Key Takeaways
President Biden’s decision to follow California by regulating diesel trucks out of business and replacing them with battery-powered trucks will be both challenging and expensive.
The Biden Administration has released regulations requiring 60 percent of short haul trucks and 25 percent of long-haul semi-trucks sold to be electric by 2032.
Battery-powered trucks cost 2 to 3 times more than their diesel counterparts, have much less range, and require enormous sums to provide charging infrastructure across vast parts of the United States.
A single truck charging plaza can consume as much electricity as the Empire State Building.
Biden is using funds from the infrastructure and Inflation Reduction bills to assist companies building battery-charging devices in remote areas that will link to California and its ports.
Converting the grid to accommodate intermittent wind and solar power as well as provide much more energy for the trucks, cars, HVAC, and stoves that Biden mandates to run on electricity will mean much higher electricity bills for consumers.
The Biden administration is helping to bankroll California’s effort to force the use of electric trucks. As usual, California starts these initiatives and Biden’s federal government supports them and then introduces regulations to do the same. The Biden administration is using parts of $2.5 billion set aside for the construction of new charging stations funded from the 2021 infrastructure law and the Democrat-passed Inflation Reduction Act in 2022. A California-based startup, TeraWatt Infrastructure, recently received $63 million in federal funds to build two electric truck charging stations in New Mexico. Another company, MaxxEnergy, is planning a fueling station for hydrogen-powered trucks in New Mexico, using electricity from a proposed solar farm. The projects are part of companies looking for land and new sources of electricity along critical freight routes in the Southwest to support truck electrification.
California has imposed strict regulations on the trucking industry that are designed to phase out sales of most new diesel-powered trucks in the state by 2035. Eleven other states have adopted California’s regulation, and the Biden administration has taken similar steps that are designed to increase the number of electric trucks.
Electrifying trucks will put even more strain on the electric grid. Long-haul charging requires large amounts of power and in remote areas along highways and truck routes. That is on top of California’s and Biden’s initiatives that force electric vehicles for personal travel and electrification of cooking and heating through regulations and standards. Tech companies and cyber-currency operations have also built data centers that draw huge amounts of power and artificial intelligence is also increasing demand.
A single plaza for charging electric trucks, for example, may need as much power as the Empire State Building, according to TeraWatt. Further, because electric trucks have such limited range, numerous charging stations are necessary to keep them charged and operable. In the Southwest, a major truck route, the remote desert makes it difficult to connect charging stations to the grid, requiring miles and miles of transmission lines that are difficult to site across state boundaries and on private lands despite Biden’s initiatives to speed up the permitting process by side-stepping environmental laws.
According to Patrick MacDonald-King, CEO of Greenlane, a charging company started by Daimler Trucking, NextEra Energy and BlackRock, sites that have power are more desirable as they make it easier and faster for charging stations to become operable. Greenlane plans to build stations about every 75 miles between Los Angeles and Las Vegas, Nevada. TeraWatt plans to space its chargers about 150 miles apart between Los Angeles and El Paso, Texas. Small towns in the Southwest are prime areas for the charging industry as it expands, offering infrastructure in the often-desolate areas between California and Texas.
California’s influence on how freight moves across the United States in terms of policy and logistics is major as its ports receive goods from China and other major exporting countries. California is home to one of the largest import complexes in the country. About 30 percent of the country’s cargo container traffic — everything from shoes to furniture — comes through the twin ports of Long Beach and LA.
It is not surprising that the Biden administration’s plan for green trucking flows through California. The blueprint calls for phasing in the charging network, starting with LA and other freight hubs, then building charging corridors that connect the hubs to the rest of the highway network. That has led the industry to put a premium on charging sites in and around LA, and also on routes connecting California to the rest of the country including small towns.
As Biden and California work to electrify trucks, the trucking industry, with its demanding schedules and tight profit margins, will need to work with utility companies and state regulators who can take years to plan projects. In rural areas, utility companies will have to upgrade their transmission systems and build miles of distribution lines to reach the new charging stations that may have to cross railroads, highways or private property. To deal with the challenges, charging companies are using cutting-edge technology and are phasing in their operations over several years, so they have time to build support and solve logistical challenges with power lines. They also expect to phase in their power use, so they will not need to pay for massive electric loads in their first few years, scaling up usage over time as fleet demand increases.
Companies are planning a variety of ways to find power for the new stations, including generating their own solar or power, or even portable batteries or generators in the short term. WattEV, which is receiving federal funds to build several charging stations in California, is planning to build solar generation. But it is also considering other temporary options including gas-powered generators. Greenlane is taking a data-driven approach, using information from Daimler and from Uber freight, to determine the best locations for its stations. It also has technology that can tell which utility companies serve the area and whether they can provide sufficient power, which is getting more difficult and expensive as policy-makers produce new demand in their quest to electrify everything.
Biden’s Electric Truck Mandate
Biden’s Environmental Protection Agency’s (EPA) electric truck mandate requires that electric semi-trucks make up an increasing share of manufacturer sales from 2027 through 2032, similar to its rule for passenger cars. EPA’s truck rule would effectively require electric models to account for 60 percent of new urban delivery trucks and 25 percent of long-haul tractor sales by 2032. Replacing diesel trucks with electric will cost the trucking industry tens of billion dollars each year. Electric trucks typically cost two to three times more than diesel trucks and truckers will need to invest $620 billion for charging infrastructure. These costs will be passed on to customers–manufacturers and retailers, who will pass the higher costs on to Americans in higher prices for merchandise.
States Take Different Views
The Biden administration’s push to electrify the U.S. trucking fleet has received a mixed reaction from state and local officials. When TeraWatt submitted its application for federal charging funds, it was sponsored by the New Mexico Department of Transportation and included letters of support from PNM and from Hidalgo County in New Mexico. Texas created an interagency group last year to study the best way to develop truck charging. The state Commission on Environmental Quality is using $86.8 million from the Volkswagen emissions settlement to fund the replacement of diesel-powered trucks and buses and build charging infrastructure.
In Arizona, however, the Corporation Commission rolled back the state’s incentives for renewable energy this year and turned down a utility company’s plans last year to fund a charging program for electric cars. The state commission has not directly addressed electric truck charging. In Hidalgo County, New Mexico, there has also been backlash from residents about the new charging development despite the potential to create construction jobs and bolster the area’s economy. The county is home to only 4,200 residents.
Conclusion
California is at the forefront of phasing out diesel trucks in favor of electric trucks, which will require massive charging infrastructure as the range of long-haul trucks with normal loads is not much more than 100 to 150 miles. Long haul trucks will require frequent stops at charging stations yet to be built and long charging times, which will make an industry with already tight profits even more difficult to survive. Since California has two of the major ports in the country, the California route through desert territory is an important link to the rest of the country. Biden is financially supporting infrastructure companies that are looking to build charging stations in the Southwest, but there are numerous challenges, including finding sufficient power, getting permits for transmission and distribution lines, finding land for new charging plazas along freight routes, and working with power companies to meet the new demand from charging plazas. As those are built, more of the network will follow according to the blueprint, regardless of whether the trucking industry wants to go electric or whether Americans want to pay higher prices for the hauled merchandise.
