Q&A: Rush’s Lacy Robertson on Emissions Regulations – Fuel Smarts

What we’ve found over the last couple of years is that every regulated party tends to look at which regulation impacts them directly. So, the engine manufacturers look at the engine regulations, and the vehicle/chassis OEMs look at the chassis and typically also the engine regulations. Then the fleets are all looking at the fleet-specific regulations.

But all of the regulations — whether it be low-NOx Omnibus, Advanced Clean Trucks, or Advanced Clean Fleets — they are all independent, but they are all interrelated, and they impact what our customers can buy and what we can sell them.

So you have to think of it holistically, so you understand the full impact.

Lockridge: Explain more about how emissions regulations affect dealers like yours when you are selling trucks to fleets.

Robertson: There have been a lot of cases in the last year where a fleet is looking at Advanced Clean Fleets and their electrification requirements under that regulation. If all their vehicles are in, say, Group 3, which is sleeper trucks or specialty vehicles, they wouldn’t have any fleet-specific electrification requirements until 2030.

But when you look at Advanced Clean Trucks, if they want to continue buying combustion vehicles between now and then, the OEM has zero-emission vehicle sales requirements, which they are pushing through to the dealer.

Lockridge: So the Advanced Clean Trucks rule, which affects truck manufacturers, ends up affecting fleets, even if they’re not required by the Advanced Clean Fleets rule yet to buy an electric truck?

Robertson: We need the customers that are purchasing the combustion trucks to also purchase the electric trucks to fill those [ACT] requirements.

Lockridge: So that’s kind of a balancing act on the part of the dealer to help your customers understand that.

Robertson: Absolutely. And a lot of this stuff is changing so rapidly, that we have to keep track of it and make sure we understand what our customers’ needs are — in the immediate this year, but also really looking at the next three years.

Unfortunately, the only thing that’s certain right now is that everything is very uncertain, and there’s not a very clear path forward. So agility and being able to adapt to these changes and stay abreast of them are absolutely critical.

Lockridge: What are some of the things that you suggest to customers to deal with all this uncertainty?

Robertson: We work really closely with our customers as a partner to understand what their current needs are and what they’re looking at for the next five years, to figure out, how do we make sure that we meet all of your needs, your replacement needs, and also your growth needs.

Where are these vehicles going to be operating? That’s one of the big changes to the way that a lot of trucking companies operate, and frankly, the way dealers operate.

Historically, a lot of trucking companies would buy 1,000 trucks from us that meet their specs and then decide where they would be deployed across the United States. Unfortunately, with the regulations as they stand today, we can’t do that anymore. So we actually have to know where [the trucks] are going so that we can track credits and deficits.

And that’s a huge change in the way we all do business, from a dealership level to our customers.

Lockridge: Do you have any thoughts on how the new administration might affect the whole situation? The Trump administration appears to be trying to cut regulations. I would guess that the EPA is probably going to be part of that.

I think that that’s a very fair assumption based on Trump’s first presidency and the plans that he’s laid out so far. However, what that actually looks like and what it actually materializes into, we’ll have to wait and see.

I’m optimistic that the trucking community has an opportunity to have more realistic, achievable goals in sight that that are that work for everyone. However, a lot of these things can’t go away overnight.

Also, the OEMs have invested billions of dollars, and there are other complicating factors, like the Clean Truck Partnership between [the Truck and Engine Manufacturers Association], the OEMs, and CARB to comply.

So, it’s going to take some time to see how everything plays out. I think we’re going to have to wait and see.

Lockridge: And regulations take time to change, so fleets shouldn’t think, “All right, we got a new president, I don’t have to worry about this anymore.”

Robertson: Yes, and I think that’s important. My initial recommendation to our customers is always that we can hope for the best, but let’s have a contingency plan for both potential outcomes. Because if you fail to plan, you plan to fail.

So let’s have a best-case scenario and a plan that addresses that, and then also a plan that addresses the worst-case scenario, so there’s no situation where the customer is left flat-footed and not able to run their business.

Lockridge: Do you see more interest in options such as leasing trucks as opposed to buying them, to help deal with some of this uncertainty?

Robertson: I think leasing is a great option. And you know, depending on the fleets, what their needs and their replacement cycle, there’s so many different factors that come into play.

Do they own the property where they’re going to domicile the trucks? If they lease it, can they get approval to put infrastructure there? Or would they prefer to work through a charging as a service provider, who can kind of do the whole package, or even a truck as a service provider? There’s so many different options.

I think every fleet is going to have to figure out what works best for them based on their location, their utility rates, their space on their property.

What about the state of incentives and grants and tax credits? At the Fleet Forward Conference recently, a panel was discussing how, as regulations kick in, some of the incentives are going away.

Robertson: Absolutely. So kind of a good rule of thumb when you’re thinking about incentives is they typically do not pay for a fleet to do something that they’re required, from a regulatory standpoint, to do. So you think about it as early and extra, or extra.