The business case has been accelerating the commercial vehicle market’s EV transition, and that will continue if we stay out of the way
Editor’s note: This is the latest in our Emerging Voices series featuring work by new writers. -Barclay Palmer
What could be better than an electric car? If the goal is to protect public health and reduce greenhouse gas emissions, then the answer is simple: an electric truck or bus — or both. Despite a current slowdown, the percentage of electric car sales in the US is still growing, and approaching 10%. Now it’s time to accelerate the electrification of commercial vehicles.
Commercial vehicles are an enormous market — and source of pollution. In 2023, the US put approximately 520,000 medium- and heavy-duty vehicles on the road. Despite comprising only 6% of new vehicles, their high fuel consumption, extensive mileage, and diesel engine emissions contribute nearly a quarter of all transportation-related greenhouse gas emissions.
The exhaust from these vehicles also harms human health. Research by the American Lung Association links emissions of particulate matter, nitrogen oxides, and volatile organic compounds from commercial vehicles to increased risks of asthma, heart attacks and strokes, and premature death.
For that reason, electrifying commercial fleets will provide even more significant benefits than electrifying passenger cars, especially in urban communities. By transitioning to zero-emission trucks, the association estimates that by 2050, communities along trucking routes could experience $735 billion in public health benefits, including 66,800 fewer premature deaths, 1.75 million fewer asthma attacks, and 8.5 million fewer lost workdays.
This transition has been gaining momentum. In 2024, American companies deployed more than 15,000 medium- and heavy-duty electric vehicles (EVs). Top delivery companies have set ambitious targets for electrifying their fleets. These fleets are set to transform last-mile delivery, reducing emissions, and paving the way for a cleaner, more sustainable future. With a goal of deploying over 100,000 electric delivery vans by 2030, Amazon has already put more than 20,000 on the road. FedEx has ordered 2,800, UPS has committed to more than 12,000, and USPS has placed orders for over 75,000 electric delivery vans.
The US now has 24 medium- and heavy-duty EV manufacturing facilities, representing nearly $9 billion in investments and employing almost 34,000 people.
While large orders for electric vehicles signal strong commitments, however, deployment has been gradual as companies navigate production challenges, infrastructure needs, and cost considerations. Uncertainty at the federal level further complicates the transition, with reports that the Trump transition team is considering canceling key USPS electrification contracts as part of a broader effort to roll back support for EVs. These factors could slow adoption and create challenges for the companies.
The Inflation Reduction Act and its impact
How quickly that transformation comes will depend, in part, on the future of the Inflation Reduction Act (IRA). Signed into law in August 2022, the IRA offered incentives for both manufacturers and buyers to switch from diesel to electric fleets. That helped spark nearly $200 billion in EV manufacturing investments, supporting tens of thousands of jobs, mostly in Republican districts.
The Trump administration’s order that “all agencies shall immediately pause” all IRA disbursements, however, has thrown all those investments — and the pace of the inevitable transition to EVs — into uncertainty.
For commercial vehicle buyers, the IRA offered tax credits of up to $40,000 per vehicle, depending on the vehicle’s gross weight rating. Unlike the 30D tax credit for passenger vehicles, these credits aren’t tied to strict domestic sourcing requirements, making them easier for businesses to claim. However, potential policy revisions could introduce new restrictions or eliminate the credit altogether, affecting fleet electrification plans.
Building the clean commercial vehicles for tomorrow
Beyond tax credits, the IRA spurred significant private-sector investment in domestic EV manufacturing. The Biden administration allocated up to $20 billion in loans and a $10 billion investment tax credit to encourage US-based clean vehicle production.
The US now has 24 medium- and heavy-duty EV manufacturing facilities, representing nearly $9 billion in investments and employing almost 34,000 people, according to The Big Green Machine, a tracker developed by Wellesley College Professor Jay Turner and his student researchers. While the majority of this funding comes from private investment and state initiatives, approximately $300 million has been supported through the Inflation Reduction Act. Some key facilities include:
- Blue Bird Bus Factory, Fort Valley, Georgia: Blue Bird received a $79.7 million grant under IRA Section 50143, supporting its production of 5,000 electric school buses annually. The facility employs 2,000 workers, strengthening the US supply of clean school transportation.
- Mack Trucks Lehigh Valley Facilitation, Macungie, Pennsylvania: A Mack Trucks facility is transitioning to electric truck production with the help of a $208 million Domestic Manufacturing Conversion (DMC) grant, expected to create around 300 new jobs.
- Tesla Gigafactory 1, Sparks, Nevada: Tesla’s Gigafactory, is undergoing a $1.8 billion expansion to produce 50,000 Tesla Semi Class 8 trucks per year once fully operational.
- BYD Bus Factory, Lancaster, CA: BYD, one of the world’s largest EV manufacturers, has been building electric buses in California since 2014. The facility employs 750 people and produces 1,500 transit and coach buses annually.
- Ford Kansas City Assembly Plant, Kansas City, MO: Ford invested nearly $200 million to expand its Kansas City Assembly Plant for E-Transit production, its first all-electric van, which launched in 2022. The facility has an annual production target of 38,000 electric cargo vans.
The road to an electrified future may face obstacles, but the destination remains clear: a cleaner, healthier, and more sustainable transportation system.
While many of these projects are ramping up or preparing for production, their future is uncertain under the new Trump administration. If IRA-related funding and tax incentives are reduced or eliminated, these projects could face delays, scale-backs, or even cancellations — potentially slowing commercial EV adoption in the US, eliminating the EV transition’s gains in innovation, climate and public health.
The road ahead for commercial EVs
Mile for mile, electrifying commercial vehicles offers the biggest wins for both climate and public health. The progress made so far — fueled by private investment, policy support, and corporate commitments — suggests that the shift toward clean commercial transportation is accelerating around the world.
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In China, more new cars are electric than gas-driven. However, whether the US continues to lead or falls behind on the transition and its economic and health benefits will depend on whether Congress and states keep incentives in place.
Despite uncertainty, the momentum behind commercial EVs is undeniable. Industry innovation and rising demand for zero-emission transportation are driving progress, positioning the US as a key player in the global clean vehicle market. The road to an electrified future may face obstacles, but the destination remains clear: a cleaner, healthier, and more sustainable transportation system.
Featured image: FedEx electric vans. © FedEx
