In 2024, fleets are navigating a rapidly changing regulatory environment that continues to impact product availability, vehicle choices, and operational strategies. With regulations like California’s Advanced Clean Fleets (ACF) rule and federal greenhouse gas (GHG) mandates driving change, fleet managers are balancing compliance with operational efficiency.

This article is part of our seven-part series exploring 2024 commercial vehicle market trends, from new inventory recovery to evolving buyer behaviors.

CARB Regulations and Diesel-Powered Challenges

The California Air Resources Board (CARB) remains a driving force in emissions standards, particularly in California and CARB-aligned states. For fleets dependent on diesel-powered vehicles, the transition has been challenging. 

“Regulatory challenges — mainly CARB's ACF and low NOx regulations — have had an impact on the availability of diesel-powered products and forced fleets operating in California to look at EVs as a solution,” said Shaun Skinner, President of Isuzu Commercial Truck of America.

Skinner added that the supply side has finally shown signs of recovery. “After several years of demand exceeding supply, 2024 saw OEMs (and some body companies) able to finally catch up and start to meet the demands of fleets,” he added.

However, understanding the varying emissions regulations across states remains a hurdle. “Emissions for different states and having everyone understand what is in front of us is a major issue,” said Brian Tabel, VP of Marketing at Isuzu Commercial Truck of America. 

With CARB regulations expanding their reach, fleet operators must stay informed and prepared to adjust their vehicle choices and long-term strategies significantly.

EPA Mandates and the Shift Toward Zero Emissions

At the federal level, the Environmental Protection Agency’s (EPA) upcoming greenhouse gas mandates are already influencing fleet decision-making. 

“Wide-scale industry changes related to the latest EPA mandates are influencing the production and sales numbers of used commercial vehicles,” explained Mac Molli, Account Supervisor at Commercial Truck Trader.

Starting with model year 2027, new trucks will feature technology designed to reduce greenhouse gas emissions. While these regulations are essential for sustainability, they have also introduced uncertainty.

“Consumers are concerned about the reliability of these future models, so the government has issued further vehicle warranties to safeguard purchases,” Molli said. “This provides extra value at a lower cost and has sparked a flood of pre-buys. Consequently, more pre-owned models are available on the current market with a superior selection in terms of price and quality.”

This pre-buy trend presents a strategic opportunity for fleets to secure reliable assets before regulatory changes drive up costs or introduce untested technology.

Electrification Gains Momentum in Medium-Duty Fleets

While regulations are pushing fleets to explore alternative fuel vehicles, medium-duty trucks have emerged as an ideal proving ground for electrification.

“As the industry works to find the right mix and timeline for ICE and alternative fuel vehicles, 2024 confirmed that the medium-duty segment is in the current sweet spot for electrification,” said Ryan Gaul, President Commercial Vehicles at Workhorse.

Gaul pointed out that these vehicles (typically running predictable routes with manageable payloads) are well-suited for EV technology. “These vehicles are proving EV technology is ready to deliver real-world value for fleets,” he said.

The benefits of electrification extend beyond emissions reductions. 

“Fleets leaned into electrification not just for sustainability but for resilience,” Gaul added. “Medium-duty EVs offer a stable alternative to volatile fuel prices and shifting regulatory environments. With lower maintenance costs and predictable energy use, they’ve become a dependable asset, regardless of external disruptions.”

A Balancing Act for Fleets

The road to emissions compliance remains complex, with evolving regulations and timelines creating challenges and opportunities. Fleets must balance the immediate need for reliable vehicles with the long-term push toward sustainability.

“From pre-buys ahead of new EPA mandates to exploring the growing benefits of electrification, fleets are taking proactive steps to navigate an uncertain regulatory landscape,” said Molli. Staying ahead of the curve, whether by embracing EVs, managing diesel phaseouts, or optimizing vehicle procurement, will be critical for fleet managers aiming to remain compliant and competitive.

Check Out the Full 2024 Trends Series

Don’t miss the rest of the series:

• Overall Market and Used Vehicle Outlook – A recovery in new inventory, challenges in used markets, aging fleets, and shifting buyer demands.

• Navigating Disruptions: Supply Chain Resilience – How fleets are overcoming parts shortages and global challenges.

• Electrification and EV Adoption – Why medium-duty fleets are leading the EV charge.

• Technology and AI Innovation – Transforming safety, efficiency, and decision-making.

• Labor and Workforce Shortages – How fleets are fighting back with training and retention strategies.

• Cost Management and Resiliency – Strategies to control TCO and build economic stability.