“Damn the torpedoes. Full speed ahead.” That’s what Admiral David Farragut is said to have shouted as he attacked Mobile, Alabama in 1864 and helped end the Civil War.
Mary Nichols, chair of the California Air Resources Board, may have shouted the same thing last month. That’s when her staff proposed the world’s first zero-emission sales mandate on commercial trucks, even as COVID-19 triggered the worst U.S. unemployment since the Great Depression.
If Nichols and other ARB members agree during a June 25-26 vote, manufacturers will need to use either batteries or fuel cells to power a rising percentage of commercial trucks they sell in California starting in 2024. The mandate would cover everything from a four-ton construction-site pickup to a sixteen-ton highway freight hauler.
Some truck makers have asked Nichols to postpone the vote during the pandemic, and they can cite plenty of grim statistics. In the Class 8 highway freight-haul segment, North American manufacturers are on pace to build 120,000 trucks in 2020, according to Columbus, Indiana-based ACT Research. That compares to 225,000 in ACT’s pre-pandemic forecast and 345,000 last year.
“This is not a business as usual situation, and it should not be a regulation as usual situation either,” said Jed Mendel, president of the Truck & Engine Manufacturers Association in a March letter. He criticized the mandate as “doomed to failure” without heavy investments in infrastructure, and he asked Nichols to delay the vote.
So how did Nichols, who is 75, respond in one of her last major rule-making forays before stepping down as ARB chair in December?
She’s going ahead with the June vote and has allowed her staff to double-down in precisely the opposite direction. The staff now wants to require 300,000 electric trucks on California’s roads by 2035 compared to 150,000 in the draft Mandel criticized.
The plan “sends a clear signal to manufacturers, fleet owners and utilities that the time to invest in zero-emission trucks – and the economy – is now,” Nichols said in a statement. “Any shift to zero-emission trucks will send positive ripple effects throughout the economy.”
Only time will tell if Nichols’ bet pays off. But she’s swimming with the tide of history. Even ardent environmentalists could be surprised that electric trucks are entering the mainstream of American life faster than passenger vehicles like Tesla.
“Commercial vehicles are highly utilized so they can spread their higher capital costs over a very large number of miles,” said James Womack, founder of the Lean Enterprise Institute in Cambridge, Mass. Many highway freight haulers last a million miles or more. In contrast, he said, “People drive their personal vehicles just two hours a day.”
Commercial vehicles are also going electric because they can. That is, because battery costs are falling.
By 2025, electric school buses will be so cheap that lower operating costs will offset higher sticker prices in less than four years, and then generate another decade of pure savings, said Jim Meil, an ACT Research analyst. By 2030, the payback will take just over a year.
The sweet spots for electrification, Meil said, are medium-duty vehicles like school buses and beer trucks that fleet operators use in specific ways to minimize the inconvenience of re-charging their batteries. These include that the trucks travel about 125 miles a day on regular, unchanging routes, and return to the same barn each night for charging.
By 2035, Meil said, batteries could power one in five of the work trucks, delivery vans, and school buses that are everywhere on U.S. city streets.
Nichols has higher aspirations for California itself, targeting a market share of 75 percent for electric delivery and work vehicles by 2035, according to an analysis by the Union of Concerned Scientists.
But this is only part of Nichols’ multi-faceted regulatory juggernaut.
In a separate vote later this year, Nichols will propose cutting the amount of “oxides of nitrogen” or NOx that heavy-duty truck engines can emit by 90 percent. NOx helps concentrate both smog and microscopic dust particles near the earth’s surface.
And for next year, she’s planning a vote to require commercial fleet operators to buy electric trucks. This mandate will prevent them from evading California requirements by buying trucks out of state.
If it were an independent country, California would have the world’s fifth-largest economy, and Nichol’s aggressive plans are in line with global trends.
By last year, the Chinese metropolis of Shenzen was already powering a third of its urban delivery vehicles with batteries. The European Union is cracking down simultaneously on greenhouse gases and NOx in ways that leave batteries as one of the few alternatives. And manufacturers are scrambling.
