Impacts of the Advanced Clean Fleets Regulation on the Trucking Industry, Consumers, and the Economy
Prepared by Capitol Matrix Consulting for California Fuels + Convenience Alliance (CFCA)
October 2024
The Advanced Clean Fleets (ACF) Regulation, adopted in April 2023, aims to phase out gas- and diesel-powered trucks in California by 2042, with a gradual shift to zero-emission vehicles (ZEVs) starting in 2026. However, CARB’s withdrawal of a federal waiver in January 2025 means key enforcement provisions are currently paused. The regulation could raise trucking costs by up to 80%, increasing household expenses by $2,500 annually. Hidden costs like lost fuel tax revenue and reduced efficiency add further strain, while lithium battery fire risks may drive up insurance and safety concerns. With trucking moving 75% of California’s cargo, these changes could disrupt the economy and increase prices across the board.
What does this mean for you? Here's four key takeaways:
The regulation, on average, could increase trucking costs by up to 80%, leading to a 3.6% rise in the price of goods and services. For the average household, this means an extra $2,500 per year just to keep up with current living standards.
Trucking moves 75% of the state's cargo and is vital for the economy. Disruptions or cost increases in trucking could lead to higher prices, supply shortages, and widespread impacts on industries and households.
While electric and diesel trucks have similar fire rates, lithium battery fires are more dangerous-burning hotter, emitting toxic fumes, and being harder to extinguish. This could increase insurance rates and create hazards in high-risk areas like fuel terminals and tunnels.
CARB's cost estimates for electric trucks ignore hidden expenses like lost road taxes and reduced efficiency. Taxes from diesel fuel fund essential infrastructure, and electric trucks need more stops and carry less cargo due to heavy batteries, which adds to the cost.
The Trucking Industry is Crucial to California's Economy
Directly Supports
- $29 Billion in gross domestic product
- 265,000 jobs
- $25 Billion in earnings
Indirectly Supports
- Tens of thousands of additional jobs in maintenance, fueling, and logistics industries
- Moves 75 percent of all cargo California, connecting farm, manufacturers, small businesses, retailers, and households
All These contributions are put at risk by the ACF Regulations
The ACF Regulation will Sharply Raise Trucking Costs & Risks
CARB severely underestimates the cost imposed by the ACF regulation.
For example, its economic impact analysis of the regulation:
- Seriously understates the costs of electricity-powered trucks.
- Assumes no replacement of the $1.35 per gallon in sales and excise taxes on diesel that support roads, highways, and bridges.
- Fails to account for efficiency losses related to shorter range, longer fueling times, and reduced cargo capacity of battery-powered big-rigs.
Adjusting for these real-world factors, fleet ownership costs for electric-powered trucks will exceed their diesel-powered counterparts by 22 percent for small cargo vans, and up to 136 percent for "Class-8" big rigs using on-highway charging. The weighted average cost increase is about 80 percent.
Other Risks Posed by the ACF Regulation
- The ACF mandate will require massive increases in electricity supplies.
- Similarly large increases will be resulting from electrification of other major sectors of the state’s economy.
- Combined, these changes will require massive and costly investments in California’s electrical grid. California is not on track.
- If the grid expansion fails to keep pace with growing demand, California will face electricity rationing, supply disruptions, and blackouts.
- Lithium fires burn hot, emit toxic fumes, are hard to extinguish, and have a tendency to reignite.
- Recent fires involving lithium batteries have resulted in extensive damage and lengthy road closures across California.
- This leads to major safety concerns, especially for trucks hauling flammable liquids. Lithium battery fires at a petroleum fuel terminal, a gas station, a charging depot, in a tunnel, or on a bridge would have catastrophic consequences.
- The enhanced fire risk also raises questions about insurance rates, further raising costs to trucking industry and consumers.
Higher Trucking Costs Will Hurt Businesses & Consumers
$2,500 increase per year
The increase in trucking costs resulting from the ACF will raise prices of goods and services purchased by the typical California household.
The impact will be regressive, hitting low-income households the hardest.
A Better Approach
Reliance on incentives and flexible policies that enable fleet owners to choose cost-effective options for cutting emissions.
One such option is renewable diesel, which has carbon intensity that is 71% less than petroleum diesel and 53% less than current electricity generation.
