A new analysis suggests that transitioning America’s truck fleet to electric vehicles could dramatically increase operational costs for businesses, compounding existing economic pressures.
By yourNEWS Media Newsroom
A recent study conducted by Ryder Systems reveals significant financial challenges associated with converting America’s medium- and heavy-duty truck fleets to electric vehicles (EVs), aligning with the Biden administration’s environmental goals. According to the analysis released on Wednesday, transitioning to light-duty EVs, such as transit vans, could lead to a 5% increase in annual costs. More dramatically, the shift to medium- and heavy-duty electric trucks could spike costs by up to 114% per year for businesses already facing economic strains.
The Biden administration has taken steps to accelerate the shift towards greener transportation, including finalizing new emission standards in March that mandate a significant portion of new heavy-duty vehicles to be electric or zero-emission by 2032. Additionally, the administration has developed plans to expand the necessary charging infrastructure nationwide.
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Karen Jones, executive vice president at Ryder, commented on the current limitations and challenges of widespread EV adoption in a press release. She emphasized that while there are specific applications where EV adoption is feasible today, the broader application is hindered by underdeveloped technology and infrastructure. She warned that premature regulatory pressures could lead to further supply chain disruptions, increased transportation costs, and additional inflationary pressures.
The study further highlights the potential inflationary impact on the economy, estimating an annual increase of between 0.5% and 1%. This comes at a time when inflation rates are already higher than desired, with a 3.5% year-over-year increase as of March, which overshoots the Federal Reserve’s target of 2%.
Cost increases vary by state; for instance, class 8 heavy-duty trucks in California could see an annual cost increase of 94%, primarily due to a 501% surge in equipment expenses. In contrast, fuel savings only account for a 52% cost reduction. Georgia faces even steeper costs, with increases projected at 114% due to higher equipment and labor costs, along with reduced payload capacity.
In addition to setting ambitious targets for light-duty vehicles, the EPA has finalized regulations requiring 67% of all new light-duty vehicles sold after 2032 to be electric or hybrid. Furthermore, around $1 billion from the Inflation Reduction Act has been allocated to support states in replacing some heavy-duty vehicles with EVs, such as delivery trucks and school buses.
Despite these investments, the expansion of EV charging infrastructure has encountered significant hurdles. The administration committed $7.5 billion in 2021 for the development of charging stations, yet operational challenges persist, contributing to concerns over “range anxiety” among EV users.
