Ruben Aronin: Can State Policy/Financial Incentives Counter Fed’s EV Pullback?
As federal incentive rollbacks, tariff pressure, and automaker write-downs reshape the U.S. EV market, California is testing whether state-level policy pull & financial incentives can substitute for federal policy headwinds. In this VX News interview, Better World Group Senior Principal Ruben Aronin – architect of the Advanced Clean Cars II and Advanced Clean Fleets coalitions – outlines a 2027–2029 strategy built on point-of-sale incentives, faster charging deployment, freight beachheads at the ports, and a new revenue source capable of funding transit and electrification without pitting them against each other.
“We need to invest where the market is moving and movable, for both cars and trucks, and invest in pull-through opportunities, smart incentives that leverage private sector investments, and get more infrastructure deployment.”
At VerdeXchange 2026, you moderated a panel framed explicitly around EV Market Momentum – Pullbacks, and Progress. Elaborate both on the “pullback” and California’s response since last June?
The pullbacks have been the hostile winds of the federal government: including the disinvestment of the $7,500 consumer credit for light-duty vehicles and, equally important, the Biden-era manufacturing tax credits that had passed and leveraged billions of dollars of private investment in battery and vehicle manufacturing. With the pullback of those federal consumer and manufacturer tax credits, we've seen massive disinvestment. For example, Ford took a write-down of more than $19 billion on its EV investments. It's hard to imagine how Ford will stay competitive in a global EV market.
The positive is the market California ushered into reality: close to one in four new vehicles sold globally are EVs, that's largely from the Chinese manufacturer market share. The Iran War and uncertainty and volatility of gas prices are goosing it further. Particularly, countries that import all their oil see the writing on the wall for their economies. They need to move towards an electric future to provide reliable sources of affordable electricity to fuel their vehicles. Affordable EVs from $15,000 to $25,000 are running wild around the world, and our neighbors Canada and Mexico will see them soon.
I’ll share a bright spot here since the conference. We had been speculating that Governor Newsom's proposal to reanimate a state incentive would happen and that not only got done; it got done at the budget deadline in June. Everyone predicted the legislature and Governor would likely not come to an agreement until the end of session in August. CARB and our state government stood up a brand-new program within a month: $3,500 on a new vehicle, matched dollar for dollar by the automakers, and $1,750 on used EVs. Tesla went through its allotment, cumulatively $18 million (approximately), in a week. So there's a real demand for EVs. The problem is we're not seeing enough supply now.
You personally have spent more than a decade building the coalitions behind California's clean vehicle framework; clearly, much of it has been unwound in the last two years. Elaborate on how you’re recalibrating – the strategies now being advanced at the subnational level of government.
Ruben Aronin: We're already doing it. We're building a three-year strategy for 2027 to 2029, hoping the midterms shift the political mood of the possible. We built this coalition through the first Trump administration and got much stronger – but we made mistakes, I'd say humbly. We assumed that if we required manufacturers to build affordable EVs they would, that consumers would be thrilled, and that there wouldn't be a petroleum and automaker backlash to undercut that. We also have to acknowledge the permitting and deployment delays and reliability challenges for some EV infrastructure: some states we work in the South for example can get charging in the ground faster and cheaper than California can. So we are learning that we have to accelerate that process and require utilities to be responsive to customers who want it.
With the administration circumventing our rules and coming for more, we need to invest where the market is moving and movable, for both cars and trucks and invest in pull-through opportunities, smart incentives that leverage private sector investments, and get more infrastructure deployment. The Energy Commission will tell you we've had more chargers than gasoline nozzles for a while now, but they have to be reliable, and we have to build a consumer base that treats this not as the alternative but as the way we get around.
The other humbling piece in a city like L.A. or the Bay Area, is that not everybody needs to replace a combustion engine with a car. We have transit, walkable communities, on-demand services that can replace a light-duty trip altogether. So, it isn't just about an electric car in every driveway; it's about figuring out the right transportation mix and investment strategy that is going to move the people who want affordable EV’s. It's an opportunity to also make sure the infrastructure is there and reliable, and then work the big entities on the truck side — the ports, the warehouses.
Here in the South Coast we have an Indirect Source rule that is working remarkably well and driving real private investment into trucks and infrastructure. We now have the state'sClean Fuel Rewards programkicking out a quarter million dollars annually to subsidize the first cost of trucks, making the total cost of ownership a lot more competitive.
