New York Boosts EV Industry With Mandate to Ban Gas-Powered Vehicles by 2035

New York State Fuels the Adoption of EVs; Other States Could Follow

It looks like the dominos are starting to fall for the U.S. electric vehicle (EV) industry.

Little more than a month after California said it would ban the sale of new gasoline-powered vehicles by 2035, New York State announced the same thing. (Source: “Governor Hochul Drives Forward New York’s Transition to Clean Transportation,” Governor Kathy Hochul, September 29, 2022.)

As with California, the transition will be somewhat gradual. New York will require an increasing percentage of new light-duty vehicle sales in the state to be of zero-emission vehicles. This will start with 35% of sales in model-year 2026 and jump to 68% in 2030 and 100% by 2035.

To make the transition more palatable, New York State is taking a number of initiatives, including a grant for municipalities to purchase or lease zero-emission vehicles and install public EV charging stations. There’s also a $2,000 rebate to help people purchase an EV and $250.0 million in funding to build a statewide fast-charging network.

Chances are good that a large number of other states will soon follow suit. As California goes, so too goes America.

Currently, 18 other states (including New York) have adopted California’s low-emission and zero-emission vehicle policies. (Source: “States That Have Adopted California’s Vehicle Standards Under Section 177 of the Federal Clean Air Act,” California Air Resource Board, May 13, 2022.)

Just days after California announced its 2035 initiative, Washington State said it would also ban new gas-powered cars by 2035, as did Oregon and Virginia.

Other states that have signed on to California’s low-emission and zero-emission vehicle policies include Colorado, Connecticut, Delaware, Maine, Massachusetts, Nevada, New Mexico, Pennsylvania, and D.C.

If all these states follow the lead of California and New York and ban sales of new gas-powered cars by 2035, the mandate would cover more than a third of all vehicle sales in the U.S. It certainly looks like that’s going to happen. Automakers aren’t going to want to manufacture two different types of vehicle; it would be a logistical nightmare and cost-prohibitive.

Bumpy Road Ahead for EV Industry

Banning the sale of gas-powered vehicles by 2035 will obviously be a boon for EV manufacturers. It will also be a great opportunity for lithium miners.

For New York to reach its goal, it’s going to need a lot of charging stations.

Roughly 20% of all vehicles registered in New York State are in New York City. Today, there are just 677 EV charging stations in the five boroughs that make up New York City. In Manhattan and the Bronx, which have a combined population of about 3.0 million, there’s only one EV fast-charging station. (Source: “New York City Has to Install EV Chargers and It’s Going to Be a Mess,” Vice, October 3, 2022.)

New York City installed its first curbside EV charger in 2021. By then, London, England had installed 8,600. Oslo, Norway (a city of just 635,000) currently has about 2,500.

Consolidated Edison, Inc. (NYSE:ED)—more commonly known as Con Edison—said it wants to install 21,000 Level 2 EV chargers and 525 fast chargers in New York City’s five boroughs by 2025. The city wants 10,000 curbside EV chargers in place by 2030. (Source: “New York City Installs First Curbside Electric-Vehicle Charging Station,” The Wall Street Journal, June 24, 2021.)

The installation process in New York City has been slow. As of the beginning of October, just over 100 high-speed EV chargers were in place. (Source: Vice, October 3, 2022, op. cit.)

New York Governor Kathy Hochul believes the build-out of easily accessible EV charging infrastructure will increase the sales of EVs in New York State. Sales of EVs in the state are up by 30% from the sales in 2021.

The Empire State will receive $175.0 million of federal funding over five years to expand its EV charging network. (Source: Governor Kathy Hochul, September 29, 2022, op. cit.)

Meanwhile, Republican lawmakers across the country have been launching political battles against banning new gas-powered vehicle sales after 2035.

U.S. House Minority Leader Kevin McCarthy called California’s plan to ban the sale of gas-powered cars “bad and stupid.” (Source: “California Gas Car Ban ‘Harmful and Stupid Policy’: McCarthy,” McCarthy For Congress, August 26, 2022.)

Virginia Governor Glenn Youngkin said he’s “at work to prevent this ridiculous edict from being forced on Virginians.” (Source: “GOP Leaders Vow to Untie Virginia From California’s Vehicle Rules,” The Washington Times, August 26, 2022.)

Buckle up.

Analyst Take

The road to full adoption of EVs is going to be bumpy, but there’s no getting around it. Despite some opposition, it looks like the country will be following the lead of California and New York. These changes will help the EV industry.

The biggest stock market winners of the two states’ mandate to prohibit the sale of new gas-powered vehicles by 2035 will be EV maker stocks, but it will also be great for lithium stocks, battery stocks, and EV charging station stocks.