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New rules likely to open doors wide for new competitors.
Under first-of-their-kind rules, California regulators will require a major shift from gas and diesel to zero-emissions battery and hydrogen technology for new vans and trucks sold in the state, starting in 2024.
The new guidelines will mean that at least 40% of the tractor trailers sold in California would have to be powered by some form of zero-emissions technology by 2024. Medium-duty trucks, such as the Ford F-250 or Chevrolet Silverado HD, would be required to switch over 55% of their sales by 2035. And 75% of delivery trucks and vans would have to use zero-emissions powertrain technology by 2035, a point by which fully 100% of government fleets and last-mile delivery trucks would have to meet the target.
While not directly covered in the new rules, other guidelines already put in place by the California Air Resources Board will press manufacturers to add electric and hydrogen trucks to light-duty truck segments, as well.
Ford plans to offer an all-electric version of its Transit van.
In the process, the new mandates are expected to shake up the existing automotive establishment, opening the door for an assortment of new competitors including, among others, Tesla – which is readying both the electric Cybertruck pickup and Semi Class 8 rig – Nikola Motors, Bollinger and Rivian. The latter start-up has already received an order to supply 100,000 all-electric delivery trucks by 2024 to Amazon. The online giant last year led a consortium investing $750 million in Rivian.
“California is once again leading the nation in the fight to make our air cleaner, becoming the first place in the world to mandate zero emission trucks by 2045,” Governor Gavin Newsom said in a Thursday statement. “Communities and children of color are often forced to breathe our most polluted air, and today’s vote moves us closer toward a healthier future for all of our kids.”
With some of the nation’s most severe air pollution problems, California has been a leading proponent of zero-emissions technologies – though some of the measures it has enacted are now being challenged by the Trump Administration. The state already is the largest market for battery-powered passenger vehicles, and prototype heavy trucks are being used in a number of locations, including the Ports of Los Angeles and Long Beach, two major sources of vehicular air pollution thanks to the diesel trucks that often idle for hours waiting to pick up loads.
Nikola hopes to address infrastructure concerns by setting up its own hydrogen refueling network.
The new California regulations received strong praise from clean air advocates during hearings. “This [rule] is projected to save over 900 lives and avoid over almost $9 billion in health costs over the course of the program,” said Will Barrett, clean-air advocacy director for the American Lung Association in California.
But not everyone was pleased with the idea of having to switch from gas and diesel to electric and hydrogen trucks and vans.
“They cost more than traditional fuel trucks, because there’s no charging infrastructure and developing one is very expensive,” testified Jed Mandel, president of the Truck and Engine Manufacturers Association.
The challenge of creating charging and hydrogen refueling networks has been considered a major stumbling block to the adoption of zero-emissions technology for passenger vehicles, as well. But that is beginning to be addressed.
Tesla has already energized an extensive charging grid across North America, with plans to beef up the Supercharger network as it prepares to roll out both its Cybertruck pickup and big Semi truck.
Toyota’s prototype hydrogen truck is shown here with the Mirai fuel-cell vehicle.
Nikola Motors, which is developing an assortment fuel-cell-powered trucks and pickups, plans to set up its own hydrogen refueling network to support its product roll-out.
Then there are charger companies like Electrify America which today announced it had completed a network of chargers spanning the first of two cross-country routes it expects to power up this year alone, this one running 2,700 miles and passing through 11 states, from Los Angeles to Washington, D.C. EA, which was set up by Volkswagen using $2 billion in funds included in its settlement of its diesel emissions scandal, is planning more than 10,000 public charging stations across the country, with competitors like ChargePoint and EVGo laying out similar plans.
New players like Tesla and Nikola, as well as Rivian, Bollinger and Lordstown Motors, threaten to upend the established transportation industry order as they seize on the shift to green technology to crack a long-closed market.
While a number of the new entrants will struggle, cautioned Jonathan Smoke, the chief economist for Cox Automotive, others could be well-positioned to take advantage of the changing industry dynamics. That’s been reflected in the reception Wall Street has given some players, Tesla stock surging briefly past $1,000 a share in recent weeks. And since going public this past month, Nikola gained a market capitalization of $34 billion, or more than Ford Motor Co.
Daimler’s Freightliner is one of its brands developing electric powertrain options.
Conventional truck and automotive manufacturers aren’t ceding dominance willingly, however, and are laying out major plans of their own.
General Motors CEO Mary Barra this month announced plans to build electric delivery vans, on top of the all-electric Hummer pickup to debut in 2021. Ford is readying an all-electric F-150 as well as a version of its Transit delivery van. The various subsidiaries of Daimler AG, such as Freightliner, have already launched an assortment of electric vans and heavy trucks, with more in the works. And Toyota is partnering with truck giant Kenworth to develop hydrogen-powered Class 8 semi prototypes that could lead to production models later this decade.
California’s earlier clean-car rules covering passenger vehicles have been adopted by more than a dozen states, Nevada the latest to sign on just this past week. Regulators with the California Air Resources Board made it clear this week they hope to see the new truck and bus standards adopted by other states, as well.