Dividends and California to ban sale of new gasoline powered cars by 2035

In every industry there is a the biggest market where the sales occur. By virtue of being the biggest market when governments change regulations, the suppliers will and have to adjust or they will be shut out of the biggest market for sales of their products. In the case of the automotive sales, the biggest market is California. If California is changing regulations, then other states will copy, there will be some states who say they will not change, but auto companies sell to the biggest markets not the smallest ones.

In an article from Coral Davenport and Lisa Friedman of the New York Times News Service, the Governor of California announced by 2035, there will be a ban on the sale of gasoline powered cars. It is likely hybrids are ok, but all the major companies have stated they will have a full line up of electric power vehicles by 2030.

In California, the regulatory body which made the decision is called the California Air Resources Board. The Board believes fossil fuel emissions are chiefly responsible for the warming of the planet and set interim targets of by 2026, 35% of the vehicles should produce zero emissions and that would climb to 68% by 2030. The reason why California could act in this manner is President Biden restored the Clean Air Act that allows California to set auto pollution and mileage rules. Former President Trump loosened the rules as part of free rules and regulations from business.

John Bozzelia, President of the Alliance for Automotive Innovation, which represents large US and foreign automakers, said the rules would be extremely challenging to do. The automakers in general want to see more electric vehicles on the road and issues on affordability, charging stations will need the help of state and local governments.

Linking to dividend paying stocks, government is important to all industries for it sets rules and regulations. If a company wants to block the competition, it will say the rules and regulations need to be toughened. If a company wants to make more money, they often say the rules and regulations need to be loosened. There is some sort of balance which the market place will tell for what sells is the key.

There are more questions than answers, till the next time – to raising questions.


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