Goods movement is ready to move with a nudge. With the Tesla Semi entering the market this year at roughly $130,000 less than competitors, there are real opportunities to move markets forward where they're movable. Our hope is that in four years there will be a federal government that can advance policies that will work for California and make America competitive globally in a market that's accelerating very quickly to the EV future.
If you're advocating the acceleration of the aforementioned strategies to the next governor of California, how do you frame the messages so that they're heard & persuasive?
Great question. Let’s start with Xavier Becerra's biography. As Attorney General he helped lead the fight, with Mary Nichols and Governor Brown, to win most of the lawsuits our state filed against the First Trump Administration — and not alone; he got attorneys general from 20 states to sue the federal government over its attacks on our clean vehicle rules. We won those, and built stronger rules subsequently. So I'd appeal to his history of fighting Washington, because we'll need that over the next two years; they're still trying to strip authority from states, and from California most importantly. I'd also appeal to the fighter we had at HHS, that hat he led for the Biden administration who cared and acted to proactively protect Americans health and was especially concerned about the disproportionate health impacts of pollution burdened frontline communities. Californians still breathe the dirtiest air in the country, and our freight-burdened communities breathe the dirtiest of the dirtiest. We can't accept that for another generation.
So pulling from those experiences, I think there is a third way that we can be advancing smart policy innovations and investment strategies to move what some of our industry friends call beachheads. How can we get and accelerate truck electrification at the South Coast ports and the Port of Oakland as a model for targeted heavy-duty investment?
On light duty, GGRF has taken a real haircut. That's where cap-and-invest dollars live, and a lot has traditionally gone to EV incentives, so there will be a food fight over limited resources. We need new tools. Colorado's retail delivery fee raises multi-year dollars for transit and EV investment and has been really successful — that's one model. Another is potentially creating a luxury vehicle fee that could fund affordable clean cars. We need reliable sources of dollars that don't burden Californians and that leverage private investment, because that investment creates the non-outsourceable jobs. This is a priority for unions like IBEW, for partners like the Teamsters. Something that SEIU cares deeply about, and not just the environmentalists.
This is really about transforming a world where people can have more certainty of what it's going to cost to fuel a vehicle, amid refinery closure pressures and the Iran War. We need someone who will fight to clean our air by investing in the markets ready to transition. Right now, we have to do that more with carrots than sticks because those are what we have available. Hopefully by the end of the Becerra administration we will have some more proof points and scaled deployment. We're still at one in five new car sales being electric in California today, and the used market is off the charts in California for EV’s. I'm concerned that we're not going to have enough used EVs to support the needs of Californians in a state where 80% or more of car purchases are for used cars.
It’s often said that one can always learn from the opposition. What is the Trump administration doing right that you can learn from, if anything?
We have an administration paying offshore wind developers to invest in fossil and disinvest from a proven energy resource soI don't think there's anything we can learn from their policy. But the populist agenda the Trump movement elevated is instructive. We can't keep saying: “eat your vegetables, it's good for you and good for the planet”. This transformation only works if we can show cost savings, livelihood savings, and health savings — and people believe it. That means that we really need an EV ecosystem people have confidence in, where range anxiety recedes and there are more new and used EVs and a more vibrant electrified rideshare fleet.
The other piece: the moment of leaning into Democratic leadership, that was very bullish on EVs, made this a partisan issue, which it never should have been. When we all went to smartphones, nobody called it a ‘Democrat phone’ or an ‘Enviro phone’. It's just technology, and people want the latest technology because it's better for their lives. I drive a 2014 Nissan Leaf and I beat every ICE vehicle off the light onto the freeway. You may have some range anxiety for occasional very long distance driving, but they're fun to drive, they perform better, and I never think about maintenance or oil changes.
We need to bring more of that to people. We also need to get off our high horse. We never said it, but EV mandates were interpreted as: next year we're taking away your cars, and you're going to have to drive an electric vehicle. A better way to say this is that anybody who wants an affordable electric car, truck, or bus should be able to get one, and we should make that path easier. We should ultimately still ensure we’re requiring manufacturers to build cleaner cars to meet an air quality crisis that the Trump administration is worsening, at terrible cost in healthcare expenses and cancer clusters across the state..
