ESG (Environmental Social, and Governance)
Next EV Battle Pits Truckers And Red States Against California-Led ‘Cartel’
Preston A Larimer/Unsplash
California state regulators and some truck manufacturers have faced mounting pushback from truck drivers and red states related to its massive push toward statewide electric vehicle (EV) adoption.
After Democratic California Gov. Gavin Newsom signed an executive order in September 2020 to phase out the sale of all new gas-powered vehicles in his state by 2035, the state and several vehicle manufacturers have faced an onslaught of lawsuits related to the new regulations. Now, some truck drivers and red states are attempting to thwart the rules that they allege would slow the supply chain and force the “transition to more expensive and less efficient electric trucks,” according to one trucking group.
The Western Propane Gas Association sued the California Air Resources Board (CARB) in August over its Zero-Emission Forklift rule due to the alleged costs it would impose on California forklift owners and operators. Other trade and trucking organizations criticized CARB’s recently introduced regulations aimed at reducing air pollution.
The American Free Enterprise Chamber of Commerce (AmFree), a business lobbying group, also filed a lawsuit against CARB and several truck manufacturers on Dec. 16, alleging that California has created a “collusive” partnership with heavy-duty truck manufacturers to gradually eliminate internal combustion engines in the state by 2036. The lawsuit critiques some of California’s vehicle regulations as “coercive,” and alleges that some truck manufacturers have “obtained a cozy cartel arrangement” with CARB, that will ultimately pass the alleged costs of complying with new regulations onto consumers.
“CARB’s typhoon of coercive and disruptive regulations had its intended effect: manufacturers bent the knee,” the lawsuit alleges. “In return for recognizing CARB’s suzerainty, however, manufacturers have obtained a cozy cartel arrangement that ensures them a steady stream of supra-competitive profits, subsidies, and tax credits. By acting in lockstep as an industry, this arrangement ensures that the costs will not be borne by the manufacturers, but will be passed downstream to their customers and then to the rest of the country.”
CARB, in July 2023, announced the Clean Truck Partnership — an agreement with several major truck and engine manufacturers aimed at advancing “the development of zero-emission vehicles (ZEVs) for the commercial trucking industry, which includes flexibility for manufacturers to meet emissions requirements while still reaching the state’s climate and emission reduction goals.” The agreement stipulates that California will provide the truck and engine makers who entered into this agreement more time to come into compliance with the state’s emissions requirements.
“The Agreement purportedly allows truck manufacturers limited relief from California’s intrusive and unlawful regulations for heavy-duty vehicles,” according to the lawsuit. “In return, however, the truck manufacturers have sold out their customers and those that depend on them: They have agreed to phase out sales of internal-combustion vehicles in lockstep with California’s dictates, regardless of what the law says or what their customers want.”
Ahead of AmFree taking legal action this month, Republican Nebraska Attorney General Mike Hilgers filed an antitrust lawsuit in November against several heavy-duty truck manufacturers, alleging that California had “embarked on a mission to eliminate the ICE [internal combustion engine] vehicle and mandate the electrification of our nation’s vehicle fleet.” In his suit, Hilgers argues that the automakers will pass compliance costs onto consumers.
“The U.S. automotive industry is at odds with itself,” according to the lawsuit. “On the one hand, it seeks to pacify the growing all-electric movement; on the other hand, it seeks to prioritize its own economic health. In a world where so-called ‘zero-emission vehicles’ (‘ZEV’) repeatedly cause automakers to sustain billions of dollars in losses and conventional internal combustion engine (‘ICE’) vehicles remain both profitable and in high demand, it seems nearly impossible to achieve both ends. The apparent solution to this problem is to eliminate consumer choice and pass on the costs to consumers.”
CARB’s Advanced Clean Fleets (ACF) regulation requires that manufactures sell only zero-emissions, medium and heavy-duty vehicles in California beginning in 2036. “High priority” and federally owned fleets may purchase either ZEVs, near-ZEVs or a combination of the two until 2035 when only ZEVs will meet the requirements, according to CARB. The California board considers entities that “own, operate, or direct the operation of at least one vehicle in California,” and have at least $50 million in annual gross revenue or have a total of 50 or more vehicles under their operation a “high priority” and subject to the regulations.
Hilgers previously filed a lawsuit against California regulators in May, alleging that the ACF rule would “inevitably disrupt the supply chain for all manner of goods” and “impose costs on taxpayers and governments around the country.”
“California’s regulation, which is called Advanced Clean Fleets, masquerades as a rule for in-state conduct,” the lawsuit alleges. “But by leveraging California’s large population and access to international ports on the West Coast, Advanced Clean Fleets exports its ‘in-state’ ban nationwide, creating harms which are certain to reach Plaintiffs’ States.”
The lawsuit was joined by the Nebraska Trucking Association, the Arizona State Legislature and attorneys general from multiple states, including Alabama, Iowa, Kansas, Montana, Oklahoma, South Carolina, Utah, West Virginia and Wyoming, according to a press release.
The Advanced Clean Fleets “requires certain trucking fleet owners and operators to retire internal-combustion trucks and transition to more expensive and less efficient electric trucks. The rule applies to fleets that are headquartered outside of California if they operate within California,” the Nebraska Trucking Association wrote in a press release. “Given California’s large population and access to ports for international trade, this regulation will have significant nationwide effects on the supply chain.”
The Environmental Protection Agency issued a waiver on Dec. 18 to allow CARB to implement its “Advanced Clean Cars II” regulations, which would gradually eliminate the sale of all new passenger cars, trucks and SUVs sold in California by 2035. California had approximately 1,256,646 light-duty EV registrations in 2023, the most out of any state, according to the Department of Energy (DOE).
The Biden-Harris administration introduced various clean energy policies as part of President Joe Biden’s climate agenda, including introducing stringent tailpipe emissions standards in March. The president also vowed to build 500,000 EV charging stations nationwide by 2030, an initiative which has thus far been significantly delayed.
Despite the administration leading a massive push for the adoption of EVs nationwide, several automakers have recently backpedaled their EV goals amid lackluster consumer demand. The steep price tag often associated with EVs has been a deterrent for some consumers, with the average price of electric cars being $55,105 in November, compared to $48,724 for gas-powered vehicles.
President-elect Donald Trump criticized Biden’s EV policies and vowed to repeal them while on the campaign trail, referring to the measures as “insane.” Trump’s transition team is reportedly planning to enact sweeping changes to Biden’s EV policies, including imposing tariffs on battery materials, Reuters reported.
Many American truckers rely on vehicles with internal combustion engines, with diesel, natural gas and gasoline powering 99.9% of all commercial trucks in the U.S. trucking sector, according to the Engine Technology Forum. The average annual vehicle miles traveled for semi-trucks in the U.S. is 62,169, according to the DOE.
Fully electrifying the U.S. commercial truck fleet could cost nearly $1 trillion in infrastructure investment alone, according to a report from Roland Berger released in March by the Clean Freight Coalition. Conventional trucks can travel up to 2,000 miles without refueling, compared to up to 500 miles for current electric semi-trucks, according to a May 2023 report from the Environmental and Energy Study Institute. All electric semi-trucks can also take more than an hour to recharge.
When asked to comment, the American Free Enterprise Chamber of Commerce referred the Daily Caller News Foundation to a press release published on its website. A spokesperson for CARB declined to comment, and Hilgers’ office did not respond to a request for comment.
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