car sales dropped slightly by 2020 down to 1.6 million, however went up to 1.8 million in 2021. According to the CNCDA, California is expected to either exceed 2 million new car sales by the end of 2022 or come extremely close to that mark. According to Wikipedia, as of December 2021, cumulative plug-in car registrations in the state since 2010 totaled 1.072 million units. So, while California sells an average of 2 million new cars per year, it’s taken them 11 years to sell just 1 million electric cars, some of which are undoubtedly hybrids.

California sells more EV’s than any other state in the union. According to Inside EV’s, plug-in vehicle registrations in 2021 increased by about 79% year-over-year to 237,618, which is 12.8% of the total market. There’s no doubt that Californians are adapting to electric vehicles. The issue here is that CARB’s plan to make all new car and light truck sales fully electric by 2035 puts sales of EV’s into overdrive at a rate that I’m not so sure their grid can keep up. The sales of EV’s going into 2035 is going to come in phases.

35% percent of new cars and light trucks sold in the state must be zero-emission, plug-in hybrid or hydrogen-powered vehicles by the year 2026. The sales of these vehicles will increase to 68% by the year 2030 and will end up at 100% by the year 2035. To put that into perspective, if California stays at selling 2 million cars per year through 2035, that means by 2026 they must be selling 700,000 EV’s or hybrids per year, 1.36 million by 2030, and a full 2 million by 2035. In order to be able to do this, California is going to have to go through a huge overhaul in their electrical infrastructure. Not only that, but a ton of electrical stations are going to have to be put all over the state to accommodate for those who travel.

According to The Sacramento Bee, there’s plenty of concern from experts concerning such a fast transition into a full EV market within the next decade. Among them: that electric cars will be too expensive, charging stations won’t be plentiful, and an all-electric fleet will put additional pressure on the state’s fragile power grid. According to the article, the Western States Petroleum Association said, “electrification of the transportation sector will increase demand by around 300,000 gigawatt-hours statewide,” which would amount to doubling electricity demands.

However, officials from the California Energy Commission are pushing back against this idea saying that, charging electric vehicles will “add only a small amount of demand onto the grid” and they believe that electricity demand is forecasted to make up less than 3% of energy use during peak hours in 2030. I just find that simply ironic since they are telling people right now to not charge their electric vehicles because of demands, but here in 8 years everything is going to be fine and will make up only about 3% of the total energy use. Can California revamp their electrical infrastructure that fast? The demand is only going to increase year after year as more people buy EV’s. At some point, every household in California will have at least 1 EV. Some may have 2. Some people with kids may have more. Millions upon millions of EV’s charging at the same time has got to put a strain on the electrical grid. You can say goodbye to your electrical discount that most providers give during overnight hours when demand is low.

Another major issue if America’s power grid itself. New technology has increased the need for electricity over the past couple decades including cell phones, tablets, tech watches, and much more. According to an article by The Wall Street Journal titled “America’s Power Grid Is Increasingly Unreliable”, the U.S. electrical system is becoming less dependable, not more. According to the article, the pace of change, hastened by market forces and long-term efforts to reduce carbon emissions, has raised concerns that power plants will retire more quickly than they can be replaced, creating new strain on the grid at a time when other factors are converging to weaken it. Also, according to the article, large, sustained outages have occurred with increasing frequency in the U.S. over the past two decades. In 2000, there were fewer than two dozen major disruptions, the data shows. In 2020, the number surpassed 180. To be fair, the article does say that aging power lines and climate change, if you believe in that, are factors to the increased outages. However, it does say that going green is also a cause.

California is just one of many states that are committed to going fully electric over the next decade or so. The demand to change at such a rapid pace will undoubtedly have its challenges. California already has enough problems trying to keep the lights on during major heat waves and other situations of electrical high demand. To execute a major overhaul of the California’s entire electrical infrastructure within the next 13 years to support the millions upon millions of EV’s coming into the market is going to be extremely tough. Extremely is an understatement. Can they do it? It’s possible, but it doesn’t seem probable.

California should have started increasing their grid long ago before demanding that its citizens convert to fully EV’s over the next decade. Instead, they took the backwards route and are demanding that its citizens convert to EV’s before even having an infrastructure to support them. California only has about 3.5 years to make a significant change before tons of new EV’s come pouring into the market when the 35% mark of all new car sales must be EV’s becomes a reality. My guess is that by 2035, with all the demands that California is making, EV’s in the state will explode to 10+ million. That’s a huge increase from the 1 million they have now. California has their work cut out for them. I wish them the best of luck, but I won’t be surprised if this is one of the worst failures in modern American history.

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Politics

The Not So Golden State

With the recall of Gavin Newsome over, and his retaining of the Governor’s seat, I’m quite surprised. I think that I would have been less surprised if another Democrat had challenged his seat and won. I’m surprised because the state of California is in a mess. California has problems, and not little ones either.

California is currently in a loosing battle with it’s economy and it shows no signs of slowing down while Newsome is in office. I’ll look at just a few of the problems that they are having and give you, my solution.

