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After Years Of Protest, California Adds ‘Untouchable’ Trucks To Its Electric Mandate (Update 2)

Author: John Lippert

Heavy-duty trucks make up just seven percent of the vehicles on California highways, but they're a major headache for Mary Nichols, who runs the state's Air Resources Board.

All by themselves, heavy-duty trucks, including long-distance freight haulers, account for one-third of the state's smog-causing NOx pollution, and one-fifth of its greenhouse gases.

Today, at a public meeting held online because of COVID-19, Nichols took two significant steps to battle truck pollution. 

She presided over a meeting in which ARB members voted unanimously to require truck manufacturers to sell a rising percentage of zero-emission vehicles starting in 2024. And she laid the groundwork for a parallel decision next year or in 2022 on forcing fleet operators to buy or lease ZEVs beginning at the same time.

``Diesel vehicles are the workhorses of the economy, and we need them to be part of the solution to persistent pockets of dirty air in some of our most disadvantaged communities,’’ Nichols said in a statement after the vote. ``Now is the time — the technology here and so is the need for investment.’’

Nichols, 75, had been telegraphing the moves for months. And at least some fleet operators say they're ready to join her in switching from diesel and gasoline engines to electric motors, batteries and fuel cells.

"Everybody agrees that improvement in air quality is a must-have," said Matt Dyer, chief executive officer of LeasePlan USA. "In terms of where California is going, it's perfectly understood."

Dyer's parent company, LeasePlan Corp. N.V. is an Amsterdam-based firm with 1.9 million vehicles in its fleet, mostly in the E.U. and the U.S. He says today's vote on a ZEV sales mandate for trucks is an important place to start.

"The manufacturers have a pipeline of very attractive zero-emission vehicles, but the vehicles need to be available in the volumes required to really make a difference," Dyer said. 

"This is where the focus needs to be at the moment," he said, "particularly for the U.S. and its domestic manufacturers."

Now that it’s approved, the ZEV sales mandate will cover everything from a four-ton construction-site pickup to a sixteen-ton highway freight hauler. 

Traffic on Interstate 80 in Berkeley, California - GETTY IMAGES

According to the Union of Concerned Scientists, Nichols is targeting a market share of 75 percent for electric delivery and work vehicles by 2035. By that time, the mandate would put 300,000 electric trucks on California's highways, said Jimmy O'Dea, a senior vehicles analyst with UCS.

The sweet spots for electrification are medium-duty vehicles like school buses and beer trucks that fleet operators use in specific ways to minimize the inconvenience of recharging their batteries, according to Jim Meil, a sales analyst at Columbus, Indiana-based ACT Research. 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. 

At today’s hearing, Volvo Group North America described sales targets in the new rule as unrealistic, in part COVID-19 has forced truck manufacturers to slash both their production and their spending on future products, and has saddled the state of California with a huge budget deficit. Already, Volvo has had to delay testing of electric truck prototypes funded jointly with the Air Resources Board because charging stations failed to arrive as planned, according to Dawn Fenton, vice president of government relations and public affairs.

Truck makers shouldn’t be penalized if they can’t meet the state’s electric truck targets because of ``limited, disconnected public funding,’’ Fenton said. 

California already requires fleet operators to purchase a rising percentage of ZEVS for school buses and airport shuttles. Today's vote laid the groundwork for expanding this requirement to all commercial trucks by requiring big fleet operators to report to regulators in 2021 on how they use their vehicles.

Sacramento wants to know the daily and annual mileage for fleet trucks, how long the trucks remain in operation, how frequently they return to their home base, and where they're registered.

The ZEV purchasing rule could cover fleets operated by motor carriers, truck brokers, terminal operators, retailers, and public agencies, according to preliminary documents. Nichols hasn't laid out the precise timetable for implementing the ZEV purchase rule, but she wants all new commercial trucks to run on batteries or fuel cells by 2045, the documents say.

"This is huge because diesel fumes are killing our communities," said Andrea Vidaurre, a policy analyst with the Center for Community Action and Environmental Justice in Riverside, California. "The drumbeat against diesel has been going on for years, but trucks seemed untouchable until now.’’

Downtown Los Angeles as seen from Pasadena, California in November - GETTY IMAGES

The shift is happening partly because battery costs are falling. 

At LeasePlan, Matt Dyer said electric motors and batteries could reach cost parity with gasoline engines in passenger vehicles in as little as four years. He said the tipping point for commercial trucks is harder to pinpoint for regulators and fleet operators themselves.

Fleet management companies like LeasePlan, Dyer said, need robust prices for their used vehicles to make a profit. But nobody knows how much a three-year-old electric beer truck will be worth if manufacturers are selling brand-new models with batteries that are twice as capable. The cost of recharging depends in part on how quickly governments and utilities can provide fast-charging stations. Ultimately, Dyer said, total costs depend on circumstances that vary widely, such as how aggressively drivers operate each vehicle, how often they stop, and how long they stop. 

Companies like LeasePlan are working with manufacturers to harvest the vast amounts of operational data that the latest-generation cars and trucks are uploading continuously via satellite back to their data management centers. 

The advent of electric vehicles will increase the value of this data flow since they're easier to monitor than gasoline-powered vehicles that require many more moving parts, said Felipe Smolka, executive vice president, transformation of LeasePlan USA. 

In the meantime, Smolka said, LeasePlan is helping California and other regulators plan the transition to electric mobility by working with other big fleet operators to make joint forecasts for how many vehicles they'll need, and when, and with what specifications. 

LeasePlan is doing so through the Corporate Electric Vehicle Alliance, which includes giant companies like Amazon, DHL, IKEA North America, and Siemens. Ceres, a Boston-based non-profit group that lobbies investors and corporations, leads the alliance.

The group's goal, Smolka said, is to have its member define common specifications for, say, truck beds, batteries, and charging stations so that manufacturers can then launch high-volume production.

Nichols is now in court battling Donald Trump's revocation of the 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.

But Trump is sliding in the polls, and Nichols is gaining support, not losing it, in her fight with Trump. 

On Monday, Nevada's Democratic governor Steve Sisolak said the state would adopt California-style requirements for low and zero-emission vehicles starting in 2023. And representatives from four states – New York, New Jersey, Connecticut, and Massachusetts – testified in favor of California's proposed ZEV mandate for commercial truck sales at today's hearing.

Charlie Baker, the Massachusetts governor who authorized today's testimony from his state, is a Republican.

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