Volvo Group, based in Sweden, is investing $400 million in a Virginia factory that will make electric trucks, among other vehicles. In February, Volvo and Mary Nichols launched a fleet of jointly-funded electric prototypes for testing in California. Electrification is critical for making the freight system more efficient and sustainable, said Mary Beth Halprin, a Volvo spokesperson.
Just how critical? Fully one-third of California’s statewide NOx emissions and 20 percent of its greenhouse gases from heavy-duty trucks, according to the Air Resources Board.
Dan Sperling, a member of the board, said California moved to require electric trucks as soon as falling battery costs made such a shift possible. When asked about delaying because of COVID-19, he replied, “This doesn’t take effect until 2024, so hopefully we’ll be well beyond the pandemic.”
California’s aggressive approach to commercial trucks contrasts with its patience on passenger vehicles.
The state first began requiring zero-emission passenger vehicles twenty years ago. Battery-only vehicles and plug-in hybrids made up 7.7 percent of statewide sales in 2019, down slightly from the prior year. They made up just 1.95 percent of total U.S. sales last year, also a slight decline, according to Alan Baum, an independent auto analyst in Bloomfield Township, Michigan.
California’s push for a battery-powered truck fleet will accelerate the viability of electric passenger vehicles, Womack said, by helping defray research, supply chain, and infrastructure costs.
And so far, Californians are sticking with Nichols and Gov. Gavin Newsom through this long gestation. Fully two-thirds support the state’s environmental goals, and most see the state’s leadership on climate change as important, according to January poll by the Public Policy Institute of California.
That’s true partly because 275,000 Californians now work at designing, building, and selling low-emission vehicles. They earn a third more than the statewide average pay, according to Bernie Kotlier, executive director of a labor-management group affiliated with the International Brotherhood of Electrical Workers. That’s a good reason, he said, to keep going during the pandemic.
“If we want the economy to rebound as fast as possible, we can’t lose this job stability and growth,” Kotlier said.
Nichols doesn’t have an entirely free hand. She is in court battling Donald Trump’s revocation of a federal waiver that allowed California to limit greenhouse gas emissions partly by requiring zero-emission passenger vehicles. Nichols will need another waiver to impose a similar mandate on commercial trucks, and she won’t get one if Trump gets re-elected.
Californians are already devising ways to get around Trump even if he wins.
In a four-county area, including Los Angeles, air quality regulators can’t limit tailpipe emissions directly, since that could run afoul of Trump. Rather, the South Coast Air Quality Management District wants to regulate the giant warehouses where Amazon and other retailers attract armies of diesel-powered trucks every day.
If retailers want to qualify for state financial incentives or avoid stiff fines at both new and existing warehouses, they’ll have to adopt behaviors the state wants, according to a plan to be finalized next year. These include allowing only zero-emission vehicles for incoming and outgoing deliveries and installing charging stations, solar panels, and battery storage.
The Los Angeles basin has no choice but to act because, by 2018, it already had 34,000 freight distribution warehouses, according to the Southern California Association of Governments. This number could grow by a third by 2040, even as the federal government requires big additional cuts in NOx emissions.
Without government incentives, manufacturers can’t possibly build enough electric trucks to keep up, said Wayne Nastri, SCAQMD’s executive officer. Here’s just one example: if a company spends $300,000 on a battery-powered delivery truck, it may have to pay that much again just for the re-charging station.
But California can wield sticks as well as carrots.
If Trump strips the state of its ability to require battery-only vehicles, California could ban gas-guzzling engines from central cities, Sperling said. Or, the state could levy higher fees on people who buy them and pay rebates to those who don’t.
These are bold moves, potentially in the spirit of David Farragut. But they could be an easy political win in a state weary of both pollution and income inequality, Sperling said.
“The rich people who buy gas guzzlers would pay the fee,” Sperling said. “People who buy efficient, clean vehicles would get the rebate, and they tend to be less affluent.”