๐๐ Say Goodbye to Gas-Powered Cars in 2035
Happy Hump Day everyone,
Iโm in LA for work and am currently sitting in a Japanese hand-roll place. And guess what!? The guy who works here is a reader of Hump Days! His name is Eddie. Shoutout Eddie. Thank you to everyone that reads this publication. So incredibly grateful.
Enjoy this weekโs Hump Days!
- Humphrey, Rickie & Tim
In the Markets
Featured Story
In a sweeping plan signed off by the California Air Resources Board, it was determined that by 2035, all new passenger cars and light trucks sold in the state be electric vehicles or other emissions-free models. Other governments around the world have tried to incentivize the migration away from gasoline-powered vehicles but California made history by creating a concrete plan completely phase out the sale of these kinds of vehicles.
This move likely sets into motion a wave of legislation to accelerate the transition to EVs by other states given that California is the nationโs largest auto market and that other states often follow their lead. As things currently stand, ~16% of all new car sales in California are zero-emission vehicles. The new rule requires that the benchmark rises to 35% by 2026, 68% in 2030, and 100% in 2035.
The rule does not force Califoniaโs car shoppers to buy these vehicles but instead creates fines for automakers who fail to comply with the targets. Experts believe that the penalties are high enough that automakers will go along with the new mandates, and Califonia has a good track record of enforcing its rules.
State regulators estimate that the new rule will reduce greenhouse gas emissions from passenger vehicles by more than 50% in 2040. The reduction amounts to eliminating 395M metric tons of greenhouse gas emissions or the equivalent of 915M barrels of oil.
States such as New York, Massachusetts, and Washington have already signaled they will also adopt the 2035 ban on internal combustion engines, which is significant because these states with the inclusion of California account for 1/3 of the U.S. auto market. In the words of Governor Gavin Newsom, the ban is โone of the most significant steps to the elimination of the tailpipe as we know it.โ
Weekly News Roundup
California is Banning New Gasoline-Powered Cars by 2035 (Yahoo)
The California Air Resources Board signed off on a sweeping plan requiring that by 2035, all new passenger cars and light trucks sold in the state be electric vehicles or other emissions-free models. California, the nationโs largest auto market, currently sees zero-emission vehicles at ~16% of all new car sales. The new legislation requires that the benchmark rises to 35% by 2026, 68% in 2030, and 100% in 2035.
TC: Generally not in favor of government distorting true supply/demand dynamics.
HY: I think this is the right move for a more sustainable future but shouldโve been implemented 20 years ago lol. I also agree with Tim - it is a lot of intervention and not exactly laissez faire.
Japan Pledges $30B in African Aid at Tunis Summit (Reuters)
On Saturday, Japan pledged $30B in aid for development in Africa, saying it wants to work more closely with the continent. Prime Minister Fumio Kishida said Tokyo would work to ensure grain shipments to Africa amid a shortage. Kishida said the $30B would be delivered over three years, promising smaller sums for food security in coordination with the African Development Bank.
RH: This move and similar moves by China scream modern day colonialism to me. Africa has some of the richest stores of natural resources, especially when it comes to electric vehicles, and many countries want in on their development.
Germanyโs Gas Storage Facilities Filling Up Faster Than Planned (Reuters)
Germanyโs gas storage facilities are filling up faster than planned, Economy Minister Robert Habeck said, giving hope that Europeโs biggest economy could avoid acute gas shortages this winter. The goal to reach 85% storage capacity by October could be reached by the beginning of September. Germany is ahead of schedule on their three-stage emergency plan formulated after a reduction in gas flows from Russia, its main supplier.
RH: Major win for Germany as Russian gas accounted for 55% of their total consumption last year.
HY: Also good for international oil prices I would have to think.
Chart of the Week
In just the past week, Gazprom (Russiaโs largest nat gas company) has halted supply to Italy, Germany, and France. Not only that, but theyโve also decided to completely shut down Nord Stream 1 for three days.
According to one expert, โEurope is sort of bracing itself for things to get worse before they can get better. The big question is just how worse will they get.โ