Oil companies sue Los Angeles over ban on oil and gas drilling
An oil pumpjack operates in the Inglewood Oil Field on January 28, 2022 in Los Angeles, California.
Mario Tama | Getty Images
An oil company with a drilling operation in the Wilmington neighborhood of Los Angeles has filed a lawsuit against the city over its law to ban new wells and phase out all drilling within city limits.
Warren Resources, which operates the 10-acre, oil-extraction site, filed a lawsuit on Tuesday in LA Superior Court seeking to stop the ordinance from taking effect. The company argued the city failed to conduct an adequate environmental review of the potential impacts of halting extraction.
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The lawsuit also argued the ordinance constitutes a violation of the California Environmental Quality Act, the city’s General Plan and the state and federal constitutions. Warren said the law would force the shutdown of its operations, which are located solely within the LA area.
The city in December voted to immediately ban new extraction and shut down existing operations within 20 years, marking one of the strongest environmental policies ever enacted in the state of California. There are 26 oil and gas fields and more than 5,000 active and idle wells in LA, in areas like Wilmington, Harbor Gateway, downtown, West LA, South LA and the northwest San Fernando Valley.
“The City has failed to ask the necessary questions and obtain the required evidence at every turn, has rushed every legally required process along the way, and as a result has based its approval and adoption of the Ordinance on a woefully deficient environmental document,” attorneys for Warren wrote in the lawsuit.
Ian Thompson, a spokesperson for the LA City Attorney’s office, declined to comment on the lawsuit. Attorneys for Warren didn’t immediately respond to CNBC’s request for comment.
The ordinance has been praised by residents who have complained for years that pollution from nearby drilling has harmed their health. The oil industry has largely condemned the city’s ban and argued that phasing out production would hike gas prices and make LA dependent on foreign energy.
Wilmington is a predominantly working-class and Latino community of more than 50,000 people and is surrounded by oil refineries and contains pumpjacks among its public parks and schoolyards. The community has some of the highest rates of asthma and cancer in the state, according to a report by the nonprofit Communities for a Better Environment.
More than half a million people in LA live within a quarter-mile of active oil wells, which produce hazardous air pollutants such as benzene, hydrogen sulfide, particulate matter and formaldehyde. Nearly one-third of the wells in LA are located outside of drill sites between parks, schools and houses.
Residents near drilling sites are at greater risk of preterm births, asthma, respiratory disease and cancer, research shows, and drilling has disproportionately harmed Black and Latino residents.
Several other oil entities, including E&B Natural Resources Management Corp and Hillcrest Beverly Oil Corp., also filed a separate lawsuit on Tuesday against the city over the ordinance.
Last year, California lawmakers voted to ban new oil wells within 3,200 feet of homes, schools and other populated areas after years of complaints by residents and activist groups.
EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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