Virginia businesses weigh benefits of electrification as leaders review policies

Passenger vehicles drive on Interstate 64 past the Goochland Safety Rest Area East. (Charlie Paullin/Virginia Mercury)

This is part two of a five-part series about Virginia’s transition to electric vehicles that examines the government’s role in the process, the private industry’s status, the development of charging infrastructure in the state, EVs’ impact on the electric grid, and how the commonwealth’s workforce may be influenced by the growing industry.

Amid the commonwealth’s transition to electric vehicles, dealerships and private companies have been grappling with meeting sales targets, and the costs to convert fleets and install infrastructure, as one major auto retailer with a plant in Southwest Virginia manufactures the parts necessary for electric heavy trucks to hit the road here and across America.

As of June 30, the Department of Motor Vehicles reports there were about 6.9 million vehicles registered in Virginia, about 1.7 million cars short of having one for every person.

It’s not clear how many of those cars are registered by private citizens or part of private companies’ fleets, but they contribute 37% of the state’s emissions from the transportation sector, almost double the next leading sources of Virginia’s 122 million metric tons of climate changing pollutants, according to a climate reduction plan from the Virginia Department of Environmental Quality. The plan lists vehicle electrification as its number one solution to the problem..

Reducing those carbon emissions by using more electric vehicles is better for the environment, would provide opportunities and spur new jobs, said Sen. Jennifer Boysko, D-Loudoun, chair of the Senate Transportation Committee.

“I believe that if we don’t take necessary steps to reduce carbon emissions, and we know that transportation is the largest contributor to that, that we’re really going to be in very serious trouble,” Boysko said. “We should be thinking forward instead of trying to find ways of getting out of taking action.”

Last month, Gov. Glenn Youngkin’s administration celebrated the expansion of RBW Sports & Classics to Virginia, placing another electric vehicle manufacturer in the commonwealth next to Volvo, which operates a factory in Dublin. But the governor also pledged to sever Virginia’s tie to California’s electric vehicle standards, and his administration said in a statement that electric vehicles may not be a one-size-fits-all solution.

“Electric vehicles are and will continue to be an attractive option for some drivers and businesses, but they simply won’t work for all Virginians,” said Christian Martinez, a spokesman for the governor. Youngkin’s move to “declare independence from the California Electric vehicle mandate restores Virginians’ freedom to decide which vehicles best fit the needs of their families and businesses and rids the commonwealth from a misguided mandate imposed by unelected bureaucrats.”

Clean Cars and legislative efforts

While the controversial “Clean Cars” transition rules broadly require that 100% of new vehicle sales be electric starting in 2035, the regulations are nuanced and allow for hybrid-type vehicles that run on gas, and sales in other states, to be credited toward meeting the targets.

Virginia had been following the Advanced Clean Car I standards out of California under authority granted in the federal Clean Air Act. Those standards required about 7% of new vehicle sales in 2024 to be electric, before California passed the updated Advanced Clean Car II standards, which imposed the 100% electric sales requirement. The ACC II standards start with 35% of new sales required to be electric or plug-in hybrid beginning in 2026.

The new mandate under the ACC II standards is what led Youngkin to say Virginia will revert back to following the less-stringent federal standards next year, with the backing of Republican Attorney General Jason Miyares, who said the 2021 law tying the state’s tailpipe regulation to California’s didn’t mean the state had to follow the updated standards.

Youngkin and Miyares have advocated for consumer choice, and so has Will Hupman, vice president of American Petroleum Institute that represents the oil and gas industry, in comments submitted to the U.S. The Environmental Protection Agency, which is still considering approving the exemption allowing California to set its own rules under the Clean Air Act.

“The 100% (zero emission vehicle)mandate for new vehicles plainly will have a significantly adverse effect on the nationwide market for liquid transportation fuels produced and marketed by API members and ignores other approaches that can result in similar emissions reductions, on a faster timeline, and at a lower cost,” Hupman wrote.

Environmental groups like the Southern Environmental Law Center, however, point to the standards’ flexibility that allow for compliance, like allowing credits from sales to be transferred among manufacturers. Credits from sales in other states, including manufacturers in California who “continue to over comply” with meeting requirements, according to the state’s online dashboard , can also count toward sales requirements in Virginia, should the state fall behind.

There’s also an option of allowing plug-in hybrid electric vehicles to account for 20% of a requirement. Plug-in hybrid electric vehicles, or PHEVs, run on gas but also can charge their battery with a plug, while a traditional hybrid uses its engine to charge its battery while the car is running.

EV sales have slowed from their earlier accelerated pace, leading to concerns about meeting future Clean Car requirements.  But the SELC contends adoption of the ACC II standards that include sales requirements will lead manufacturers to send more EVs to the state to continue development of the market. Because the rules offer flexibility in how its requirements are met, the group also said, that concern isn’t warranted.

