Following on the heels of the Advanced Clean Trucks (ACT) Regulation approved by the California Air Resources Board (CARB) to accelerate the first wave of zero-emission trucks, Senate Bill 372 was passed last year to provide financial incentives for affected businesses. These measures aim to improve air quality and help the state achieve its aggressive climate goals.
The ACT rule requires automakers to sell more electric trucks starting in 2024, and requires all new trucks sold in California to be zero-emissions by 2045. The state estimates this mandate could prevent 900 premature deaths, deliver $9 million in public health benefits and remove 17 million metric tons of climate-warming carbon dioxide from the atmosphere.
Manufacturers still have a lot to learn about electrification, and there is concern about having enough charging stations for long hauls. But the biggest issue for businesses is likely how they can afford to replace their current fleets with electric vehicles.
SB372’s Financial Incentives
The bill signed in October 2021 by California’s governor directs the CARB and state treasurer’s office to offer a variety of financial incentives to help owners of medium- and heavy-duty trucks and buses pay for the costs of replacing their diesel-fueled fleets with zero-emission alternatives. Those incentives include:
- A loan loss reserve
- Credit enhancements
- Performances warranties
- Sale guarantees
The law is innovative; it uses the public dollar to attract private capital in ways traditional rebates don’t. California has rebate programs in place to help businesses offset the cost of buying electric trucks and buses, but they have long waiting lists already, and with the mandate looming, more options are required.
Funding Options
The electric truck mandate applies to all businesses, from multibillion-dollar companies to small mom-and-pops. The intent of SB372 is to ensure transitioning all fleets is straightforward and equitable. It’s expected that as time goes on, there will be many types of financing options for purchasing zero-emission vehicles.
While no details are yet available about the requirements to apply for the new financial incentives, business owners with poor credit may need to seek alternative funding to purchase zero-emission vehicles. That’s where Clear Skies Capital comes in; we’ve worked with many business owners who had less than stellar credit, designing equipment financing plans for their specific situations.
As an alternative lender, we enter into every relationship with a mindset to say “yes,” unlike traditional lenders like banks. It costs you nothing — and you’re under no obligation — to learn about our minimum requirements, customer service, application process, funding speed and approval rates.
The Takeaway
While you still have time to make plans to adhere to the electric truck mandate, it’s best to start thinking now about how you will ensure your business is able to comply. The bigger your fleet, the more new vehicles you will need to purchase. Be sure to keep up with the latest news about available financial incentives and investigate all your equipment financing options.
Want to discuss equipment financing with experts who’ve helped countless owners over the years? Contact Clear Skies Capital at 1-800-230-9822 or learn more now.