Five years ago, electric trucks were a new technology entering the market. Truck makers and fleets alike were neither offering electric truck options nor buying them. But pressure to tackle air pollution, tremendous fuel and maintenance cost savings, along with falling purchase prices have turned electric trucks into an increasingly smart business decision.
Industry is moving in the right direction, but we need strong policy to transform the truck market and capture electric vehicle benefits. To that end, the California Air Resources Board recently proposed the Advanced Clean Truck Rule to bring more medium- and heavy-duty electric trucks to market. It’s a start but ultimately lags rather than leads the industry.
Variety Leads to a Lively Market
One of my favorite places in the world is the weekend market in San Salvador, El Salvador’s capital city. Every Saturday morning you can find a thick maze of stalls piled high with exotic fruits and spices blocking the streets.
The first time I visited, I was surprised to discover that most stalls sold the same products. How could venders compete with their neighbors? What attracted customers if it was just a bunch of identical stuff?
However, looking closer it became obvious: the produce was the same, but there were countless types. Let’s use mangoes as an example: at one stall you might find flat yellow mangoes, while the neighboring stall sold small, blood-red ones. And what if you were craving green mangoes? Well, look no further, the stall up ahead has a basket of them!
Venders had to differentiate, and confident shoppers came knowing that if one stall didn’t have a certain type of mango someone else would. Variety lived at the heart of this thriving market, and meeting customers' needs ensured its vibrancy.
Like San Salvador’s market, electric vehicles are starting to express this characteristic. Today a transformation is underway: with around 100 electric truck models available, variety is breathing life into the market. Electric trucks are rapidly attracting a range of customers, thanks in part to one proven technology: battery electric trucks. Its falling prices and cost savings have caught fleet owners’ eyes while the growing variety of electric trucks is encouraging trade. It couldn’t happen sooner.
Addressing Worsening Air Quality
A report this summer found that greenhouse gas emissions from cars and trucks were on the rise. And it’s not only greenhouse gases but also toxic ozone pollution and cancer-causing particulates. According to a 2019 report, seven of the top ten most ozone-choked cities in America are in California.
One of the biggest sources of air pollution is diesel-burning medium- and heavy-duty trucks. The proposed Advanced Clean Truck Rule would require truck manufacturers sell zero-emission electric trucks as an increasing percentage of their California sales from 2024 to 2030. As its currently proposed, the rule would save California's trucking industry $4.9 billion and add $5.7 billion in statewide health benefits through 2040.
But the proposed sales targets are conservative and would only add about 75,000 new electric trucks to California's roads by 2030, which is a tiny (4%) fraction of all trucks in the state.
That’s arguably worse than business as usual. To understand why the rule should be strengthened, let’s look at what’s already happening.
Lining up for Electric Trucks
For plenty of operations, electric trucks are ready to go today. From Coca-Cola to FedEx, companies are recognizing the value of electrifying and adding Class 2b through 6 electric trucks to their fleets. These Classes include heavier pickup trucks (F-250 and up) as well as moving trucks and package delivery vans.
For now, local delivery vans and utility trucks are the most commonly electrified vehicles. And with good reason. For cost-conscious companies, filling up with cheap electricity rather than higher-priced diesel and the lower maintenance cost associated with electric trucks makes good business sense.
The environmental and business case helped convince Amazon to double down on its initial investment of $700 million in electric vehicle manufacturer Rivian. In the largest electric vehicle order ever, Amazon announced it would purchase 100,000 medium-duty delivery trucks from Rivian. Amazon expects to have the first 10,000 trucks making deliveries by 2022 and all of them running routes by 2030.
While the trucks will be deployed throughout North America, this single announcement goes further than California’s Advanced Clean Truck Rule.
Similarly enticed by lower fuel and maintenance costs, UPS piloted 50 of Workhorse’s electric delivery trucks. The trucks performed so well UPS bought another 950. Not to be outdone, FedEx purchased and leased 1,000 electric delivery vans from Chanje that are expected to hit California’s streets before the Advanced Clean Truck Rule even comes into effect.
Optimus Prime: Now Available in Electric
Because of their size and demanding use, Class 7-8 trucks have been slower to electrify. But that’s quickly changing and models exist for applications such as drayage (short-haul) and waste collection, which are ripe for electrification due to their short-range and frequent braking.
Adding variety to the heavy-duty electric truck market are new entrants such as TransPower, Motiv Power Systems, US Hybrid, and BYD along with legacy truck makers such as Kenworth, Peterbilt, Daimler, and Volvo.
Searching for Permanence
These early actions show the desire and opportunity for a larger electric truck market: customers are trickling in, and venders are setting up stalls. But the market needs a push.
Transportation is the largest source of greenhouse gas emissions—and growing. Meanwhile air quality is getting worse. If California is serious about cleaning up its air and meeting its climate goals it can’t wait for business to solve the problem—policies are needed to get more electric trucks on the road faster.
A stronger Advanced Clean Truck Rule that guarantees at least 15 percent of California’s trucks are electric by 2030 would deliver that push. It would encourage manufacturers to provide more product and send a clear signal to customers: California’s electric truck market is open for business.
In San Salvador’s market the smells, colors, and sounds of commerce mingle effortlessly. The weekly excitement has a sense of permanence: these markets have existed for hundreds of years and always will. Similar signs are coming from the budding electric truck market. What’s needed now is a forceful rule to inject permanence and ensure a cleaner future for the truck industry.
This is the second blog in a series exploring the electric truck landscape while tracking California’s ongoing rulemaking process.
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California is launching a new rule to tackle one of the largest sources of pollution: medium- and heavy-duty trucks.