Clean Energy Stakeholders Petition for Transparent Subsidies
Generally speaking, electric trucks are more energy efficient than diesel trucks, when comparing the amount of energy it takes to go a mile (effective miles per gallon is the commonly used metric to compare the apples of electricity to the oranges of diesel). With that said, there are many more factors in play when it comes to trucking companies making the decision to transition to electric. Perhaps the biggest one is price. To that end, a coalition of those with an interest in clean energy have sent letters to California, New York, and Washington in asking regulators to require full truck price disclosures from manufacturers to receive subsidies.
Details
If a state offers a $50,000 subsidy on a heavy-duty electric truck, what is stopping the manufacturer from just upping the price $50,000 or some fraction thereof? That is the question the stakeholders are asking regulators to enforce. The submission submitted to the California Air Resources Board (CARB) says prices, “are negotiated behind closed doors, and vary widely between buyers”, which gives “manufacturers extraordinary market power—allowing them to extract higher prices from public programs and private fleets alike, with little accountability.”
It is no surprise that since the start of Donald Trump’s second presidential term the federal government has taken a more “hands-off” approach to managing cleaner vehicles, believing that the market will eventually let the best technology win out in the end. Some states have gone their own way, with California’s Clean Truck and Bus Vouchers program still going strong.
Conclusion
The stakeholders pushing regulators to adopt these measures hope that by doing so, the subsidies are more transparent to the end user and can prevent truck manufacturers from using it to reap additional revenue.
Currently the average price for a model year 2024 electric Class 8 truck is $324,000, which is an increase from what it was in the Biden years as the Trump Administration lets off the accelerator. This is roughly two-and-a-half times the rate for a comparable diesel truck, giving the tried-and-true fossil fuels an advantage that simply cannot be covered by saving money at the pump.
As technology improves and the downsides of electric trucks decrease, eventually the transition to clean energy will make more sense. With price being perhaps the single largest factor in stopping that transition, it may be a good long while before that happens.
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