California’s SB 1213 is an example of regulatory ingenuity in action
California just took an important step toward making electric trucks more affordable and easier for businesses to buy.
On September 20, Governor Gavin Newsom signed SB 1213, a new law that will require more transparency around the prices of electric trucks that receive state incentives. Sounds trivial, but is actually a remarkable example of regulatory ingenuity in action.
More than 70% of freight by weight in the United States is transported via aging diesel fleets: a reality that’s bad for our health, bad for our climate, and – with wars in Ukraine and Iran pushing diesel prices through the roof – increasingly bad for our wallets. Yet even though drivers who’ve tried them often prefer electric trucks to diesel, the high upfront costs of electric trucks makes it nearly impossible to break the diesel habit. The median cost of a battery-electric Class 8 tractor in the United States is $411,200 – 2.4x times the cost of a comparable diesel tractor.
The thing is that these high truck prices are artificially high. An independent ICCT analysis found that as battery-pack costs fell from 2020 to 2025, prices of electric Class 8 tractors in the European Union fell by 32%… while prices for comparable big rigs in the United States rose by 27% (about $87,000).
Another investigation found that legacy manufacturers are pricing electric trucks well above what’s justified based on underlying production costs. They’re able to do this because the U.S. market for heavy-duty trucks is hyperconcentrated, allowing oligopolistic behavior that inflates electric truck prices and slow-walks the transition away from diesel.
SB 1213 breaks the stranglehold by forcing manufacturers to provide better information about what electric trucks actually cost to produce. Price transparency ensures that fleet operators and individual drivers can depend on lower, more predictable prices, and helps public incentives for zero-emission technology go further.
This type of market-shaping strategy is a valuable complement to supply-side regulations (e.g., emissions limits or electrification targets). It’s also remarkably popular – SB 1213 passed the California state legislature unanimously, and was endorsed by environmental, business, and economic groups alike.
At FAS, our Center for Regulatory Ingenuity is pushing forward creative solutions like SB 1213. Our research on how states can use economic and financial tools to de-risk the clean energy transition helped inspire this legislation, and we’re working with multiple other states across the nation on how they might adapt and adopt California’s approach.
As we’ve written, much must happen to alleviate the economic and health costs of freight for Americans, including cutting pollution exposure in overburdened communities and ensuring a just transition for workers caught between the fossil and electric eras. But market fixes are genuinely necessary. Without them, it will be very hard to restart progress on truck modernization and electrification, much less to push for even greater ambition. By rooting clean-truck policy in affordability and competitiveness, these fixes also align policy with politics; by addressing factors that inflate truck prices and stifle innovation, they can win truckers, fleets, new companies, and consumers – a coalition that, added to the existing environmental movement, can win.
California just took an important step toward making electric trucks more affordable and easier for businesses to buy.
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