
A new antitrust lawsuit accuses truck manufacturers of colluding to eliminate diesel trucks from the market in the fight against the Advanced Clean Trucks rule and other California Air Resources Board regulations.
On Tuesday, Nov. 19, the state of Nebraska filed a lawsuit against Daimler Truck, Navistar, Paccar, Volvo and the Truck and Engine Manufacturers Association. The complaint claims that a pact between the truck manufacturers to transition to electric trucks in states adopting CARB regulations artificially increases the price of diesel trucks in states that have chosen not to adopt stricter emission rules.
At the center of the lawsuit are controversial CARB regulations, most notably Advanced Clean Trucks, and an agreement with truck manufacturers to meet those requirements regardless of the success of any lawsuit challenging those rules.
Advanced Clean Trucks requires manufacturers to sell increasing percentages of zero-direct-emission trucks through model year 2035.
ZEV Sales Percentages | |||
Vehicle Model Year (MY) | Class 2b-3 | Class 4-8 | Class 7-8 Tractors |
2024 | 5% | 9% | 5% |
2025 | 7% | 11% | 7% |
2026 | 10% | 13% | 10% |
2027 | 15% | 20% | 15% |
2028 | 20% | 30% | 20% |
2029 | 25% | 40% | 25% |
2030 | 30% | 50% | 30% |
2031 | 35% | 55% | 35% |
2032 | 40% | 60% | 40% |
2033 | 45% | 65% | 40% |
2034 | 50% | 70% | 40% |
2035 and future years | 55% | 75% | 40% |
Ten other states have adopted the rule: Colorado, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington.
CARB’s zero-emission truck sales requirements quickly drew criticism among trucking industry stakeholders. Specifically, truck dealers, drivers and fleet owners pointed out there is no market for Class 7-8 electric tractors. Federal petitions challenging Advanced Clean Trucks have been filed by 19 states, the U.S. Chamber of Commerce and several trucking associations, including the Owner-Operator Independent Drivers Association.
To mitigate the controversy around CARB’s truck emission rules, the agency struck a deal with truck manufacturers called the Clean Truck Partnership. One of the provisions includes truck manufacturers committing to meet CARB’s zero-emission regulations even if a court deems them illegal. It is that agreement that sparked Nebraska’s lawsuit.
“After many lawsuits challenged California’s authority to assert powers of such economic and political significance, the truck manufacturing industry sought another means to placate the all-electric crowd while protecting its economic interests: Collusion,” the lawsuit states.
The lawsuit also points out that truck manufacturers have told dealerships Advanced Clean Trucks rules require them to limit sales of diesel trucks. Dealers have to sell electric trucks in order to receive diesel trucks. Vestal, N.Y.-based Burr Truck told Land Line that Volvo is requiring it to sell one electric truck before it can order 10-13 diesel trucks.
However, there is no market for Class 7-8 electric trucks. Therefore, Advanced Clean Trucks effectively and artificially reduces output of diesel trucks. Burr Truck said it has already canceled 200 diesel truck orders for next year. The company is unable to acquire needed diesel trucks since no one is buying electric trucks.
Consequently, Advanced Clean Trucks is artificially inflating the cost of diesel trucks.
Considering Class 7-8 electric trucks are not economically feasible, trucking companies will be forced to pay those inflated prices rather than move toward zero-emission trucks.
The lawsuit argues that reducing diesel truck output is not in the best interest of the truck manufacturers individually, given the current market. However, if all manufacturers are on board, then as the Clean Truck Partnership is established, limiting diesel truck supply becomes viable. Nebraska Attorney General Mike Hilgers noted that such horizontal agreements are illegal.
“The U.S. automotive industry is at odds with itself. On the one hand, it seeks to pacify the growing all-electric movement; on the other hand, it seeks to prioritize its own economic health,” the lawsuit states. “In a world where so-called ‘zero-emission vehicles’ (‘ZEV’) repeatedly cause automakers to sustain billions of dollars in losses and conventional internal combustion engine (‘ICE’) vehicles remain both profitable and in high demand, it seems nearly impossible to achieve both ends. The apparent solution to this problem is to eliminate consumer choice and pass on the costs to consumers.”
According to the lawsuit, the four truck manufacturer defendants account for 99.9% of all Class 8 truck sales in the United States. Daimler Truck and Paccar alone account for nearly three-quarters of all truck sales. By agreeing to limit diesel truck sales outside any government mandate, the “oligopoly” is essentially manipulating the market.
Although the agreement applies only to states that adopt CARB rules, the lawsuit claims that nothing is stopping truck manufacturers from implementing zero-emission truck sales requirements in any and all states. Even if they were to limit requirements to states that adopt Advanced Clean Trucks, the lawsuit argues this would have the same effect as a nationwide reduction of diesel trucks and, therefore, a nationwide price increase. Consequently, states that chose not to adopt CARB rules, like Nebraska, would be subsidizing manufacturers’ more expensive zero-emission business model.
“The (Clean Truck Partnership) ensures that each OEM electrifies its (medium/heavy-duty vehicle) fleet at the same pace and on the same timeline to guarantee that no member sustains any competitive disadvantage,” the lawsuit states. “This is done largely at the expense of states, such as Nebraska, which have no intention of following California’s regulations, and at the expense of consumers who have no desire to purchase electric vehicles but will have to pay higher prices for the ICE vehicles they want. The (Clean Truck Partnership) is, therefore, violative of the antitrust laws of the State of Nebraska and should be declared null and void.” LL
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