To meet the pace of change required to meet 2030 and beyond climate and urban air quality goals, faster adoption of low carbon, zero emission technologies is critical. Supportive policies and actions that recognize the value of ZECVs and enable industry to lower costs of components and infrastructure would help shift the market balance from petroleum-powered trucks and buses to greater global ZECV adoption. These policies and actions may help shift markets toward ZECV adoption by themselves, but are most powerful when combined. The effects of the aggregated policies are expected to increase ZECV adoption significantly beyond the uptake that a single policy or action would drive. Combining promotional policies or actions in discrete regions or cities targeted at the first success applications would help enable the ZECV industry to reduce costs and improve performance in markets that would develop into geographic “beachheads,” which serve as hubs of adoption and innovation for the regional ZECV market.
Toolkit Contents: Policies, Regulations, and Actions
The types of policies and actions that cities, states, regions, and industry can take to promote ZECV uptake can vary greatly. Some of these options are similar and might not be able to be combined, such as a vehicle tax incentive versus a direct purchase voucher. The more differentiated policies and actions can be combined and potentially be made more effective (see “Combined Incentives” section below). After documenting the policies and actions that have been implemented already to promote ZECV uptake, these promotions fall generally into three distinct categories. Some policies, such as Congestion Pricing, may have elements that fit into each category.
- Policies, Regulations and Actions: This category includes broad requirements or programs that specifically promote or require ZECVs without a financial component. Examples in this category include exclusion zones at ports and city centers, procurement requirements for public and private fleets, and enabling industry to grow into new markets through vehicle standards, fuel standards, or utility investment in charging infrastructure.
- Financial Incentives: One of the most direct methods of changing consumer behavior is to create a financial incentive. This category includes vehicle purchase incentives, differentiated fee structures for accessing roadways or regions, improved prices for fuels and infrastructure, and large-scale investments in battery production or purchases.
- Non-Financial Incentives: Making ZECVs easier to operate and providing an advantage over petroleum-powered vehicles creates an incentive for fleet owners to switch to cleaner vehicles. This category includes green loading zones, reserved access to roadways or regions, improved charging or fueling access, and investments in these sections.
A broad suite of incentives may increase the size and scope of the early market, leading directly to additional air quality and petroleum reduction benefits. Single promotional policies and actions are an important step forward to creating a conducive ZECV market, but introducing multiple incentives may lead to a more strongly supportive and successful environment for ZECV deployment and adoption. While experience is more limited around ZECV adoption, analyses from the light-duty sector confirm that a portfolio of supportive strategies, including greater incentives, can lead to faster and larger adoption. Given the multiple barriers identified to adoption, strategies to enact multiple policies and actions that reduce these barriers to ZECV adoption will lead to more aggressive ZECV uptake in those markets.
The International Council on Clean Transportation conducted an in-depth, multi-variate analysis on light-duty electric vehicle (EV) policies and actions to promote the uptake of EVs in major U.S. cities. The analysis found a strong correlation between the number of incentives offered to promote consumer EV uptake, with a strong emphasis on the value of charging infrastructure and model availability. The analysis also characterized markets with few incentives as making it “clear that no one or two actions are sufficient to grow the electric vehicle market,” and the reports primary conclusion found that “Electric vehicle market growth requires many actions by many different players. Actions by various stakeholders are linked with electric vehicle uptake.”
In the context of the ZECV market, these analyses suggest a broad portfolio of incentives and supportive policies will help boost sales volumes and drive down costs through economies of scale, creating a virtuous cycle that will increase vehicle deployment, further driving down costs. The effect of incentive programs as a market catalyst will grow as the reach of these incentives expands beyond initial beachhead markets.
The Beachhead Strategy
The strategy of investing in targeted, first success “beachhead” applications and geographic first mover markets is a key tenet of the Global Commercial Vehicle Drive to Zero program. These regions can foster advanced, clean technologies in a developing marketplace and will provide transformative examples for the next wave of cities, states, or regions looking to advance their clean vehicle economies. Beachhead markets can establish market conditions that will make rapid large-scale clean commercial vehicle adoption more affordable and more manageable for fleets.
The beachhead model helps reduce costs and improve the fleet experience by expanding supply chains, creating a better business case for fueling infrastructure investments, and developing supportive policies and actions to reduce the barriers to ZECV adoption. By fostering technological and business model innovation, vehicle manufacturers will be able to expand from the most easily accessed markets to meet demand for new duty cycles and markets, eventually connecting individual markets to create a seamless ZECV network (see Figure 1 for an example of developing pathways). The beachhead model of vehicle innovation foresees zero-emission transit buses and forklifts as the earliest technology pathway, giving way to on-road vehicles with increasingly long ranges and more demanding duty cycles and to increasingly diverse off-road applications.
The chart above shows the transition from first success applications, or “beachheads”, expanding to larger volume applications that can make use of the core powertrain components and supply chain. These application beachheads can be effectively spurred in key geographic, first mover regions. These geographic “beachheads” may consist of any subnational, national, or connected clean vehicle markets and may range from a large city or a state to a connected series of cities and states. A beachhead market is composed of and benefits from the participation of government agencies, industry innovators (including clean vehicle, fuel, and infrastructure companies), and non-profits. The initial beachhead markets identified as conducive to ZECV adoption were chosen due to a number of factors which may apply to any one of the markets identified in the map below: high population creating high demand; existing or announced policies or actions to meet climate change and air quality goals; existing or announced policies or actions that promote ZECV uptake; established clean or commercial vehicle markets.
The impacts of establishing a beachhead market for ZECVs are diverse and may extend beyond reducing tailpipe and GHG emissions. Growth in a beachhead may else encourage additional support from industry partners because these markets are seen as critical bellwethers and conduits for growing national and international clean commercial vehicle adoption. Beneficial outcomes of establishing a beachhead market and committing to a ZECV economy may include:
- Manufacturers expand operations to new market to meet local demand;
- Regional supply chains improve, making component parts and replacements more affordable;
- Infrastructure is built to service and fuel new vehicle technologies;
- Fleets have greater number of technology and vehicle model options and can more easily adopt clean vehicles;
- Growth in a regional clean vehicle economy generates greater investment in new technology and manufacturing capacity; and
- Adoption of clean vehicles reduce greenhouse gas and criteria air pollutant emissions.
Any jurisdiction that is considering creating policies and actions to promote ZECVs should consider which elements of a beachhead market create the greatest potential for success. The questions below should help regional planners as they plan for ZECV adoption:
- Local and Regional Population and Trends: Is a market large enough, and well-connected to other markets, to sustain a burgeoning clean commercial vehicle market and reduce costs? How is a population and its demographic needs changing?
- Vehicle and Occupation Characteristics: What are the major commercial vehicle segments within the region? How do the vehicles and occupations fit in with zero emission vehicle development and production?
- Air Quality and GHG Reduction Goals: Is a city or region’s efforts to promote uptake of clean vehicles supported by explicit goals to improve air quality or reduce GHG emissions?