California sets a bold target for EVs by 2035 — here's what needs to happen now

Regulators in the state of California approved a policy that will ban the sale of gas-powered cars in the state by 2035. While this is a bold move from a policy perspective, there are major hurdles in making this a reality, NPR reported Saturday.

California has already shown its zeal toward a zero-emission future by regularly achieving its energy demands through renewables this year. As the country's single largest auto market, California can also lead the way in the transition to electric transportation.

Last week's policy decision makes the regulators' intent clear when it comes to reducing carbon emissions from the transportation sector. However, the regulators are calling for a massive transition that requires a major overhaul of many components that make up the automotive industry. Here's a quick look at them.

Supply of EVs

Californian residents may be known for their pro-environmental views and openness to new technology. However, all the enthusiasm amounts to nothing when there aren't enough electric vehicles (EVs) available in the market.

As NPR reported, despite strong demand for EVs in the state, the actual sale of EVs accounted for only three percent of total car sales. This means that the likes of Tesla, Rivian, or even Ford, with their brand new electric models of popular cars, are far behind in building up their production capacities.

Price of EVs

Even if the auto companies were to overnight ramp up production capacities, the current prices of EVs, at $66,000 on average, put them out of the population's reach at large.

Under measures to reduce inflation, the U.S. now allows for a $7,500 tax credit if car owners opt for an electric vehicle rather than a gas-powered one today. However, that does not entirely remove the car's high cost. Fuel prices may be record-high today, but the price of an internal-combustion engine-powered car is far lesser, making it more affordable to buyers.

Cost of components

One primary reason why EVs cost so high is that the manufacturers are looking to recover their initial investments with the high-value cars while also funding the development of low-cost vehicles in the future. California's new policy does not give these companies enough time to recover their costs while further pressuring them to reduce their prices.

The second primary reason why EV makers can't bring down the prices of their cars yet is that the batteries, the critical component of EVs, still cost a bomb. Experts told NPR that the cost of an EV battery today is more than what it takes to make an internal combustion engine and is only expected to come at par by 2025.

Lack of Access

To reduce the cost of batteries, carmakers in the U.S. need access to rare earth minerals and reduce their dependence on China for processing components like lithium. Shifting suppliers in this domain are far easier said than done, especially when the markets are ready to pay through the roof to access them, which Elon Musk has also acknowledged.

Unprepared workforce

When the problems of components and their prices are solved, automakers face the other challenge of a workforce that needs to learn new skills to radically get the EVs into production. For decades, automotive companies have relied on one technology and its accompanying skills, and the shift to EV requires a whole new skill set, which its workforce may not adapt rapidly.

Even if it were to lay off its old workforce, automakers would struggle to find sufficient numbers of personnel to take up large volume assembly of its EVs, creating a massive bottleneck in production.

Without enough cars in production, there won't be enough EVs on the road either. How California addresses all these issues remains to be seen.