Zero-emission requirements are coming, and they’re coming fast.

The United States, along with 18 other countries, are committed to achieving net-zero emissions by 2050. 

Effectively, the standards and restrictions imposed by the Biden Administration would require a majority of all cars sold in the U.S. to be ZEVs (zero emissions vehicles) by 2032.

As part of arguably the most stringent set of federal standards in our country’s history, there would need to be a 65% reduction in emissions by the end of this decade.

Stricter still are the mandates under California’s Zero-Emission Vehicle Program.

Part of California Air Resources Board’s Advanced Clean Cars Package, the Zero-Emission Vehicle Program aims to aggressively reduce the greenhouse gasses emitted from passenger vehicles in the state.

The program goes as far as to require that ALL new cars sold in the state must be zero-emission by 2035.

In theory, the benefits from these extreme requirements would be cutting down the smog that has been plaguing the state’s air for decades. Which in turn would, by the state’s estimates, help avoid 5,500+ heart and lung related deaths.

So far, Californians have been eager to adopt the new eco-friendly standards, with EV adoption outpacing the original goals by over two years.

However…

There is one major industry that stands to be disrupted, possibly irreparably, by these arguably over-aggressive mandates.

Shipping and trucking.

By 2035, the trucks that transport goods to distribution centers from ports and rail yards, must be zero emission. Starting next year, all new trucks purchased by shipping companies must be battery-powered.

India is already deploying EV’s at large scale in their major ports, showing that electric motors are equally capable (if not superior) at hauling heavy freight.

However, even assuming all of the proposed benefits of an all-electric Californian trucking fleet…

Is the timeline too aggressive?

First Things First

A horse walks into a bar… 

Concerned, the bartender asks the horse if it's an alcoholic, to which the horse replies "I think not!" 

POOF! The horse disappears.

If you have a background in philosophy you may already be laughing, as you are familiar with the proposition of Cogito ergo sum, or “I think, therefore, I am”.

But if I explained the concept first, I would be putting Descartes before the horse.

Thank you, thank you.

Saying that California might be putting the battery-powered cart before the horse would be putting it lightly.

As of the state’s most recent reporting, they only have 87 zero-emission drayage vehicles needed to transport shipping containers.

Those vehicles are prohibitively expensive, even with substantial government subsidies.

Considering that forty percent of containerized imports in the United States travel through the Ports of Los Angeles and Long Beach, the pace of the state’s requirements seem to be unrealistic, if not impossible.

The possible consequences could range from further disrupting an already strained supply chain, to driving business to states with less strict requirements.

However, thirteen states have currently pledged to match California’s clean shipping policies.

While many in the industry support the overall goals of the program, most are concerned that California governor Gavin Newsom is getting carried away with the pace at which it’s being rolled out.

With the logistics of establishing battery-efficient routes and installing a sufficient number of charging stations still yet to be worked out, it’s possible that California’s shipping industry is in danger of being sunk.

What are your thoughts? Should there be this much pressure to eliminate diesel trucks? Are there better ways to address greenhouse emissions? Where could California’s displaced shipping industry move to? Let us know at feedback@technologyprofits.com.