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California Regs Throw Kinks Into Traditional Equipment Cycles

Chris Shimoda, manager of environmental policy for the California Trucking Association moderated a panel with Mark Sturdevant , fleet sales & emissions specialist for the Velocity Vehicle Group and Robert Tennies, truck sales consultant for Western Parts & Equipment, at the 2013 Fleet Executive Conference in Las Vegas. They discussed how the 2007 California Regulations have disrupted traditional equipment cycles.

It was the consensus that the 2007 emissions requirements have been huge and even egregious. So much so that it has been driving many owner-operators out of business in California. It’s not uncommon for owner-operators to not qualify for a truck loan these days.

In past years, 45 to 55 percent of business owners could qualify, but with higher prices on used trucks, only about 10 percent can qualify today for a loan.

They estimate that because of increased regulations (mainly related to emissions), truck prices have increased almost $30,000 for a new truck since 2007. In addition to higher new truck prices, older trucks are not valued very highly because of emissions requirements. This has hurt owner-operators as well. For example, a 2006 truck with 600,000 miles sold for just $7,500.

By 2023, all trucks operating in California must be no older than a 2010 model year engine; no retrofitted engines will be allowed. Because of these stringent rules, it’s believed that the solo owner will eventually be driven out of business.

 

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