For a state like California to remain a powerhouse in the economic game, it must have businesses. Since Californica is the most populous state, businesses are the very key that keep the state running. California takes it’s cut in revenue from the business through taxes. It also takes a cut from what the employees of those businesses make. A business must make enough money to pay their taxes, pay their employees, and make a profit. If it can’t then either the business closes shop or moves to a location where it can come out on top. This seems to be what businesses in California are doing.

According to Forbes, not only are major businesses fleeing the state, so are it’s residents. This makes sense. A person needs a job to stay afloat. If jobs leave, then so will the residents. If there are no jobs, then naturally people will move to where there are jobs. In 2020, California’s population decreased for the first time in recorded history. California lost so many people that it lost a congressional seat as well. Between 2000 and 2020, California lost 2.6 million people to other states. That’s incredible, and not in a good way, because California has a history of increase. From 1850 to 2010, California grew by 10% or more in each one of those decades.

Lee Ohanian and Joseph Vranich, of the Hoover Institution, wrote an article on why companies that were Headquartered in California are choosing to leave in unprecedented numbers. What’s amazing is the increase in speed at which companies are leaving. They found that companies are leaving at record speeds and are showing no signs of slowing down. In their report, which was conducted from January 2018 to June 2021, they recorded 265 business that were Headquartered in California, had relocated to other states. In 2018, 58 companies left the state. In 2019, it was 78. In 2020, it was 62. And in just the first 6 months of 2021 from January 1st to June 30th, a whopping 74 companies have already left the state. This is a huge deal for California and it’s also very concerning.

You can read their full report here.

You can also read a summery of their report here.

California has the highest tax rates in the country, and this seems to be the number one reason that companies are leaving. Fleeing to another state like Texas or Tennessee, which have no state income tax, can potentially save a company millions of dollars in revenue. These millions can in turn be used for higher wages, opening of new businesses, and hiring quality employees. It makes sense for a company to relocate to a state that has no state income tax or one like North Carolina which has the lowest corporate tax in America at just 2.50%.

Taxes are not the only reason that people are leaving the Golden State in record numbers. Cost of living is another big reason. Without question, California is one of the most expensive states to live in out of all states. Housing takes up the bulk of the cost of living, but other things such as utilities, transportation, food, regulations, and again, taxes like state and property taxes take up a massive amount as well. Fool.com has an excellent resource for finding what the typical home price in every state is. You might not be surprised; California comes in at #1 for the most expensive housing prices in the continental United States. The typical cost of a home in California is $683,996 which is 233% of the typical U.S. home price. Compare that to Texas, where most businesses are fleeing to, and the typical cost of a home drops dramatically to $247,210, which is only 84% of the typical U.S. home price. You can literally buy two homes in Texas for less than the cost of one home in California and still have $135,576 left over and avoid all state taxes since Texas has none.

As far as all other resources are concerned, numbeo.com has one of the best cost of living sites around. They claim to be the world’s largest cost of living database and you can compare most cities in California to almost any other city within another state. You can compare cost of living expenses such as restaurants, markets, transportation, monthly utilities, sports and leisure, childcare, clothing and shoes, rent, salaries, etc. Each category has different examples of the costs of certain items and compares the cost between the two cities and gives you the percentage difference. It’s an excellent resource and I encourage you to go and check it out.

Let’s talk about the homeless population for a minute. It shouldn’t be a surprise to anyone that California has the highest population of homeless citizens in the United States. When a state has the highest costs of literally everything such as housing, gas, taxes, food, etc., we shouldn’t be surprised that so many people can’t afford these things and therefore go homeless. According to The United States Interagency Council on Homelessness, as of January 2020, California had an estimated 161,548 experiencing homelessness on any given day. Of that total, 8,030 were family households, 11,401 were Veterans, 12,172 were unaccompanied young adults (aged 18-24), and 51,785 were individuals experiencing chronic homelessness. Public school data reported to the U.S. Department of Education during the 2018-2019 school year shows that an estimated 271,528 public school students experienced homelessness over the course of the year. Of that total, 11,021 students were unsheltered, 19,758 were in shelters, 14,386 were in hotels/motels, and 226,363 were doubled up.

You can read their full report here.

The more and more homeless people that California creates, the more and more problem mount. Two of the biggest are that of trash and feces. With no place to throw their trach, homeless people just throw it onto the streets that don’t get cleaned very often or at all. The more and more that trash piles up, the more and more it becomes a concern. It’s a concern because diseases start to come to light due to the piles of trash left sitting everywhere. Typhus, which is considered a medieval disease, has reared its head once again in California. Typhus comes from, you guessed it, trash.

Feces is another huge problem that comes from the homeless. These people have no where to use the restroom, so the local streets become their “dumping” ground so to speak. Human fecal matter then goes down storm drains and then pollutes area lakes, rivers, and creeks. People swim in the lakes and rivers and then end up getting bacterial infections and diseases. The problem is so bad that the Environmental Protection Agency has gotten involved in trying to do something about the situation.

These are just a few of the reasons that California needs new leadership. Certainly, people don’t want to live this way or pay the high cost of living that’s associated with California. Gavin Newsome may be a great guy in person, but his leadership skills are the worst in the nation. My fear is that he is not doing anything to stop the rising cost of living, diseases, businesses, and people that are leaving. If things keep trending the way that they are, in a few years, California might just be a barren wasteland of a state.

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