A Guide to California’s Zero-Emission Transportation Plan

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If you’re like most Americans, you own a car. What’s more, you use that car on a day-to-day basis to get to work, among other errands.

In fact, although we all know that public transit carries a lower ecological impact, car ownership is actually on the rise in America–which spells trouble for our warming planet. Indeed, transportation makes up the single largest source of greenhouse gas emissions in the United States, contributing almost a third of the carbon dioxide, methane, and other gases that are warming our environment.

That’s part of the reason four major, international automakers have struck a deal with the state of California to increase the fuel-efficiency of their fleets over the coming years, agreeing to produce vehicles that see nearly 50 miles per gallon by model year 2026.

The pact comes as a response to White House plans to freeze the more stringent nationwide fuel-efficiency requirements set in motion under the Obama administration, and was also, according to a joint statement, driven by the desire for predictability in manufacturing and lowering consumer costs.

Here’s what you need to know about the new agreement (and California’s greater commitment to environmental stewardship)–including what it means for you as a consumer–and how to find cheaper, greener ways to travel as a whole.

A Battle to Increase California’s Fuel-Efficiency by 2026

Over the summer, the California Air Resources Board (CARB) forged the fuel-efficiency agreement with Ford, Honda, Volkswagen and BMW of North America. It was a move California air pollution regulator Mary D. Nichols called an “olive branch” to the Trump administration.

The White House had been actively working to roll back climate policies put in place by the preceding administration, keeping a more conservative requirement of 37 miles per gallon in a purported effort to keep sticker prices low and encourage Americans to purchase newer—and thus safer—vehicles.

And to Trump’s point, while it’s true that electric vehicles are more energy-efficient and can save consumers money in the long term, it’s also true that they often carry more upfront expense than their fuel-run counterparts.

The deal gave automakers the agency to meet California’s higher efficiency standards regardless of federal regulations. Because California is the number-one passenger vehicle market in the country, the agreement affords a much-desired stability to carmakers, who will be able to continue to sell their vehicles in the state.

Automakers would also benefit from the certainty the deal provides for their planning and continued manufacturing operations. Since cars can take years to develop, striking a deal with the state with the highest fuel efficiency requirements can ensure they have a blueprint to follow over the next few years.

And on California’s end, of course, the deal likely means less smog, cleaner air, and a healthier environment for its approximately 40 million citizens.

However, the deal fell into contention when Trump moved to block the more stringent auto emissions standards the state of California wants to uphold. California had historically benefited from a federal waiver that allowed it to set its own standards, but the White House recently revoked this special privilege in the name of producing less-expensive cars overall.

In turn, California Attorney General Xavier Becerra filed a lawsuit against the decision, bringing 22 other states along for the ride. The group of states, which includes New York, Michigan, Colorado, and New Jersey among others, are hoping to obtain a court order blocking the recent determination, which would give California—and, by precedent, state governments in general—less leeway in setting their own emissions standards.

California’s Commitment to Cleaner Air

This would-be accord wasn’t the first move by California lawmakers to secure cleaner air—and, as a result, better health—for its citizens.

CARB also runs a zero-emission vehicle program, or ZEV, which requires automakers to produce a certain quantity of battery-electric, hydrogen fuel cell, and plug-in hybrid-electric vehicles based on the total number of cars they sell in the state of California.

It makes sense, then, that California would spearhead a movement to counteract the Trump administration’s fuel-efficiency freeze, and move to fight against the revocation of their emissions-monitoring waiver. “We’re prepared to lead,” Becerra told reporters in response to the White House decision. “We’re prepared to fight.”

Of course, it remains to be seen what will come of the legal battle that’s been set in motion. But say California wins back its right waiver and the proposed deal goes through: What, then, would the state’s regulations mean for consumers on the car-buying market?

What Does This Mean for Car Buyers in California–and Elsewhere?

If you’re buying one of the estimated 2 million new cars and trucks to be sold in California this year, you may wonder what all this would mean on your end of the table. Whether you’re a Greenpeace rep or just someone who wants to get to work and back as cheaply as possible, car industry standards can affect your environment and your life.

For one thing, you could expect to see more fuel-efficient vehicles rolling off the lots of these four major producers (Ford, Honda, Volkswagen and BMW), which make up a whopping 30% of the U.S. auto market.

And since they are such large names in the industry, that means the greener, cleaner vehicles could be available not just in California, but across the country, which could mean less-painful trips to the pump for a variety of American consumers.

Although electric or hybrid vehicles can be more expensive than their fossil-fuel-run counterparts, their owners spend less money filling the gas tank–and may even be eligible to earn a federal tax credit of up to $7,500. (Note: manufacturers are also eligible for a tax credit for plug-in EV vehicles, but it begins to phase out after they’ve sold 200,000 such vehicles.)

And even very expensive electric or hybrid sedans often cost less than larger gas-run vehicles like SUVs, vans and light pickup trucks, which accounted for a majority of new-vehicle sales in every state in the country in 2018.

Increased availability of green vehicles and the desire to pay less at the pump could lead to increased buyership, which has already been on the rise (particularly in California). And in the long term, the move could lead to decreased smog and lower emissions, which are critical to help reverse the predicted trajectory of planetary warming.

Need to Keep Track of the Money You Put in Your Tank?

Driving can be hard on the environment, but it can put a weight on your wallet, too. Along with the cost of the vehicle itself, you also have to factor in a variety of peripheral expenses, such as insurance, maintenance, repairs, gas, and parking.

For city-dwellers especially, a variety of alternative travel modes may be both greener and less costly. Walking or biking to work reduces your carbon footprint while increasing your weekly allotment of exercise, and public transit is often significantly cheaper than driving and maintaining your own car, even in cities where fares seem high.

But regardless of how you choose to get around, the fact remains that you have to commit some of your budget to transportation. Which, of course, means you need a budget in the first place. But don’t worry, it doesn’t have to include a lengthy spreadsheet or struggling with sheets of graph paper.

SoFi Checking and Savings is a checking and savings account where you can save, spend, and earn—all in one place. You can manage your account online from the comfort of your smartphone, and even get joint access to your account for a family member or whomever else you’re saving with.

As with all SoFi products, you’ll also get access to our unique suite of member benefits, including financial planning, career services, and exclusive, in-person events—which you might choose to get to in a greener ride. Or maybe you’ll walk or take the train. Either way, you’ll know exactly how much money you spent to get there!

Learn more about SoFi Checking and Savings.

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