“No manufacturer has ever failed to meet the requirements of the Clean Car Standards on the present side of things,” said Carroll Courtenay, a staff attorney with the SELC. “There’s a lot of play in the joints and a lot of flexibility in terms of how manufacturers kind of plan nationally to meet the standards across the various states where they’re in place.”

Democratic lawmaker Boysko acknowledged a concern she’s heard from some Virginians is that the commonwealth hasn’t done enough to spur the adoption of electric vehicles for consumers and create incentives for businesses to build the infrastructure for charging stations.

“One of the challenges that I hear from consumers, and I’m one of those, is that I want to be able to drive wherever I need to go in the commonwealth, and I’m not confident at this point to be able to do that because we have not done the work that my legislation set out to,(to) make a very clear effort that we are moving an electrified transportation system direction,” said Boysko.

Dealers juggle EV demand and regulations

Under the updated rules, dealers in Virginia have either embraced the sales targets or been met with sales and supply challenges.

Virginia is selling between 4-5 electric vehicles per month, according to Tim Pohanka, Chief Operating Officer for the Pohanka Automotive Group and Legislative Chairman for the Virginia Automobile Dealers Association.

He said electric cars made up around 8% of all car sales across the country in 2023, in part due to some states helping consumers pay for cars through subsidies.

According to the DMV, electric, traditional hybrids and plug-in hybrid vehicles made up about 1%, 3% and .001% of registered vehicles in the state as of June 30 this year, respectively. The about 311,199 total registrations of those vehicle types have contributed about $75.5 million toward the controversial highway use fee drivers must pay to make up for lost gas tax revenue.

But as hybrids, another form of low emission vehicles, continue to sell quickly, Pohanka said one of the chief challenges for dealers is some customers’ hesitancy to buy EVs because of factors like the cost, lack of charging infrastructure and anxiety with how far EVs can travel on a charge.

“I think it’s safe to say that the dealer body in this country is ready to go on anything that the consumer wants,” Pohanka said. “It really comes down to how that demand gets generated, and right now we just don’t see any of that demand.”

Behind the scenes, Pohanka said dealers across the country are building the infrastructure for the charging stations, investing in safety equipment for staff, educating consumers and training sales professionals and technicians.

Pohanka said there is a misconception that dealers are against electric vehicles. In reality, he said, dealers are allowing consumers to pick what suits them.

“When a consumer comes in and they’ve got questions about any type of drive train, be it (internal combustion engine), be it hybrid, be it electric, we’re showing all of those technologies to a consumer so they can make the right choice themselves,” he said. “There’s no pushing one way or pushing another. You really want the customer’s needs to be in charge of their purchase.”

Despite the country’s goals to convert gas powered vehicles to electric, or low emission, Pohanka predicts no state will be able to meet the California regulations.

“You’re not going to be able to go from 8% market share to 25% market share overnight. You’re going to need considerable help to get to those numbers.”

There is some optimism about future EV sales, though.

Stuart Gardner, executive director of Generation 180 , which provides consumer education on switching to electric, is confident vehicles will continue to sell. Generation 180 also found that women are underrepresented when it comes to EV ownership, representing  less than 30% of EV owners.

“We’re still seeing people shopping for electric vehicles, and people buying more and more electric vehicles every year in Virginia. So that’s still happening,” Gardner said. “Even though state media and national media is focusing on ‘oh, the sales are dropping,’ they’re still beating records, it’s just not growing as fast as it was and that’s the natural evolution of anything that sells. As it starts to move more mainstream that kind of adoption curve flattens out.”

Converting fleets

JK Moving Services, which is headquartered in Northern Virginia, has been preparing for the transition  enthusiastically, but still faces challenges like many other businesses.

Chuck Kuhn CEO and founder Chuck Kuhn said over the years the company has committed to sustainability. They use waste oil for furnaces and warehouse operations, provide sales members incentives to use electric vehicles and have converted all of its buildings to using motion sensors with LED lighting.

JK’s truck drivers also use small, environmentally friendly generators when on the road instead of running diesel trucks.

“I’m passionate about protecting the environment, and it’s truly embraced in all aspects of how we run the business,” said Kuhn.

The shortage of electric trucks is one of the businesses’ key challenges, Kuhn said, especially after he invested and placed orders for Tesla’s electric vehicles years ago, which he has yet to receive. While he is still committed to converting the company’s fleet to electric, Kuhn admitted he was discouraged after learning that PepsiCo received less than half of the vehicles promised by the manufacturer, according to an April report by Reuters .

He said he believed Tesla to be in the best position to bring electric heavy duty trucks to the market. He ordered six local tractors, but has been waiting four years after paying a deposit. The goal is to convert the entire tractor fleet by purchasing 12 units total.

