With slightly tightened restrictions under the California Advanced Clean Trucks (ACT) rule having gone into effect at the start of 2025 and the prospect of numerous states following the Golden State’s lead, the regulatory world has been awash in dueling communications on the subject.
Unlike its sister regulation, the Advanced Clean Fleets (ACF) rule, ACT has the waiver from the Environmental Protection Agency that it needs to be implemented in California. The rule provides a combination of carrots and sticks to move OEMs toward producing more zero-emission vehicles (ZEVs) to be sold into California.
The ACF – which awaits a decision on its own waiver request from EPA, expected in the remaining days before the end of the Biden administration – is a similar set of runways and regulations to move the state’s truck fleet toward ZEVs. But the ACF is targeted at vehicle buyers, not manufacturers.
The ACT technically went into effect on Jan. 1, 2024. But enforcement was put on hold while the waiver request made its way through the EPA.
The degree of attention that the ACT has been getting nationally stems from the numerous states that have decided to follow California’s lead – and the problems that critics argue those decisions could cause.
Long before the introduction of ACT and ACF, California’s more stringent rules on vehicles and its gigantic population created concern among automakers and engine manufacturers about the “two-car” problem: An OEM would have to make one type of vehicle to meet California’s standards and one with lower environmental standards for the other 49 states. The default choice becomes making a car for California standards, and the rest of the country ends up following along.
That reality is why states regularly challenge waivers on rules granted by the EPA to California, even though ostensibly a state regulation shouldn’t impact other states. So far, California has prevailed in legal battles regarding the waivers and the right to adopt its own rules.
The story on how various factions are lining up over the ACT can be told to some degree by the missives that have been flying in recent weeks, along with a lawsuit. Here are some of the communications that have been sent on the issue.
State trucking associations to governors: The presidents of the trucking associations of Colorado, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island and Washington sent a letter to a group of their respective governors Dec. 17. Those states were chosen because they have agreed to align themselves with California’s rules.
After reviewing the steps they have taken toward cleaner emissions over the years, the association heads told the governors that “the damage that our industry will incur by implementing ACT on its current rushed timeline will curtail these crucial efforts as clean diesel truck availability will become limited, keeping older, heavier polluting trucks on the road.”
That has been a common theme among critics of the ACT: Since ZEVs are expensive, a ZEV requirement on new purchases means buyers no longer purchase newer internal combustion vehicles that burn cleaner than older models. But they also delay buying a costlier ZEV as long as possible, and the end result is that an older, less efficient vehicle stays on the road longer than it would have otherwise.
The signatories of the letter then bring up a point that has been making its way through the industry of late: Uncertainty surrounding the clean truck rules and concerns about whether there is adequate infrastructure to charge ZEVs is causing dealers to hold off stocking inventories, leading to shortages.
“Right now, dealers across the country are struggling to find a way to navigate this situation,” the letter said.
The trucking sector, according to the association heads, “supports the goal of ACT.” But the approach they say they prefer is to “work together to develop a commonsense solution which supports each of our states’ business and environmental goals.”
ACT states to OEMs: More than a month before that letter was sent, the governors of the states aligned with ACT sent their own letter to members of the Truck and Engine Manufacturers Association.
The letter defended the ACT, calling it flexible and not a body of mandates, and sought a meeting to discuss “implementable solutions to increase ZEV adoption.”
The Nebraska lawsuit: An action in state court in Nebraska filed in November in Lincoln County – which is not the home of state capital Lincoln – alleges a “conspiracy” by California to have the entire nation adopt its ZEV targets in trucking. Other plaintiffs in the case include Renewable Fuels Nebraska, the ethanol trade group for that state whose market is threatened by any move to ZEVs.
But the defendants in the case are not agencies from California. Instead, they are prominent engine makers, including Daimler Truck North America, Navistar, Volvo North America and Paccar (NASDAQ: PCAR). The Truck & Engine Manufacturers Association is also a defendant.
The engine manufacturers are targeted because they signed, in July 2023, the Clean Truck Partnership (CTP) with California. In exchange for California’s agreeing to switch its own NOx regulations to align with the federal government, the engine manufacturers accepted the standards of the ACT.
According to the press release put out by Nebraska Attorney General Mike Hilgers when the lawsuit was filed, “the agreement commits the signatory manufacturers not to oppose additional state-level electric-truck mandates and to restrict output of diesel powered semi trucks in lockstep, even if a court rules that the regulations are unlawful.”
