Key Takeaways
January 1 marks the beginning of California’s mandate that all new trucks registered must be powered by batteries or hydrogen.
The rule will cover some 1.8 million trucks, as California has the largest fleet in the nation.
Electric trucks cost 50 percent more than diesel trucks but have lower fuel costs in California where diesel costs and taxes are among the highest in the nation.
Large trucking companies can afford the large investment, but they make up just 30 percent of all trucking in California.
California produces much of the nation’s vegetables and fruits and nuts and is the port of entry for most of Asia’s commerce, so California’s trucking mandate is likely to affect national supply chains when it is fully implemented.
Between electricity supply, range, hauling capacity and charging and maintenance, trucking companies are facing huge hurdles to overcome because of California’s new truck mandate.
As of January 1, 2024, any new big rigs registered in California have to be powered by hydrogen or electricity. California’s Advanced Clean Fleets Regulation, which the California Air Resources Board approved on April 28, mandates that companies rapidly phase out diesel semi-trucks, starting with older models, and replace them with zero-emission trucks. The rule affects about 1.8 million trucks, including ones operated by the U.S. Postal Service, FedEx, UPS and Amazon. Due to the large batteries fueling electric trucks, truckers would have to haul lighter loads and have to spend hours plugged in at charging stations, resulting in fewer deliveries and overtime hours. Consumers will ultimately pay for the overtime charges when they purchase the hauled goods and it will take longer to receive them. And, the paucity of charging stations is creating additional problems. If a truck runs out of its battery charge, it could cost as much as $600 for a 10-mile tow.
President Biden and California regulators are pushing Americans into electric vehicles too quickly through mandates and regulations without the needed industry infrastructure, maintenance and charging availability. For example, an electric truck was out of commission for about a month while the manufacturer replaced its battery, which was recalled because of a fire risk. Further, many charging stations that are available are located in shopping-center parking lots, where a semi pulling a trailer cannot comfortably fit alongside passenger cars. That forces the owner to unhitch the trailer, charge the truck and then return for the trailer. Charging times are also a big issue. If two trucks draw electricity from the same station at once, the truck batteries charge more slowly. Getting a battery charged from 25 percent to 93 percent took one truck driver an hour and 35 minutes–time that could be spent working in a diesel truck.
The mandate is also making truck owners spend tens of hours each week for logistical planning as roads and bridges are rated and regulated for weight to minimize the damage of heavier vehicles. And, because electric trucks weigh significantly more than their diesel counterparts, they have less carrying capacity. During the transition, they are used to carry lighter products such as toilet paper and electronics. Using an electric truck to carry heavier goods, such as almonds or fresh produce, means fewer pallets and smaller loads. Since California produces over a third of the country’s vegetables and nearly three-quarters of the country’s fruits and nuts, California’s truck mandate will have a nationwide impact when it is fully enforced.
Truck owners are losing profits due to higher labor costs and inefficiencies operating an electric semi instead of a diesel truck. To break even rather than take the loss, a surcharge is being tacked onto deliveries, for which consumers will ultimately pay.
California Sees Ports as an Area of Opportunity
According to California, electric trucks on the market today can travel from the Ports of Los Angeles and Long Beach — the nation’s busiest hub for container cargo — to many of the warehouses inland without stopping to charge. There are some 30,000 trucks registered with the ports that could be turned into an all electric fleet. California hopes that its stringent rules combined with financial support — truck purchase grants from state agencies total as much as $288,000 per vehicle — will help spur truckers, automakers, warehouse landlords, utilities and charging companies to make the investments needed for a “carbon-free” port truck sector by 2035, when all diesel trucks will be banned from the ports. Success at the ports could help the state meet its goal of decarbonizing all types of trucking over the next two decades, and be a model for similar efforts in New York, New Jersey, Massachusetts, Oregon and Washington. But huge challenges lie ahead.
The port fleets have barely started the transformation. In November, 180 electric trucks, a mere 1 percent of the total, were registered to operate at the Port of Los Angeles and only a single truck was powered by hydrogen fuel cells. Some truck operators claim they have stockpiled diesel trucks and registered them with the ports ahead of the new rule. In November, however, there were 20,083 diesel trucks with access to the Los Angeles port, down from 21,310 a year earlier. Fewer trucks could exacerbate the supply chain problems recently experienced at California ports.
Electric vehicle recalls are also hampering the transition. Harbor Pride Logistics acquired 14 electric trucks to work alongside 32 diesel vehicles in anticipation of California issuing a rule that diesel rigs can no longer be approved to move goods in and out of California’s ports. In August, the manufacturer of the electric vehicles, Nikola, recalled the trucks, planning to return them in the first quarter of the new year. According to the operator of the Nikola trucks, charging the trucks cost roughly 40 percent less than fueling with diesel in California, where diesel costs and taxes are among the highest in the country. But even with the lower fuel costs and the help of state grants, electric trucks cost as much as 50 percent more than the diesel models. And, with maintenance and recalls anticipated in the future, the electric truck maker’s financial situation is a concern to the trucking industry.
Large companies, with big facilities, are best positioned to make the transition. Maersk, the Danish shipping giant, has a fully electric fleet, comprising some 85 vehicles made by Volvo and BYD, the Chinese automaker, for transporting goods up to 50 miles out of the ports of Southern California. And Maersk has worked with landlords to install chargers at its depots.
But, unfortunately for California, smaller trucking fleets do most of the port runs, accounting for some 70 percent at the Los Angeles port and these firms are finding it more difficult to make the transition. The California Trucking Association filed a federal lawsuit against the state’s trucking rules, including one focused on port trucks, contending that they represent “a vast overreach that threatens the security and predictability of the nation’s goods movement industry.” According to the chief executive of the Harbor Trucking Association, the port truck rules lacked exemptions that would help smaller businesses survive the transformation. Getting access to chargers is particularly difficult for smaller fleets, because they are expensive, and many of the truck yard landlords are reluctant to install them, forcing the operators to rely on a public charging system that is only just getting built.
Forum Mobility is one of several companies trying to help the smaller fleets by building public truck charging stations and leasing electric trucks. The company has secured permits to build a depot at the Long Beach port, expected to open next year, that can charge 44 trucks. The depot will run on nine megawatts of electricity, enough to power most sports stadiums, but charging all the port trucks would require roughly the amount of power produced by Diablo Canyon, a California nuclear power station, and thousands of chargers—a huge and expensive undertaking.
Conclusion
California is abiding by President Biden’s wishes and is pushing electric trucks through mandates and regulations that begin this year. While large trucking companies are better at making the transition, there are impediments in the way of meeting California’s goals, including range and charging issues. According to trucking companies, electric models are 50 percent more than the cost of a diesel truck, take hours to charge, cannot travel the range that many companies need to transport cargo and lack a sufficient statewide network of charging stations. Further, there is an issue of where the power is going to come from to charge the trucks because fulfilling future electricity demand will be dependent on having reliable and affordable power sources. California believes that the port fleets are the low hanging fruit and are looking to push that transition.
