Politico

Truck companies' electric enthusiasm doesn't extend to policy


Some of the world’s largest truck engine manufacturers say they’re all-in on electric vehicles. So why is their main trade group still lobbying against them?

Volvo and Daimler are rolling out pledges to transform their fleets into electric versions, citing customer demand for cleaner vehicles and the need to address the transportation sector’s contribution to climate change.

In January, Volvo said it would try to sell 50 percent of its heavy-duty trucks as EVs by 2030, and the company is trumpeting new models and sales figures. Daimler is touting investments in truck charging infrastructure along the West Coast and a million miles driven in its electric Freightliners. Navistar is making the case that its electric school buses can help slash greenhouse gases.

Yet the trade group they all belong to, the Truck and Engine Manufacturers Association, is arguing that federal and state rules intended to boost numbers of zero-emission trucks are too onerous.

Electric cars are just starting to gain traction in the United States, after years of incentives and tightening tailpipe emissions standards. Now regulators are increasingly turning their attention to trucks as the next frontier for cutting motor vehicle pollution. They’re much harder and more expensive to convert to electric than passenger vehicles due to their weight and the distance they’re typically driven.

EPA is holding a hearing Tuesday on its newly proposed limits on emissions from some of the heaviest vehicles, including tractor-trailers, buses, delivery vans and dump trucks, starting in 2027. The agency envisions the rules resulting in the sale of 9,400 electric trucks in 2027 across all weight classes and manufacturers — about 1.5 percent of the expected total sales of 581,000 trucks. Electric trucks can also count toward manufacturers’ requirements under EPA’s proposed limits on nitrogen oxides, which cause smog and particulate pollution.

EMA’s president, Jed Mandel, said the demand isn’t necessarily there. “Their customers haven’t bought them yet, and there’s no guarantee they will,” he said of Volvo and Daimler’s plans. Mandel also argued that EPA’s proposal creates more regulatory uncertainty because the agency had already settled on greenhouse gas standards through model year 2027 under the Obama administration, which he said are already “very challenging.”

Reopening the standards “is kind of like EPA moving the goal posts or Lucy pulling the football away from Charlie Brown when he tries to kick it,” he said. “The fact that manufacturers are actually doing that, they shouldn’t be punished for it by saying, ‘Now that you did it, we’re going to make the rules more stringent.'”

Environmentalists are pushing back against EMA. Sierra Club and 18 other groups sent the organization a letter Monday urging it to support stronger standards.

“You look at their Twitter feed and their media, you think of course all their policy positions are going to be consistent with promoting electric trucks,” said Adrian Martinez, a senior attorney with Earthjustice. “But then they rely on these industry associations to do the dirty work of fighting policies.”

Only about 6,000 of the roughly 4.5 million medium- and heavy-duty trucks on U.S. roads last year were battery-powered, according to ACT Research, a firm that does analysis and forecasting for the commercial vehicle industry. Most of them were buses, which typically make shorter trips than trucks.

Federal and state officials have started pouring billions of dollars into electrifying the industry. California has already provided nearly $1 billion in incentives for companies to buy electric trucks and buses and made another $430 million available last month. The legal settlement with Volkswagen over cheating on emissions testing has provided roughly another $1 billion nationwide. And medium- and heavy-duty vehicles are expected to benefit from the $7.5 billion for charging facilities in last year’s bipartisan infrastructure law.

The rules that companies are opposing are sometimes weaker than their own voluntary targets. Volvo’s self-assigned goal of 50 percent electric trucks would result in the company producing at least 15,000 heavy-duty EV trucks in 2030, assuming it doesn’t decline from 2020 sales levels and chooses to meet its target within the North American market rather than by overcomplying elsewhere.

EMA and truck manufacturers are also lobbying against state-level rules that go further than the EPA proposal. California already has a regulation, approved in 2020, requiring manufacturers to sell increasing percentages of zero-emission trucks. Five other states have adopted it as part of California’s ability under the Clean Air Act to set stricter-than-federal vehicle emissions rules.

The lobbying group has lodged objections to other states considering adopting California’s rules over the past year. EMA argued in Oregon, New York, New Jersey and Colorado that California’s standards would be too expensive. In Maine, it said regulators would have to readopt the rule if California updated it, so “it only makes sense … to wait and see what the final revised ACT Rule looks like before moving to opt-in to it.”

EMA argued to a group of Northeast states considering a regional agreement on zero-emission trucks that adopting California’s rules on nitrogen oxides wasn’t warranted because the region’s air pollution wasn’t as bad as California’s.

Volvo has also lobbied against California’s rules, arguing that other states aren’t providing enough funding for charging infrastructure and customer incentives. It wrote in June 2021 that New Jersey’s adopting the rule “will not ensure the penetration of zero emission trucks in the marketplace” and that “realistic national standards and regulations offer the best way to prevent unintended consequences and detrimental implications for state-based stakeholders.”

Truck manufacturers’ public enthusiasm for electric vehicles has multiple aims, a market analyst said.

“Some of it’s to please Wall Street, some of it’s to please regulators and stockholders,” said Michelle Krebs, an executive analyst with Cox Automotive. “Watch the action, not just read the press release. I keep hearing so-and-so automaker is way ahead of everyone else on EVs. Really? They’re not selling any.”

Regulators aren’t surprised by the two-sided communications strategy. Car companies have followed a similar playbook. A 2014 study of automakers’ attitudes toward California’s sales mandate for zero-emission light-duty vehicles found that while individual companies gradually became more compliant, industry coalitions “remain relatively defensive in their political actions.”

“Companies don’t like to be told what to do, but they’re worried about their reputation and their image, so that’s why they hide behind their trade associations,” said Dan Sperling, a member of California’s Air Resources Board and head of the University of California, Davis’ Institute for Transportation Studies, who co-authored the study.

More broadly, experts say, legacy truck and automakers are feeling threatened by the likes of Tesla, Rivian and other splashy manufacturers with sky-high valuations.

“Look at the valuations of electric vehicle companies and look at the value of the legacy companies,” Sperling said. “Tesla is worth more than most of the rest of the industry put together. This is on the light-duty side, mostly, but even on the truck side, you’re seeing these startup companies that haven’t produced more than a handful of any EV trucks having multi-billion-dollar valuations.”

“There’s tremendous uncertainty, and to be fair to the companies it’s a massive investment that they’re being asked to make, and so a prudent risk-mitigation strategy is to go slower.”

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