An ambitious ACF rule will boost California’s economy — state regulators must capitalize on the opportunity

By E2 Interns: Kai Diep and Andrea Guerra

California regulators have a critical opportunity to drive economic growth in the state’s blossoming zero-emission vehicle (ZEV) industry and help achieve state climate targets by advancing a strong Advanced Clean Fleets (ACF) rule with a 100% electric truck sales requirement by 2035. This ambitious yet achievable goal will ensure the state fully capitalizes on our leading clean energy economy, create high-paying jobs, drive innovation, and position California as a leader in the transition to a decarbonized economy by addressing the state’s transportation industry, which is the single largest contributor of greenhouse gas (GHG) emissions.

Strong Targets Drive Economic Growth

We recently urged the California Air Resources Board (CARB) to require all new truck sales be zero-emission by 2035 at the latest. This is necessary, feasible, and economically beneficial to California’s blossoming zero-emission vehicle industry. While there are talks of a weaker requirement, we need ambitious policies to send clear market signals that incentivize industry to innovate and drive investment and job growth here in California.

A 2035 ZEV sales goal for all truck classes will help achieve the goals set forth by Governor Newsom as well as the targets set in CARB’s California’s Mobile Source Strategy. And critically, the longer diesel vans and trucks continue to roam free in ports and busy highways, the longer communities who live and work in these “diesel death zones” — the frontline communities — remain at risk. A strong ACF rule will address this critical public health issue with the urgency needed.

Read our letter here:Advanced Clean Fleets Rulemaking — Business Support for 100% ZEV Sales by 2035

Photo by Dennis Schroeder, NREL 43215

What is the Advanced Clean Fleet Rule?

The upcoming ACF rule requires California’s public and private fleets to purchase an increasing number of ZEVs. Currently, the proposal targets fleets with 50 or more vehicles between class 2b-8, such as minibuses, small and large walk-in delivery vans, utility vehicles, garbage trucks, 18-wheelers, and more. The proposed ACF rule kicks off in 2023 by requiring, among other things, all new drayage trucks to be zero-emission. The ACF builds off the success of last year’s Advanced Clean Truck (ACT) rule which requires manufactures of medium and heavy-duty vehicles to supply an increasing number of ZEVs.

Photo by Dennis Schroeder, NREL 41039

Why a 2035 Target Is Good for the Economy

We’ve seen tremendous advances from the ZEV industry in California and are undoubtedly just brushing the surface of the industry’s benefits and emissions reductions. Adopting a 100% ZEV sales requirement for all new medium- and heavy-duty vehicles by 2035 will capitalize on this industry’s success and provide the policy signals necessary to drive a host of innovation opportunities, job creation, and economic benefits. Looking at how far this industry has traveled is a peak into what’s to come:

  • In 2020, electric vehicles were the state’s most valuable export, producing over $5.6 billion in revenue, overtaking California’s aerospace industry for the first time.
  • The average wage in California’s EV ecosystem is 33% higher than the state’s average wage. An ambitious ACF goal will create more of these good paying jobs.
  • There is an existing total cost of ownership (TCO) advantage for heavy-duty trucks compared to internal combustion engines (ICE) (figure 1), with an average $0.20/mile lower TCO for medium- and heady-duty electric vehicles between Class 2b-8. These savings largely come from ZEV’s lower fuel and maintenance costs and can add up quickly for fleets. A 2035 target as articulated in our letter will ensure California’s businesses realizes these cost savings sooner.
TCO for EVs vs. ICE vehicles, showing an existing TCO advantage for heavy-duty vehicles. Chart is based on data in the 2035 2.0 The Report: Transportation

But past success is only one indicator of the opportunity. One study based on an industry survey found that meeting California’s light-, medium-, and heavy-duty EV infrastructure goals would support around 70,000 job years through 2030:

High scenario workforce estimates to meet light-, medium-, and heavy-duty electric vehicle infrastructure demand in California from 2021 to 2030.

CARB is expected to finalize the ACF rulemaking in 2022 with the rule coming into effect in mid-2023. Through the ACF rule, CARB should require all new medium- and heavy-duty vehicles sales to be ZEV by 2035. Over the past few years, rapid technological change and the pending crisis caused by air pollution and climate change has caused a significant shift in how policymakers, industry, and the public view transportation electrification. Whereas a few years ago 100% ZEV sales target may have seemed unattainable, a goal of 2035 is now technologically feasible and critical to meeting Governor Newsom’s executive order and the state’s climate and clean air objectives.

To drive economic development in California, meet the urgency of the climate crisis, and reduce public health impacts in our state’s frontline communities, CARB must be bold. A 100% ZEV sales requirement across medium- and heavy-duty vehicle classes by 2035 is the smart move. By adopting this recommendation, CARB’s ACF will truly be good for California’s economy and for our environment.

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