“I would have thought by now a large portion of our local fleet would have been converted to electric,” Kuhn said. “I had no idea it was going to take this long to get them.”

Shelley Francis, co-founder and managing partner of EVNoire, a consulting company that focuses on autonomous mobility solutions, said some of the reasons businesses are converting their fleets to electric vehicles is because of the cost of maintaining a gas powered vehicle. Francis said electric vehicles have limited maintenance costs for tires, windshield wipers and fluids.

Similar to JK Moving Services, Francis said their clients are also converting their fleets to meet their sustainability goals such as reducing their carbon footprint.

Kuhn said some other challenges he anticipates once his EV trucks arrive is the need to outsource maintenance support for the trucks until he can train his mechanics, preparing for the lack of infrastructure across the country and limitations on how many miles a truck can travel.

“It’s easy to sit back and say, ‘no, that won’t work,’ ‘we can’t do it,’ and then you don’t change, and I’m a firm believer: if you don’t embrace change, you’re going to be left behind,” Kuhn said.

Heavy truck industry opposes regulations

While some businesses are working to convert its fleet of heavy trucks, others are in opposition to federal rules calling for the transition due to the mandates and costs.

The Virginia Trucking Association, which said there were 43,338 heavy and tractor trailer truck drivers in Virginia in 2022, said there’s been a 98% reduction of nitrous oxide emissions coming from the trucking industry’s tailpipes since 1985.

Heavy trucks in Virginia follow rules from the federal government, which finalized an update in March that, similar to the passenger car rules, calls for truck drivers to use cleaner gas engines, traditional and plug-in hybrids, and battery electric and hydrogen fuel cell type vehicles for model years 2027 through 2032. Several groups are challenging the rules, which could delay their implementation.

The EPA estimates the rules will remove one billion tons of climate-changing emissions from the 25% of emissions heavy trucks contribute to the transportation sector’s total emissions. The rules could also save the country $13 billion in avoided health costs, fuel and operation benefits.

Though environmental groups like the Natural Resources Defense Council said the rules didn’t actually go far enough , Dale Bennett, president and CEO of the Virginia Trucking Association, said the rules had “picked the technology” by pushing toward electric vehicle adoption, which the industry says will cost $1 trillion in purchases, and require building charging infrastructure and upgrading power supply.

That price tag will force drivers to either hold on to their trucks or hurry to purchase trucks now, which aren’t up to the EPA’s Clean Car standards, Bennett said. Higher costs will also trickle down to raise the costs of transported goods, and with the lack of heavy truck charging, which works differently than passenger vehicle charging, there’s what’s called “range anxiety” over how long a change will last and concern over an EV trucks’ towing ability, he added.

“W here’s that money going to come from?” said Bennett. “It will require more trucks to haul the same amount of freight we’re hauling. We’ve got to figure that out. We think there are other technologies and ways to get there.”

Volvo Group, which runs the 2.3 million-square-foot New River Valley Operations electric heavy trucks manufacturing plant in Dublin, a town within Virginia’s Pulaski County,  sees things differently. The company is “c ompletely aligned” with the EPA’s desire of “speeding the transition to zero-emission vehicles,” said Volvo Group North America Public Relations Director Janie Coley. They also have other emissions-reducing ideas for the commonwealth and other localities.

“Along with electrification, states can realize significant reductions through greater use of renewable, lower carbon fuels, like HVO (renewable diesel),” Coley said, adding the plant uses HVO to move finished vehicles off the plant’s production line.

In total, there are 560 Volvo VNR Electric trucks, which make up 44% of the Class 8 battery electric heavy trucks, the heaviest class, in the country, said Bobby Compton, product market manager at Volvo Trucks North America. Those vehicles have driven over 7.8 million miles since being launched in 2021.

Local carriers, including Camrett Logistics, Watsontown and Online Transportation, are using the model on daily routes in and out of the facility, transporting parts on two shifts while drivers charge them up on their lunch break, Compton said.

And the model has more towing power, too.

“The Volvo VNR Electric features 4,051 lb./ft of torque, which is substantially higher than the 1,850 lb./ft of torque on a traditional internal combustion engine VNR.”

Coley admitted that zero-emissions trucks including the VNR Electric have a higher production cost, resulting in a higher purchase price for customers.

“ This is why we’ve seen the greatest rate of adoption of the VNR Electric in states and Canadian provinces where there are incentive and grant programs to offset some of the cost of purchase for customers.”

The company takes a “consultative approach” with customers to evaluate their operations, see if they fixed or planned routes, work to find incentives and offer financing options, including for charging infrastructure, Compton added.

Editor’s note: This article has been updated to clarify the Virginia Trucking Association’s position on electrifying heavy truck fleets in Virginia.