As policymakers debate future economic stimulus packages as part of a COVID-19 recovery plan, suspending the federal excise tax (FET) through 2021 for new heavy-duty commercial truck purchases will deliver immediate results, restore and expand domestic manufacturing jobs, increase productivity of truckers and reduce emissions for communities everywhere.
“Over the past two months, the nation has witnessed firsthand the vital role of the nation’s trucking industry—the men, women and trucks on the road working to restock grocery store shelves and deliver essential medical supplies and personal protective equipment,” said Allen Schaeffer, executive director of the Diesel Technology Forum. “Elected officials now have an extraordinary opportunity to give this industry a badly needed boost by suspending the FET through 2021. The FET layers on an average of $22,000 to the cost of a single new class-8 big rig, driving the ‘out-the-door’ price tag out of reach for many fleets and truckers who typically operate on razor thin profit margins and who don’t always have easy access to credit or financing.”
The opportunity to modernize the truck fleet is significant, Schaeffer said. “Truck sales in the United States are now predicted to decline by 50 percent in 2020,” he added. “According to the latest DTF analysis of data from IHS Markit more than half of all class 8 trucks on the road today are over 10 years old, which will push the fleet age even higher. Diesel engines are the workhorse of the trucking industry and power over 95 percent of the largest tractor trailer trucks. Truckers with these older model vehicles are missing out on an entire generation of improvements in fuel efficiency and now near zero emissions technology, not to mention a vast number of safety enhancements as well.”
According to Schaeffer, suspending the FET to get more new trucks on the road is a reasonable and rational part of any recovery plan, especially any green recovery plan that hopes to deliver real economic and environmental benefits in the near term. “There are plenty of ideas circulating and policymakers need to balance aiding today’s recovery as well as seeding tomorrow’s future,” he said. “Technologies available today can start working today and deliver benefits today. They also have to be ones that truckers want to invest in and must be weighed against those approaches and technologies that are more aspirational and long-term and may not be commercially available.”
Unlike cars, commercial vehicles are capital investments with longer useful lives. “It is not uncommon for trucks to be in service over 20 years powered by engines that have seen over a million miles and are capable of being rebuilt many times over,” Schaeffer explained. “While trucks are prided for their durability and longevity, they may not be of the latest efficient and clean generation of technology. The most recent near-zero emissions tailpipe standards for commercial trucks were implemented a decade ago. The high purchase price of a truck is one important variable that contributes to the aging of the truck fleet. Thanks to the newest generation of clean diesel technology, a new truck replacement today can eliminate over 250 lbs. of fine particle emissions and almost 10 tons of greenhouse gas emissions. Compound these benefits over the share of trucks on the road that are not of the latest generation technology and the benefits are substantial. For example, half of the fleet that is of the latest generation clean technology has eliminated 1 million tons of fine particle emissions that is equivalent to taking all cars off U.S. roads for 33 years. Cleaner fuel and engines utilizing advanced technologies have combined to reduce nitrogen oxide emissions by 97 percent and particulate matter emissions by 98 percent. Since 2010, more fuel-efficient diesel trucks have saved 101 million barrels of crude oil and reduced CO2 emissions by 43 million tons.”
The time is right, according to Schaeffer, to encourage truckers to invest in technologies that are commercially available now, that can start working immediately, and deliver economic and environmental benefits today. “Boosting truck sales by temporarily suspending the federal excise tax on truck purchases is a great way to spark demand for U.S. truck production, boost employment and sustain truck dealers that support local communities while generating significant and lasting clean air and climate benefits,” he said.