The trucking industry’s push toward electrification seems to have run out of juice.
A combination of California’s move away from mandating electric trucks at its ports and the Chapter 11 bankruptcy filing of electric-truck manufacturer Nikola has pulled the plug on trucking’s push toward electrification.
California’s move to electrifying port drayage trucks around ports “was excessively ambitious,” Daniel Sperling, a professor at the University of California-Davis, told the New York Times.
Under state law, California is requiring truck manufacturers to sell an increasing number of zero-emissions trucks. But California officials pulled out of that plan after the Trump administration balked at issuing a federal waiver. California has about 30,000 drayage trucks at its ports.
The move, while a defeat for clean air advocates, is a victory for the local draymen who work on razor-thin margins. Often they use decades-old, hand-me-down trucks for local drayage services. Those trucks can be had for less than $40,000 – a sharp cry from the $150,000 for a new electric truck.
That price includes federal tax incentives, which are unclear in the future. Without those incentives, a new Class 8 electric truck can run as high as $500,000.
Because the California clean air rules would have been stricter than the federal regulations, that plan would have required a waiver from the Enviromental Protection Agency (EPA). The Biden administration failed to do so in its final weeks, and there was no indication one was forthcoming from the Trump administration.
“It makes me nervous,” Rudy Diaz, CEO of Hight Logistics, a Long Beach, Calif.-based drayage company that invested in 20 electric heavy duty cabs, said recently. Now that his fellow draymen are not required to file suit, he fears that the competition will be able to offer better rates because they are using cost-saving diesel trucks.
Trucking interests long have warned of the prohibitively high cost of converting the nation’s 3 million or so long-haul trucks to electric. Some estimates say that price tag could exceed $1 trillion.
“The trucking industry is fully committed to the road to zero emissions, but the path to get there must be paved with common sense,” Chris Spear, president and CEO of the American Trucking Associations (ATA), has said.
Whatever the cost, Nikola won’t be around to cash in on it. The Phoenix-based electric truck manufacturer said it has stopped manufacturing electric heavy duty trucks after it said it had lost $3.6 billion since its inception in 2015.
Nikola, once the darling of Wall Street with a one-time market capitalization greater than that of Ford Motor Co., was rocked by scandal. After once having a market capitalization in excess of $30 billion, Nikola ended listed as a penny stock.
That came after revelations that Nikola and its founder, Trevor Milton, rigged clean air results from its trucks. In one promotional video, a Nikola electric truck was shown supposedly running at top speed without a whisper of noise. Turns out the promo was rigged with the truck running downhill with its engine off.
Nikola joined a long list of electric-vehicle companies to go belly up. Lordstown Motors, which took over a closed General Motors plant in Lordstown, Ohio, went bankrupt last year after the Securities and Exchange Commission (SEC) charged it with misleading investors.
Others on that list of defunct electric vehicle entities include British start-up Arrival, Rivian (an electric pickup truck manufacturer), Fisker and Electric Last Mile Solutions.
Energy Secretary Chris Wright recently slammed efforts to achieve net zero carbon emissions by 2050 as “sinister.” Wright’s remarks came while speaking at the Alliance for Responsible Citizenship (ARC) forum in London.
Wright addressed pushes to reach net zero emissions within the next 25 years. The U.S. Department of Energy defines a net-zero economy as averting or removing “as much greenhouse gas as it produces,” according to its website. The U.S. had emphasized its commitment to reaching such a status by 2050.
This story originally appeared on Logistics Management.
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