California Looking to Ban the Sale of Diesel Trucks
A couple weeks ago, the California Air Resources Board (CARB) voted to ban the sale of NEW diesel semi-trucks by 2036, and to require all trucks to be zero-emissions by 2042. CARB has said that the ban is necessary to protect the environment and public health from greenhouse gas emissions. Currently, approximately 90% of all semi-trucks purchased as diesel, with the rest comprised of CNG/LNG, and some electric vehicles. CARB has indicated that their goal is to have fleets be 100% electric by 2035, 2040, or 2045 depending on the size of the fleet.
This seems like an ambitious goal, being only 12 years away. While truck manufacturers are certainly pouring investments into developing electric vehicles, the hangup will clearly be the infrastructure around these vehicles (electric grid, charging stations, etc). California has dedicated billions of dollars to upgrade their electric grid and infrastructure in the next few years. With California recently announcing they are expecting a $32 billion budget deficit this year, it’ll be interesting to see if any future projects (like upgrading the electric grid infrastructure) will be impacted, if at all.
The American Trucking Association has indicated they are committed to moving towards zero-emission vehicles, but at a more measured pace. One of ATA’s top issues is educating lawmakers about the risks of moving too quickly towards electric and fuel cell vehicles.
California seems to be leading the change on some major aspects of the transportation industry with AB5 and now the push for the industry to use non-diesel trucks. We’re still waiting to see how AB5 will play out in the court system, and it will certainly be a while before we know how the push to electrify the trucking industry goes.
Andy is a CPA and trusted advisor with 15 years of experience providing tax, accounting, assurance, and consulting services to transportation industry owners and operators. He is a tax principal with CLA in the Minneapolis, MN office. He also consults with high net worth individuals and owners of closely-held transportation businesses on all aspects of tax planning, estate planning, and retirement planning. Andy is also the tax leader for transportation industry across CLA.
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