Why California’s Ban on Gas and Diesel Vehicles Matters

In September, California Gov. Gavin Newsom announced that his state will ban the sale of new light-duty gasoline and diesel vehicles, effective in 2035. And by 2045, new medium- and heavy-duty trucks sold in California must also be zero-emissions.

So, what does this news mean for utility fleets?

It means that the transportation industry is trending toward an all-electric future, with vehicles powered by battery only, hydrogen or a hybrid of both “fuels,” depending on a vehicle’s range requirements and duty cycle.

But how does California’s ban impact vehicle sales – and your fleet – outside the state?

Think about it. If California were a sovereign nation, it would rank as the world’s fifth-largest economy. And the state accounts for a massive share of U.S. auto sales. This means that when California talks, the automakers listen.

After all, it doesn’t make financial sense for most OEMs to dedicate one slice of their manufacturing capacity to California-compliant zero-emissions vehicles and then the rest of their capacity to conventional gas and diesel vehicle production.

Instead, OEMs are looking to achieve economies of scale to lower costs and grow profits. So, what’s more than likely to happen is that the California zero-emissions standards will drive what OEMs build and sell throughout the U.S. And the automakers appear to be embracing this “electrification mandate” as the future of the industry.

In the past year, most OEMs have announced significant investments in electric vehicles, with new models expected to launch in the next few years. And despite the plant shutdowns in the spring and early summer due to the coronavirus, automakers have signaled that they’re still moving full speed ahead with their EV rollouts. 

Ford said that its all-electric F-150 pickup would start production in mid-2022, along with the electric Transit full-size cargo van. And a new player in the market, Lordstown Motors, recently unveiled its all-electric pickup for the fleet market, with production expected to begin in 2021. Also, most medium- and heavy-duty truck OEMs, including Freightliner with its eCascadia and eM2, have made big bets on electric trucks.

Look, I’m not saying that electric trucks and vans will be viable for commercial fleets in the near term – say, the next five years or so. But in eight to 10 years? That might be a different story.

While California is the only state (so far) to issue a ban on new gas and diesel vehicles – and it doesn’t go into effect until 15 years from now – the impacts might be felt much sooner.

Will you be ready?

Sean M. Lyden
Editor