The impact of COVID-19 on clean transportation has been swift and devastating for many industries, as with all aspects of American economic life. As we work to comprehend the current crisis, how do we chart a path to achieve our shared mission for a cleaner and more sustainable world?
Short-term Focus is Survival
For some companies, the biggest risk now is going out of business. This has already happened to one of Clean Fuels Ohio (CFO) commuter transportation partners. Recently, a long-time industry veteran told CFO he had to lay off 95% of his workforce and is in survival mode.
Many clean transportation sectors have been especially hard hit by COVID-19. Analysts disagree about the extent of the current economic contractions.
Many sectors have been especially hard hit by COVID-19. Ethanol and biodiesel producers are facing the double whammy of low oil prices and the ongoing impacts of federal trade and biofuels policies. Many vehicle and component systems manufacturers have suspended production.
Analysts disagree about the extent of the current economic contraction, let alone what the future holds.
Yet some industry veterans like Steve Carey, President and CEO of National Truck Equipment Association, remain optimistic over the long-term: “There is no question this crisis will change how we think and act, but we believe we will conquer the challenges of COVID-19,” said Carey. “We also believe the commercial vehicle community will come out strong.”
We have conflicting and concerning information on electric vehicles. On one hand, analysts predict sharp declines in global EV sales due to low oil prices and other factors. The Trump Administration action to weaken fuel economy standards could impose further harm. However, Europe and China are bucking analysts’ predictions on EVs while conventional vehicle sales are tanking. If the crisis and Administration actions widen the gap between U.S. and global EV markets, that could be bad news in the long-term for American automakers and workers.
Clean Cities coalitions are engaging and helping. We’re also preparing for a time when we can return to our work of education, advancing policy solutions, and conducting analysis.
Our Work Remains Relevant Despite Limited Bandwidths
Today, hardly anyone in transportation services, logistics, or government at any level has the bandwidth to discuss and advance clean transportation projects – acquiring cleaner fuels and vehicles, developing infrastructure, education and training.
Many logistics-related industries, especially food-related, are experiencing a boom. One fleet partner to CFO, with significant regional and last-mile deliveries, explained how their vehicles are on the road virtually around the clock. They stop only 30-minutes per day for maintenance checks. Revenues are up but the stress is tremendous. Some food industry and logistics personnel also face major health risks.
Clean Cities coalitions are engaging and helping, while showing understanding. We’re also preparing for a time when we can return to our work of education, advancing policy solutions, and conducting analysis.
What the Future May Hold
Looking longer term, the world and transportation’s role in it will certainly change as a result of COVID-19. Some changes will accelerate ongoing trends while others may reverse them. A recent article contains an analysis from Adam Jonas, the transportation industry analyst at Morgan Stanley Research, that suggests winners may include makers of regional delivery and last mile fleet vehicles. However, shared transportation services may suffer. Predictions of individual vehicle sales are mixed. People might commute less but they may use personal vehicles rather than shared local mobility, airplanes and trains.
The world and transportation’s role in it will certainly change as a result of COVID-19. Winners may include regional delivery and last mile fleets.
Clean Transportation in Next Government Stimulus
So, what else should we be doing now? One thing is to make sure the next stimulus package from Washington leverages clean transportation solutions. In a recent conversation with Joe Annotti, vice president of programs at GNA, Joe told CFO, “To understand the potential implications of stimulus funding on the clean transportation market, we don’t have to look any farther back than 10 years ago to the American Recovery and Reinvestment Act. That injection of funds stimulated the medium- and heavy-duty alternative fuel market, particularly in the natural gas space. Now again, we have the opportunity for a correction in how we approach clean transportation. A potential 2020 stimulus bill will ideally stop fleets from asking ‘How can I afford alternative fuels?,’ and instead ask, ‘How can I afford not to?’”
Investments in transportation infrastructure also need to include vehicle refueling and recharging. Clean Cities coalitions are best positioned to make sure demand-side investments are smart and make an impact locally where it counts.
We Can and Must Demonstrate the Fundamental Advantages of Clean Transportation Solutions
The climate crisis has moved to the back burner for now, but solving it remains just as essential. Can we still “bend the curve” on climate even with lower oil prices and potentially diminished government spending capacity and attention spans? Doing so remains our collective mission.
We need continued progress on technology innovation, demonstration, data analysis and creative financing solutions.
We have correctly argued that in the long-term cleaner vehicles are a better economic deal. It’s time to prove it. We need continued progress on technology innovation, demonstration, data and analysis, then more creativity with financing solutions. These and other steps will leverage the total cost of ownership advantages of clean and efficient solutions of all kinds.
Our shared mission is as vital as ever, and relevant to what we collectively face right now. A recent article in the New York Times cited a nationwide study linking morbidity from COVID-19 to levels of particulate matter air pollution. Let’s work through this crisis, then refocus on our clean transportation mission and how to get it done in a changed world.
