Attendees of any industry trade show, conference, or event have likely heard their fill of buzzwords such as “green fleet,” “sustainability,” and “emissions reductions.” It’s apparent that the industry is shifting toward cleaner operations, fueled by both government regulations and OEM goals. But how will that transition affect the independent contractors that help run the U.S. economy?
The “looming” sustainable regulatory standards are on owner-operators’ minds, said Wendy Greenland, CEO of Openforce, a management platform for independent contractors. The concerns primarily boil down to costs.
Financial impacts of sustainability regulations
Within the next decade, it’s possible that owner-operators who have spent years in the business could find the only option for their next truck is one that isn’t powered by diesel.
“Now, [owner-operators are] being required to look at an electric vehicle or make sustainability changes,” Greenland told FleetOwner. “That's a costly investment for them.”
The cost of a diesel-powered Class 8 truck is about $180,000, whereas a comparable battery-electric Class 8 truck costs more than $400,000, according to American Trucking Associations. While charging infrastructure is another major concern among potential EV adopters, infrastructure is a moot point unless the total cost of ownership for an EV makes sense for a small business.
See also: Coalition puts $1 trillion price tag on electrifying U.S. trucking industry
The cost of the EV alone is enough to cause concern for Carl Smith, an owner-operator contracted with Pillar Logistics who runs regional routes in the Midwest.
“There are some electric trucks out there and the cost right now is prohibitive to a single truck owner-operator like me,” Smith told FleetOwner.
Tax incentives and government programs have been instrumental for even large businesses with plentiful resources to acquire heavy-duty electric vehicles and build the necessary charging infrastructure. Not only are incentives imperative to get the EV ball rolling with some large trucking companies, but these companies also rely heavily on their partnerships with OEMs—a relationship that owner-operators might not have.
OEM partnerships are instrumental when testing the viability of these alt-fueled vehicles in a regular duty cycle, running real routes. These larger companies might also partake in OEM pilot programs—another perk that owner-operators don’t often have access to. These programs help fleet managers and owners decide whether an EV is a good business decision, whereas an owner-operator's pilot program is essentially a trial by fire. Many owner-operators can’t afford to take this gamble.
Alternative fuel infrastructure concerns
In the same breath that Smith conveyed his concerns about the high cost of an EV, he also expressed his concerns about the nation’s current alternative fuel refueling and charging infrastructure.
“Many owner-operators run irregular routes,” Smith said. “Until they get infrastructure where they can be charged or—there are even some out there that are running on compressed natural gas, and there's a network–but again, it's kind of limited.”
See also: What it takes to build charging infrastructure, according to a utility provider
Fortunately for Smith, his routes are predictable. While he shared his concerns about alternative fueling infrastructure for many owner-operators, he said if offered a grant to help pay for a new Class 8 EV, he would be open to purchasing one.
Smith purchased a four-year-old diesel-powered truck back in April. If an incentive or grant had been offered to him to “offset the costs of which you would have to pay as opposed to a diesel truck,” he said he would have likely driven away with a Class 8 electric truck.
Well, that is if the charging infrastructure were available on the sites he visits and if enough warranty were offered on the truck to make it worthwhile because “you're working the bugs out a lot of times on this new technology,” Smith told FleetOwner.
Political uncertainty surrounds the EV transition
Grants and incentives are welcomed by large fleets and owner-operators alike, yet without an expert to help make sense of them, fleets and small business owners could risk leaving grant money and incentives on the table.
“They’ve got to figure out a way to invest in the sustainable vehicle model that may be coming their way,” Greenland said.
Fortunately, companies like Greenland’s Openforce can help owner-operators navigate those subsidies for vehicles and charging infrastructure while also ensuring they comply with the Department of Labor and misclassification issues.
But even those incentives have a shelf life, and the upcoming presidential election leaves even more uncertainty for owner-operators to contend with. Regardless of the outcome, a new president will be in office, and his or her policies could change the landscape of the transportation industry’s current sustainability push.
Will fleets and owner-operators be offered the same incentives to purchase lower-emission vehicles as they have been during the Biden presidency?
See also: House funding bills make major trucking policy calls
One thing to count on is change
As of now, Smith doesn’t feel forced to transition his diesel-powered rig for one that runs on alternative fuel—if that were the case, he wouldn’t have purchased a diesel Class 8 just this past spring.
As the Environmental Protection Agency’s Clean Trucks Plan currently stands, OEMs aren’t even required to sell 40% zero-emission heavy-duty short-haul vehicles and 20% heavy-duty long-haul vehicles until 2032. While that’s more than seven years from now, the transition to cleaner transportation will eventually happen—changing the way owner-operators do business.
“Maybe initially [the transition] will be negative by some,” Smith said, “but I think it’s going to be curious for a lot of people, too. Change is one of the sure things in life ... I don’t have a problem with change.”
