Climate United’s plan to spend $250 million to purchase 500 Class 8 electric trucks makes a great headline. But beyond the benefit to owner-operators and small fleets, the impact involves the future of zero-tailpipe-emission freight hauling.
More than cleaning up the ports
Climate United is stewarding a $6.97 billion grant of Inflation Reduction Act (IRA) funds awarded by the Environmental Protection Agency. The immediate goal is to help clean up the nation’s ports, where older and dirtier trucks spew enormous amounts of smog-forming pollution waiting to enter and leave.
California allows only zero-emission trucks to come and go at the ports of Los Angeles and Long Beach for free. Diesel-fueled trucks pay $10 to a Clean Truck Fund per twenty-foot equivalent unit they haul. The fees are used to help reduce the cost of electric trucks. By 2035, the state has mandated that only zero-emission drayage trucks operate in the ports.
The addition of 500 electric trucks over the next three years will help that cause by replacing legacy diesel trucks. The purchase also could help boost slowing adoption of battery-powered trucks. Smaller fleets will benefit from leasing the trucks from Climate United. They will qualify for most of a $40,000 IRA tax credit for which they might otherwise be ineligible.
Establishing a virtuous cycle
But the real benefit is that Climate United will begin to establish how much a used electric truck is worth. Until the used value of an electric truck is known, a market is non-existent. Banks typically shy away from lending for an asset without a defined future value…