I have an asthmatic child, now off to Cal State Long Beach, who has outgrown terrible childhood asthma — he was on a nebulizer and an inhaler constantly. A quarter of Southern California kids live that life, just trying to breathe, and we accept that as okay. Not long ago you could smoke on an airplane; now you can't smoke in a restaurant - even in France. The idea that we drive around in things that pollute us and our air — we have got to get past that. That's the vision to sell, and it isn't an environmentalist or Democrat or Republican vision. It's clean air and health, where we all can win.
Pivoting back to CARB and its first-time EV rebate program. Is $3,500 enough as a point-of-sale rebate to provide the market pull to bring the EV market in California, and in the country, back to where it needs to be?
Ruben Aronin: Now, I'm going to pivot the question. I think the EV Rebate program is a great start, and apparently it's enough, because EVs are selling like hotcakes as a result. In fact, you could argue it's too much: the price difference between ICE and electric isn't all that high, and if you're charging at home there's real savings within one to three years.
Is, however, the incentive changing the consumer's decision, or is it making the dealer put EVs at the front of the line? That's what we need to identify. But, it seems to be working.
The worry I have is that it's a one-and-done piece. The governor's office projects 77,000 new EVs on the road from the combined $135 million the state put in, matched by $135 million from the automakers. What I've learned about incentives is that they change consumer and automaker behavior better if there’s a multi-year stable and predictable horizon of continued incentives. Now, we can't afford to subsidize every sale, or one in two, or one in four – which is why I like the first-time-buyer structure and the $50,000 MSRP cap. This way we’re subsidizing those people buying the quote-unquote affordable cars and let people paying premium prices outgrow the market too. It's great when there's a federal $7,500 with a California topper — back in the day $3,000, so it was almost $10,000. But we should be demanding that carmakers give us more affordable EVs. I'm worried their disinvestment means they'll just sell them at higher cost here, while everywhere else in the world prices are dropping tremendously.
Turning to Cap-&-Trade. The legislature reauthorized cap-and-invest and extended the program's horizon, and with it the revenue stream underwriting most of the state's clean transportation spending. Does that longer runway actually change what your coalition’s policy ambitions and public funding priorities are going forward?
Ruben Aronin: If it doesn't change the marketplace needs, as I alluded to earlier, it means we need to go and look at creating revenue streams outside of the GGRF world. A functional cap and invest system was designed to go away — that's the point, the pollution goes away. The investment requirements for infrastructure and incentives, especially off the federal governor floor on our own.We're gonna need that for the next three to five years or more.
So, creatively we have to think about building broader coalitions to raise critical money for transit and charging infrastructure, and vehicle incentives and everything we spend should have requirements for private sector matching dollars. Studies show every public dollar in the EV market has brought in five or ten times more. All the money saved at the pump is largely discretionary income, and other studies show how much more economic activity gets reinvested in California for every dollar we don't send to the big petroleum companies. But bottom line, we still need public money, but we need to spend it smartly, and we can't be rating the general fund or GGRF, so we need to figure out where else those dollars and resources can come from, and build a coalition that can support that.
Could your articulation of what California is doing and should be doing re EV’s also be successfully made in the Southeast, in the Midwest? Obviously it's part of the gospel of California, but does it resonate nationally?
I appreciate you saying that. I come at it as a Californian, but I work in the Midwest, the Northeast, the Northwest, and a little in the Southeast. The wrappers are a little different. I grew up in Connecticut and there's plenty of politics in the Northeast, and Connecticut didn't follow California into the latest round of clean vehicle policies.
I think the opportunity we have in front of us is that it's no longer California telling you how to define policy. Under the Clean Air Act we have the right to design policy other states can follow. The feds have preempted that for the moment and we're challenging that in court. But I think we are now in a playing field where every state can define what needs they have to advance electric vehicle policies and investments — and I hope other states can lead better than California. A state like Georgia still benefits from private and federal investment in battery manufacturing and the Hyundai plant, and the best innovation product from Georgia was just named the electric school bus built there. That's manufacturing prowess, not ideology — straight economic investment in products the U.S. and the world want. In the Midwest, I worry Michigan’s automakers will be the next Kodaks in ten years, given where the global market is going. There's a competitive argument to make there. And we just have to remind people that we are not in control of our destiny when prices go up, and they stay up for a lot longer than when they come down. Investment in an electric vehicle future, at whatever pace is right for a state, is important.
