Biden mandate requiring heavy trucks to be EVs will raise inflation by as much as 1%, study says
While the Biden administration’s electric vehicle mandates continue to run up against roadblocks — primarily, consumers are reluctant to buy the EVs at rates President Joe Biden wants — it’s also looking to force trucking companies to transition their trucks over to electric.
The plan has been met with considerable opposition from the trucking industry. Just about every product Americans consume at some point — and sometimes multiple points — along the supply chain shipped by vehicles is impacted by the rules. A new study shows that the cost of this mandated transition will boost Biden’s already high inflation rates up another percentage point.
The Institute for Energy Research, a free-market energy think tank, predicts that due to the costs of this forced transition, businesses will resist the mandates. Should the mandates proceed despite the objections from industry, the transition to electric trucks will disrupt supply chains and drive up the costs of most goods.
"Unachievable"
On the heels of its tailpipe emissions standards that are mandating a large portion of passenger cars be electric by 2032, the Biden administration passed emission standards for heavy duty trucks.
Under the currently proposed rules, about 30% of heavy-duty vocational trucks, which includes delivery trucks, garbage trucks, cement trucks, tractor-trailer trucks and school buses, will need to be zero emission by 2032. The rules also require that 40% of day cabs, which are heavy-duty trucks without a sleeper cab, will need to be zero emission vehicles.
While the rules don’t specify what technology is required to meet those standards, in most cases it will need to be electric.
The American Trucking Association “opposes this rule in its current form because the post-2030 targets remain entirely unachievable given the current state of zero-emission technology, the lack of charging infrastructure and restrictions on the power grid,” Chris Spear, president and CEO of ATA, said in a statement at the time the rules were finalized.
While the Biden administration is mandating this transition nationally, California is setting even stricter standards for truck fleets operating in its borders. Since so much freight traffic moves in and out of California, many national companies will need to transition their fleets to comply with California standards.
“I don’t see it happening. If California gets too strict, I think a lot of the trucking companies will kind of say, ‘Look, we’re not going to do business in your state. You’re going to be on your own,” Darryl Orr, a long-haul trucker, told Just the News.
Both the federal and state rules are facing a number of legal challenges from industry groups and more than a dozen states.
Conversion costs
Ryder Systems Inc., the nation’s largest trucking and logistics company, produced a study calculating the cost of a forced transition to zero-emissions trucking fleets on businesses and consumers. These costs include the purchase price of the vehicle, maintenance, drivers, range, payload, diesel fuel versus electric, and the required charging time. The study looked at the costs of such a transition in California and Georgia.
The company has, according to the study, 250,000 commercial trucks under management, which provides the company with extensive historical data on current market prices for electric vehicles (EV) and internal combustion engines (ICE). The study considered three classes of vehicles, from delivery vans hauling 100 to 230 miles, to large tractor-trailer rigs hauling 100 to 500 miles.
Converting vans from diesel to electric results in only a 3% total cost increase in California, and a 5% total cost increase in Georgia. Electric vans, according to the study, cost 216% more than ICE vans, which is where most of the increase comes from. California ends up with lower costs than Georgia primarily due to the difference in cost of fuel versus electricity.
Converting heavy-duty rigs — responsible for moving the lion's share of consumer goods — gets to be much more expensive. An electric rig is five times more expensive than a diesel-powered one. In California, the fleet will have 50% in electricity costs over diesel, and 48% in Georgia. On every other cost, the electric vehicles are much more expensive. Overall, the electric fleet of heavy-duty rigs is 94% higher in California and 114% higher in Georgia over that of an ICE fleet.
Using data from the American Trucking Institute, which estimates that 72% of goods in the U.S. are transported by trucks, the increased cost to comply with California’s and the Biden administration’s emissions standards will add approximately 0.5% to 1% to overall inflation.
The study also notes that there is no charging network that would allow for legally mandated rest breaks and vehicle charging at the same time. Citing data from the Clean Freight Coalition, the investment in charging infrastructure and electric service upgrades would cost $1 trillion. Without this infrastructure in place, the study notes, a conversion from ICE to EV wouldn’t be successful.
“Ryder’s analysis underscores the reasons EV adoption for commercial vehicles remains in its infancy. In addition to the limited support infrastructure and EV availability, the business case for converting to EV for most payload and mileage applications, is extremely challenging,” the study concludes.
Range
Orr said that a trucker will typically spend about seven minutes putting about 150 to 200 gallons into his or her truck. That will take the 200-gallon truck about 1,100 to 1,200 miles, according to Orr, or about 157 miles per minute spent refueling. The distance a 200-gallon can go exceeds federal limits of 11 hours of drive time per day.
Tesla produces an electric semi-truck, which the company claims can travel 500 miles on a single charge. It takes 30 minutes of charging to get 70% of that range back. That means an electric trucker would spend more than an hour more charging to go the same distance as a diesel-powered rig.
On top of driving up the costs for trucking companies and consumers, the rationale for the policies are also questionable. Mark P. Mills, senior fellow with the National Center for Energy Analytics, produced a study showing that the high emissions involved in producing electric vehicles leaves uncertainty as to whether there is any net reduction in emissions over the life of the vehicle. This gain becomes even less likely with larger vehicles.
Despite all the cost and criticisms, the Biden administration has remained committed to its EV mandates. Unless that changes, American consumers will see the impacts at the cash register.