3 Potential Winners, Other Than Tesla, from California’s New Zero-Emission Truck Rule
California’s Air Resources Board passed a new rule that requires commercial trucks and vans sold in the state by 2045 to be zero-emission.
Why it matters: It’s predicted that the regulation will bring over 300,000 electric trucks, including 17,000 semi trucks, to California by 2035. This could benefit companies already developing and designing zero-emission trucks and vans, such as Tesla, Daimler, Nikola, and Rivian.
Environmental impact: Even though diesel trucks only make up 7 percent of vehicles on the road in California, they account for 70 percent of the state’s smog-causing pollution and 80 percent of diesel soot emitted, according to CARB. Additionally, 7 of the top 10 smoggiest cities in America are in California, according to the American Lung Association.
Potential Winners: Outside of Tesla, which announced its Class 8 semi truck in November 2017, there are a handful of other companies that could capitalize on the new rule, according to Cowen analyst Jeffrey Osborne.
Nikola: “We see California aligning well with Nikola's electrolyzer based station build out in California and can leverage LCFS credits (which are not in our model) as well as this new mandate. We believe over time the company could have 10 to 12 hydrogen stations in California. We see the BEV truck sales having the strongest presence in California and the Northeast United States and anticipate volume production beginning in the Summer of 2021 and hand built demonstration units to hit the road with potential fleet customers later this year.”
Workhorse Group is “poised to benefit with its new C-1000 delivery van, which in the past had to argue its premium upfront cost would lead to a lower total cost of ownership over time. The company has a strong relationship with long-time customer UPS and FedEx is currently testing a fuel-cell hybrid Workhorse truck with Plug Power's fuel cell in the Albany, NY area.”
Plug Power is “transitioning from a fuel cell vendor focused largely on the material handling (forklift) market to an end-to-end system provider, offering onsite hydrogen generation through the Giner acquisition as well as distribution through the United Hydrogen acquisition, which is in the process of building out a depot in the Palm Springs, CA area.”
What’s Next: California’s zero-emission trucking rule could spread to other states. According to The New York Times, California is already in talks with seven states and the District of Columbia about adopting the rule.