Quick anecdote: the Mayor of Knoxville was on a webinar with us. She's grown her fleet from two to 52 EVs and wants to work with the Bicoastal Fleet Accord to advance cleane transportation that New York City and L.A. County recently formed to prioritize EV procurement. Together, these entities represent some of the largest publicly owned municipal fleets in the country. The Mayor of Knoxville is asking what he can learn from them and how she can join our conversations with manufacturers about the municipal vehicles of the future and the price point cities need. That's a solution-oriented posture. This is an opportunity to invest in ourselves and invest in the future, invest in things that are going to save us money and not poison our kids.
We've also moved to an Amazon economy for goods movement – everybody expects stuff at the door and conveniently ignores the pollution footprint at every point of the journey. How do we clean that up so we're not dropping a ton of pollution in neighborhoods near distribution centers? People want to hear that, especially now that the sprinter vans — the Rivian vans — are practically cost-competitive. Shouldn't Amazon, Target, and Walmart be using them? Walmart, headquartered in Arkansas, is putting EV charging in its lots nationwide. So there are ways to talk about this uniquely. And the less we make it about California, the better, because California is a wonderful whipping boy — oh, we don't want to be like those crazies in California. And yet EVs are very popular in Texas and Florida.
Are your coalition partners a bit timid about advancing this EV agenda outside California because they fear the forces against you will spend twice as much, or five times as much, in opposition? What truly explains why this EV conversation isn't on the front page of every newspaper in the country, especially given gas prices?
Here's what else is on the front page: the awful heat crises hitting Europe, the Canadian fires. It's in the American papers, and it's as if climate doesn't exist.There's been a remarkable shift in our news culture; we've seen it since An Inconvenient Truth in the early 2000s, climate moving in and out of vogue. Whether it's intentional censorship, I don't know. But part of it is contextually that we're not talking about the causes of these crises.
The other awfulness is how much faster this federal government moved than the first Trump administration to unwind the rules we have in place — the swift elimination of federal and state clean vehicle standards, the tariffs hurting our auto industry, the anti-EV policy. We don't have the fleet of affordable EVs to deploy while Europe, Mexico, and Canada are getting one. In this election cycle, politicians need to respond to what we're doing to make life more affordable – and we can't turn on a dime to make EVs accessible and affordable after all the public and private sector disinvestment over just the past two years. We could have, without such an unwinding of federal policy. Now it's probably another three to five years before we get the goodies the rest of the world is getting. That's my rationale for why we aren't making the argument. That said, used EV and hybrid sales are growing double digits, and if affordable EVs were readily available I think they'd be grabbed up much faster in this destabilization of gas prices.
Your answers have focused heavily on EVs and related policy incentives. But you're also more aware than most of how competitive the battle between vehicles and transit operations is for public dollars. Address that competition and how California will ultimately allocate its scarce transportation funding.
Ruben Aronin: Thanks for daylighting it. We've lived in a scarcity model and we need to get to abundance. The grand compromise I alluded to; a new revenue source throwing off predictable dollars for both transit and EV investment, is critical, perhaps even something that’s even bondable. The GGRF was never bondable because auction proceeds were uncertain and the legislature reallocated year to year.
So, it exists because of the way we've structured government funding. There's a big pot for education, healthcare, and core services, and in transportation we've pitted transit and EVs against each other, most prominently in the GGRF world. My view, and where Better World Group stands, is that we need a world where we move people and goods affordably and efficiently. In many places that means better, safer transit and the investment to get there. And a lot of Californians still need to drive; they should have the ability to get an affordable EV.
We can't subsidize every EV sale, even at 20% of the market, so we have to be strategic about which segments are most deserving. How do we get the public sector, still obligated to transition to zero-emission purchases, there? How do we prioritize people with long commutes who spend a ton on gas? There are surgical opportunities to spend smarter, but at the end of the day we have to raise more money. California is the fourth or fifth largest economy in the world; there's a way to do this that doesn't hurt anybody's pocketbook. Look at how we built out transit in Southern California: the sales tax, bonding against it, a generational investment strategy. We could use more help from Sacramento, and as a coalition builder I think we're stronger with a big tent. But in reality my friends are fighting each other which makes me unhappy when what I want is to fight the gross profiteers and polluters in the oil industry, not fight over the small dollars left for the priorities we care about.
