FOR IMMEDIATE RELEASE                                                  CONTACT: Brooke Armour
June 23, 2025                                                                                            (916) 553-4093

ZEV Mandates Still Threaten California Consumers Regardless of Court Challenges

CBRT launches The California Brief Substack to provide a deep dive into policies, regulations, and legal challenges that drive up the cost of living and doing business in California

Today, California Business Roundtable President Rob Lapsley launched the new "The California Brief" Substack, which will be used to explain how policies drive up the cost of living in California, as well as give a deeper dive on policy, regulation, and legal issues facing the California business community and residents. The first commentary published today takes a closer look at the state's Zero Emission Vehicle mandate authorized under the Advanced Clean Cars II regulations and the significant impacts they will have on California consumers, as well as a look at the governor's new Executive Order on a new Advanced Clean Cars III mandate. 

Key findings include:

• While California is fighting in court for its right to implement the 2035 ZEV mandate, regardless of the year delay in enforcement, the policy is not a decade away; it is right around the corner.

• CARB quietly delayed by a year the implementation of the ZEV mandate. 

• While much of the public believes California’s ban on new gas-powered cars begins in 2035, the real start date is now the 2027 model year (about a year away).

• The California Air Resources Board’s Advanced Clean Cars II (ACC II) regulation mandates that 43% of 2027 model year vehicles sold in California must be zero-emission vehicles (ZEVs).

• To meet the revised 2027 target, California would need to increase ZEV sales by about 50% from current levels — rising from approximately 23% today to 43% in less than 24 months.
• California would have to sell about 735,000 ZEV vehicles in 2027 to meet the mandate—a whopping 66% more than were sold in 2024.

• Manufacturers that don't hit the 43% mandate by 2027 have only three years to make it up. After that:

  • They face penalties of up to $23,000 per non-compliant vehicle under Health & Safety Code §43211.
  • Other penalties under separate statutes can reach $42900 per violation.

Using expected 2027 new vehicle sales assuming no change from California New Car Dealers Association 2025 projections and ZEV market share that has been little changed over the past 8 quarters, total penalties would be up to an estimated $6.9 billion in 2027, rising to $10.4 billion in 2028.

“Despite the ongoing legal fight, California consumers and our economy remain exposed to the cost impacts of these mandates,” said Rob Lapsley, president of the California Business Roundtable. “This is another example of how far-reaching policies crafted by unelected agencies can create massive economic ripple effects that are not understood by the public.”

The report explains how well-meaning goals can quickly become costly mandates when handed over to unelected state agencies. California’s ZEV mandate originated with an executive order from Governor Newsom and was later expanded by the California Air Resources Board without approval or oversight from the Legislature. As a result, these regulations now carry steep penalties and far-reaching economic consequences, with little public accountability.

To read the full report and subscribe, visit Rob's Substack. 

# # #