Information is beginning to trickle out about sales requirements for commercial truck dealers in California that will soon extend to other states committed to implementing the California Air Resources Board’s (CARB) Advanced Clean Trucks (ACT) and low-NOx Omnibus regulations.
The complexity is staggering.
The restrictions and oversight CARB’s regulations put on truck dealers are unprecedented. The agency hasn’t outlawed internal combustion engines (ICE) yet — that’s coming in 2036 — but beginning in January, five more states (Massachusetts, New Jersey, New York, Oregon and Washington) will be subject to the zero-emission vehicle (ZEV) sales and delivery requirements California dealers faced under the ACT rule all year, while also experiencing the limitations on ICE sales that come with the regulations.
The act of selling trucks in these five states is about to fundamentally change, and California dealers are doing their part to warn their out-of-state contemporaries.
“Start prepping your customers now. Because when it comes it’ll be a shock,” warns Eric Bassett, owner of Sacramento-headquartered Riverview International Trucks. “Everything changes.”
Why is this happening?
On Jan. 1, CARB officially implemented its Advanced Clean Trucks and low-NOx Omnibus rules onto its trucking industry. (A sister regulation, the much-contested Advanced Clean Fleets (ACF) rule, remains on hold pending an EPA approval waiver.)
The ACT rule was created to drive ZEV adoption in the state and requires commercial truck OEMs to produce and deliver for sale an increasing percentage of ZEVs each year over the next dozen years until hitting 100% in 2036. The Omnibus rule targets emissions and requires engine manufacturers to lower NOx levels to 0.05 g/hp-hr and particulate matter to 0.005 g/hp-hr for 2024 model year (MY) engines or use previously acquired emissions credits for engines that approach but do not meet the standard.
The ACT rule’s final destination (along with ACF) has garnered the most headlines but it has been the Omnibus rule that’s proven the most arduous for California dealers to date.
When the Omnibus regulation went into effect in January, Class 8 engine OEMs had yet to announce the availability of a single engine meeting the requirements (though some engines had been certified compliant by CARB in testing). CARB announced at the time that truck makers could use MY 2023 engines in their production lines through March to allow dealers to take orders in California, and many of the trucks assembled with those engines are starting to trickle into the state.
Then in June, Paccar announced the future production line availability of CARB-compliant MY 2024 13-liter engine, and Volvo followed with an announcement of its own 13-liter diesel product. Engine and truck manufacturers also leveraged their credits to move units into the state.
But even with some positive news coming out about engine availability, sales and production remain depressed.
What has happened to truck sales?
Bassett says his business, which mostly sells to small- to medium-sized carriers, agriculture customers, and government and municipality fleets, has effectively been removed from the sleeper and daycab sales business this year. Bassett says International relies on Cummins’ X15 engine to support the market and he was allocated so few units that he sold out “in about 30 days.”
[RELATED: California says its ZEV sales are 'ahead of schedule' but is that really true?]
Bassett knows he can sell more units. He has longstanding customers regularly approach him to place orders and must tell them he has no build spots left to use. And after three years on allocation due to supply chain and production delays, he says their responses vary from confusion and bewilderment to frustration and anger.
“They come in and we tell them and they think we’re lying to them,” he says. “And we’ve been telling them for a while. Now they’re getting the same story from everybody and they don’t like the message.”
The consistent message is beginning to hamper demand too.
“My assessment is the general [truck sales] climate is frosted over. And I’ve talked to a lot of other dealers and they say the same,” says another California dealer who spoke to TPS on background. “Between the regulations and the upcoming election there’s a tight rope around sales in California right now.”
Affinity Truck Center’ President Kim Mesfin is seeing the same thing in her business with customers unaware of the regulations applied to them.
“I am buying last year’s trucks from other dealers and selling them,” she says. “I have not sold one 2025 MY legacy truck into California because we have been unable to sell an electric vehicle, or into one of the 49 other states. The 44 I received are sitting in the yard.”
California dealers say they remain hopeful demand will rise post-election and rising freight is a positive, but the ongoing restrictions on ICE availability make it hard to know when a true upturn could arrive.
Additionally, with so many customers still unaware of the sales restrictions — “we hit them right in the face with a line drive each time; they have no idea,” the dealer on background says — it’s hard to predict how buyers will alter their purchasing decisions moving forward.
[RELATED: CARB policies don’t reflect reality, says Port of Oakland operator]
Bassett says he’s pushed International and Cummins to get access to more engines without success. “Cummins is saying they are meeting demand, but how can we create demand if we can’t take orders?” he says.
Away from the sleeper market, the story is less catastrophic but equally confusing for dealers.
