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SUPPORT: Assembly Bill AB 326, Electric Vehicle Manufacturers

By July 27, 2020 No Comments
AB 326 helps Californians afford EVs and supports well-paying jobs for Californians.

July 27, 2020
Assembly Member Al Muratsuchi
State Capitol
P.O. Box 942849
Room 2179
Sacramento, CA 94249-0066

RE: SUPPORT: Assembly Bill 326, Electric Vehicle Manufacturers

Dear Assembly Member Muratsuchi:

On behalf of the Los Angeles County Economic Development Corporation (LAEDC), an organization whose
purpose is to collectively advance opportunity and prosperity for all the residents of Los Angeles, please accept
this letter in support of Assembly Bill (AB) 326.

Today in California, wealthier households, i.e. those earning over $100,000 per year, are far more likely to own
electric vehicles (EVs) than those at lower income strata, and mass adoption of electric vehicles will not
happen in the state as long as electric vehicles continue to be more costly than combustion-engine vehicles.
According to the American Automobile Association, electric vehicles currently cost, on average, about $600
more each year than owning combustion-engine cars.

AB 326 undoes this electric vehicle ownership disparity by making it more cost-effective for more Californians
to have access to an electric vehicle via a month-to-month subscription arrangement. Specifically, this bill
would create a legal framework for “electric vehicle memberships” that provides easy access to electric
vehicles without up-front costs, expensive financing agreements and/or long-term commitments. Procedurally,
AB 326 is necessary because the electric vehicle membership model does not fit squarely into existing laws
regulating the rental car industry or vehicle leasing.

While electric vehicle sales in California are increasing, they are not increasing at a pace that will be required to
meet the state’s zero emission vehicle goals. As electric vehicles remain more expensive to buy than traditional
internal combustion engine vehicles, alternative ownership options are necessary to get more California
consumers into these EVs. This is because many consumers lack stable employment, good credit, or the
discretionary income necessary to save for a down payment; in essence, too many Californians have been
locked out of the electric vehicle market – a market that we must expand in order to meet our state’s
greenhouse gas emission reduction and other air quality goals.

Expanded consumer access will also drive California’s electric vehicle industry growth, as California already has
distinct productive advantages in this industry vis-à-vis other states and nations, and the EV industry is
concentrated and uniquely positioned in California with 13 electric vehicle company headquarters in the state,
along with 43 electric vehicle companies who have a design, R&D or warehouse in California. This represents a
significant and concentrated industrial ecosystem supporting 275,600 good-paying jobs throughout the state
in both Northern California and Southern California.

Clearly this is a growth industry that California needs to support. But first, consumers in California need a more
accessible, short-term commitment option to access the electric vehicle market; an option that this bill would
provide.  For these reasons, the LAEDC is pleased to support AB 326.

Sincerely,

David Flaks
President
Los Angeles County Economic Development Corporation (LAEDC)

[This letter of support was originally published May 1, 2020 in relation to SB 1445, and LAEDC is resubmitting due to the introduction of AB 326]

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