California Has a Chance to Stick a Buy America Rule On its EV Voucher Program

By Matthew McMullan
The California State Capitol building in Sacramento. | Getty Images

And it’s about to not take it.

A bill is moving through the California senate right now that will update the rules governing the Golden State’s electric vehicle (EV) purchasing incentives. The consumer voucher programs are popular and plentiful. Known as AB974, this bill adds labor and workforce standards to the conditions you must meet if, say, you run a delivery company and plan on claiming the rebates for all the EVs you’ll be buying for your fleet.

That’s a good idea in a state that will also require all new vehicles sold in it to be emissions-free by 2035. Attaching worker-friendly rules to the voucher that can knock a few thousand dollars off the sticker price of a new van is a good way to motivate fleet purchasers to maintain good working conditions for their drivers.

AB974 wasn’t always just good, though. It used to be great. It was originally introduced with legitimate, bona fide domestic content and assembly requirements, meaning: To qualify for the voucher the purchased vehicle would need to include a high percentage of American-made parts (domestic content) and be put together by American workers (domestic assembly).

After intense opposition from notable opponents whose production models rely on extensive foreign supply chains, these requirements have been stripped. This has presumably made those opponents happy, but losing them in the grand scheme is a huge mistake.

“Sticking Buy America rules on consumer support for EVs will ultimately sustain manufacturing jobs through the electric switch, not just in California but across the country.

This is an opportunity for a real shot in the arm for the American EV industry. The state of California is huge and governs an absolutely huge market. Carve it out of the rest of the United States and its economy is the fifth largest in the world. Roughly 2 million new vehicles are registered here every year.

And so it’s got some, you know, sway. Cachet. Remember when the Trump administration rolled back federal fuel efficiency standards, and California was able to cut a deal with five automakers that locked them into higher ones? What it does on auto policy is of great import. If the state requires that vehicles eligible for voucher were American-made, demand for American-made EVs is going to explode.

That’s why this is something we should want and encourage. The auto industry is a huge economic engine and employs millions of people. Its switch to electric energy is only accelerating. Sticking Buy America rules on consumer support for EVs will ultimately sustain manufacturing jobs through this switch, not just in California but across the country.

While we’ll all be driving electric cars in the near future, the jobs making these vehicles and their batteries aren’t guaranteed to be American ones. Buy American will help the domestic auto industry keep up with its competition from China, whose own EV industry is positioned to dominate the international market – thanks in no small parts to years of public support. And not to sound all doom-and-gloomy, but we regret to maintain a domestic auto industry at our own economic peril.

Again, this was in the bill. This was in the bill! These requirements and what they represented – a stable market for domestic EV manufacturing significantly expanded by one of the most influential economies in the United States and the world – were in the bill. But they’ve been taken out.

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What a missed opportunity in the state of California!