Bassett says because CARB’s rules designate units into categories for Class 7-8 tractors (with a fifth wheel) and Class 4-8 trucks (without one), he’s been able to place more orders for Class 8 chassis, straight trucks and medium-duty units. But those sales also have stipulations. Because of ACT’s ZEV sales requirement, Bassett says this year he is required to sell and deliver one ZEV unit to earn ten ICE order slots.
Sales ratios for all
Bassett’s experience is not unique. Each OEM has designated ZEV sales to ICE order ratios for their California dealers and will roll out similar programs in CARB opt-in states in the years ahead. Ratios are varied too, and will change annually, meaning what is required of Bassett as an International dealer will be different than what is required for dealers representing other OEMs.
Some ratios are better than others.
Bassett says, on the ZEV adoption track, he’s been fortunate. Located in the state capital less than two miles from CARB’s headquarters, he has government and municipal customers mandated to adopt ZEVs and other customers in the region open to trying them. But getting customers to commit to the technology is no picnic, particularly due to charging infrastructure concerns, and some OEMs require a ZEV be delivered and registered before corresponding ICE vehicles can be sold.
“I have local customers, we’ve had a plan for ZEVs since day one,” Bassett adds. “We’ve been working on their emissions strategy for years and we’re still dealing with headaches about charging.”
Other dealers haven’t been as fortunate. The dealer speaking on background says it has had customers order a ZEV specifically to have access to corresponding ICE units, which benefits that customer but doesn’t open up new ICE opportunities for the dealer. Mesfin says she had a ZEV order originally placed in 2021 that was canceled on delivery this spring. She says the customer will take the trucks at a future date, but until they do, her business can’t register the ZEV sales and earn the corresponding ICE credits.
Mesfin says that makes next year scary, too, as she anticipates she will be allocated even fewer ICE units in 2025 as she was given this year. “We are not building up any credits based on ZEV sales this year,” she says.
Another frustrating aspect of ZEV-to-ICE sales ratios is manufacturer input. To date, most California dealers say they received their allotment of ICE units for every ZEV they’ve delivered within the state. But credits earned for ZEV sales into California by dealers outside of the state are earned for the OEM, who then decides how to allocate them.
Meeting sales ratio requirements are proving to be a major obstacle for California dealers, who are required to sell zero-emission vehicles to earn the opportunity to sell ICE units.
“Our OEM has reserved those units for the ZEV customer to then buy ICE,” says the dealer on background.
What’s coming for opt-in states?
California dealers say their headaches will expand out to their contemporaries with CARB’s regulations in 2025. Massachusetts and Oregon are scheduled to adopt both the ACT and Omnibus rules; New Jersey, New York and Washington have only committed to ACT.
In a presentation circulated to its dealer network in June, Daimler Truck North America (DTNA) reported it anticipates ZEV-to-ICE sales ratios will be required in all five states — with higher ZEV sales requirements in the two states where both regulations are scheduled.
[RELATED: EPA holding public meeting regarding CARB's Advanced Clean Fleets]
The presentation also notes dealers and customers will be responsible for “ordering the proper truck/engine combination based on intended registration location,” meaning dealers in CARB opt-in states that misapply CARB’s rules once they go into effect could face the ire of regulators.
“[The] OEM will not be held liable if dealer or customer registers the vehicle in the wrong location,” DTNA stated.
Mesfin says now is the time for dealers to research and understand the rules.
“They should be talking with their regulators to get on the same page as to how it will actually operate on ground level,” she says, adding the New York State Department of Environmental Conservation has had multiple conversations with the industry in the past week to discuss ACT’s application in N.Y., address questions on calculations and enforcement.
“Without clarity on how ACT will be applied and measured, it is difficult to determine what to tell customers,” she says.
It’s unlikely CARB’s regulations will change much either.
DTNA’s presentation notes states opting in to CARB’s programs must adopt the rules identically. And dealers say their conversations with CARB don’t give them much hope the rules will change or be delayed.
“They are sympathetic to our message but changes aren’t being made,” Bassett says. “Or we’ll show them compelling reasons to delay, but whenever they say they’ll make a change in one area, they say we have to change another rule in another area to meet their end goals.”
Said a dealer source on background, “People think after the election, if Trump wins, the regulations will go away. But that’s not going to happen. We’re too far down the road for that.”
Mesfin adds, “We are still working hard to educate CARB in the impact and unavailability of trucks in crucial industry applications. CARB board members understand there is a problem. With the election ahead there is uncertainty of how to proceed. Regardless of timing, a significant modification to ACT may impact the EPA enforcement waiver CARB already received.”