Glen Kedzie, a principal with E&E Strategies, said the CTP is in sharp focus now given industry speculation about whether California’s regulations could withstand legal challenges from the incoming Trump administration.
“Is the CTP a binding contract?” Kedzie said in an interview with FreightWaves. “Some say it isn’t worth the paper that it was written on, while others say it’s a binding contract. And I think that will end up in the courts at some point in time.”
Clean Freight Coalition: Despite the name of this group, it is not a defender of the California regulations. It consists of several trucking-related trade groups, including the American Trucking Associations but also the National Private Truck Council and the National Tank Truck Carriers.
The group’s letter was targeted at engine manufacturers as well. The Clean Freight Coalition (CFC) also cites in the late December letter the uncertain course of ZEV regulation as having led to “internal combustion engine and truck scarcity.”
“Federal and state zero emission vehicle (ZEV) mandates have already begun to impact coalition members’ ability to purchase safer, cleaner equipment to support the movement of freight by truck and passengers by bus,” the letter says.
The group’s request of the engine manufacturers: Abandon the CTP agreement.
“California’s one-size-fits-all regulations fail to account for the unique operational requirements of the commercial vehicle industry,” the CFC says. “To set achievable national emissions standards, truck manufacturers should abandon the CTP and are encouraged to work with industry partners to block harmful regulations that do not set us on a path to success.”
Is California’s truck supply tightening?
Rusty Rush, the CEO of Rush Enterprises (NASDAQ: RUSHA), the publicly traded truck dealer, briefly addressed questions about California and reports of tight supply on the company’s third-quarter earnings call last year. His succinct answer to a question did suggest an impact. (An email from FreightWaves to Rush’s media representative had not been responded to by publication time.)
“California is tough,” he said. “We’re performing out there. But given the new car laws, my order intake out there is still 50% of what it was but that stuff will smooth out. That’s the good part. It’s just one state for me, right?”
How it works is debated
In the background to this lobbying are the actual changes in the ACT that went into effect at the start of 2025. At first glance they do not appear to be significant. But they are more stringent than in 2024.
The ACT operates with mandates but with pathways to reach those mandates that don’t necessarily require buying a ZEV.
A schedule of requirements lays out the percentage of vehicle sales that must be ZEVs by year. The requirement in 2024 was 5%. In 2025, it’s up to 7%. By 2035 and beyond it’s 40%.
But that requirement can be reached through the purchase of credits as opposed to a hard count of 7% of sales.
Manufacturers that sell vehicles into California generate a base of deficits that is calculated using that annual sales requirement percentage. (It rises to 10% next year.)
Credits to offset that pool of deficits can be obtained by selling ZEVs or by purchasing credits from other sellers that have sold either ZEVs or near ZEVs – like a plug-in hybrid – into the state.
Adding to the information blitz on the ACT in the last quarter of the year, the California Air Resources Board issued a question-and-answer document to try to combat what it called “myths.”
Among those were that ACT “is so restrictive there will be no diesel-powered vehicles available,” which may be showing up as the concerns about a tight supply of vehicles.
The CARB response was that the gradually increasing percentage “was designed to ensure a smooth adoption of ZEVs while still ensuring that diesel powered vehicles are available for purchase.”
It also said the 2024 ACT regulation target was met two years early. “In 2023, manufacturers sold zero-emission options as 16% of their total sales when no truck purchase or manufacturers sales requirements were in effect.” The In addition, the CARB document said there is currently an “abundance” of credits to be purchased on the open market. (CARB releases an annual report on the status of the ACT credit market.)
CARB also releases an annual report on the number of ZEVs sold in the state. The total for 2024 has not been calculated yet, according to a CARB spokeswoman. The 2023 figure showed 18,473 ZEVs sold in California, up from 7,639 a year earlier. (In June, CARB said one in six sales of new vehicles in the state was a ZEV.)
One publicly available data point about sales of ZEVs in California that is updated more frequently is the monthly report from the port of Long Beach. It has shown steady but not spectacular growth in ZEV registrations with the port, even though the ACF rule that halts new non-ZEV drayage registrations after Jan. 1, 2024, is not being enforced while the state awaits a decision on its request for a waiver from EPA to implement ACF.
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