The Climate Bill Is Poised to Electrify Delivery Vans and Trucks

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when it comes in the electrified future of transportation, passenger vehicles get all the love. Automakers are eager to sell you their latest and greatest electric vehicles, like Ford’s electric version of the F-150 truck. General Motors now makes electric Hummers. Tesla, and its fan base, exists. Regulators are helping: California this week formalized its plan to ban the sale of new gas-powered passenger cars and trucks by 2035.

Commercial vehicles, this less glamorous segment of the auto industry, get less attention, but they also need to reinvent themselves to stop or at least slow down climate change. Medium- and heavy-duty trucks alone, meaning those weighing between 19,500 and 60,000 pounds, account for 7 percent of the nation’s total annual greenhouse gas emissions, according to the U.S. Environmental Protection Agency. USA Gas and diesel trucks emit nitrogen oxides that form smog and soot, or NOx, which are linked to asthma and even premature death, affecting about 72 million Americans who live near the routes of goods, according to the US government. Closer to home for many city dwellers, the rise of e-commerce could mean 36 percent more delivery vehicles in the world’s largest cities by 2030, according to a recent report by the World Economic Forum , and a similar increase in their carbon emissions. Meanwhile, in the US, commercial vehicles are projected to decarbonize more slowly than passenger cars, largely because it is so expensive to develop and buy heavier electric technology.

Now some provisions of the new federal climate bill, the Inflation Reduction Act, target these commercial vehicles. The law’s tax credits for buyers of passenger electric vehicles have gained widespread attention, but the support it provides for the purchase of commercial electric vehicles could be more important.

Smaller commercial vehicles, such as vans or pickup trucks, are eligible for a credit of 30 percent of the purchase price, up to $7,500 per vehicle, the same as for passenger vehicles, a good deal. But the bill provides a great deal for buyers of medium- and heavy-duty trucks, whose credit has a much higher limit, at $40,000. In addition, private or commercial buyers who wish to install charging infrastructure at their homes or businesses will qualify for a 30 percent tax credit of up to $300,000, a large portion of the price.

The new policy could supercharge the electric commercial truck and van industry in the US. An analysis released today by the Rocky Mountain Institute, a sustainability research organization, estimates the new law could help urban, regional and long-haul trucks achieve “price parity” with their diesel counterparts years earlier than expected. That’s the point at which the total cost of owning an electric vehicle is the same as gas or diesel vehicles, a particularly important measure for business owners, who track costs more closely than the average driver of the car “Any tax credit will accelerate that parity,” says Eamonn Mulholland, who studies heavy-duty vehicle electrification at the International Clean Transport Council and has researched electric trucks and vans. The new climate bill also provides funding to electrify more postal trucks.

Sixty percent of new truck sales could be electric by 2030, RMI estimates in its new analysis. By 2035, the trucking industry could cut its emissions in half compared to what would have happened without the bill. The climate bill “took a somewhat distant future and changed it to something that is at stake now or something that will be very soon,” says Dave Mullaney, director of RMI, which focuses on carbon-free transportation.

Delivery vehicles, including postal trucks, are particularly attractive candidates for electrification. They travel relatively consistent and short routes, which means it’s easier for companies to plan how to charge them and keep them charged.

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