The ACT regulation is part of a holistic approach to reduce tailpipe emissions by increasing sales of zero-emission medium- and heavy-duty vehicles. Manufacturers who certify chassis or complete vehicles with a gross vehicle weight rating (GVWR) greater than 8,500 lbs. are required to sell zero-emission vehicles (ZEV) as an increasing percentage of their annual California sales starting with the 2024 model year. Annual reporting began with the 2021 model year. The first report was due by March 31, 2022, and each successive annual report is due no later than 90 days following the end of each model year.

Annual Requirement for Manufacturers

Any vehicle manufacturer that produced and delivered for sale more than 500 on-road medium- and heavy-duty vehicles with a GVWR over 8,500 lbs. into California is required to report annually. Manufacturers that annually produce and deliver for sale 500 or fewer medium- and heavy-duty vehicles into California may elect to voluntarily report to generate ZEV credits and near-zero ‑emission vehicle[1] (NZEV) credits. Manufacturers may earn, bank, and trade credits for ZEVs and NZEVs they produce and deliver for sale in California, including trucks supported with incentives from the Clean Truck and Bus Voucher Incentive Project (known as HVIP).

Manufacturers that produce and deliver for sale Class 7-8 tractors must meet compliance obligations by selling Class 7-8 ZEV tractors. For other vehicle types, manufacturers can meet their compliance obligations with sales of any type of Class 2b-8 vehicles. The vehicle manufacturer of record is the party that can earn credits and accrues deficits. ZEV credits, NZEV credits, and deficits are earned when the vehicle is produced and delivered for sale.

Manufacturer Vehicle Sales and Credits

In 2023, manufacturers sold 116,483 vehicles in California, where 18,473 were ZEVs. Table 1 below displays the reported total number of 2023 model year medium- and heavy-duty vehicles, Class 7-8 tractors, and ZEVs produced and delivered for sale in California. Through the 2023 model year, no NZEVs were produced and delivered for sale into California. Combined sales from 2021 through the 2023 model year totals 26,924 ZEVs.

Table 1 - Total 2023 Model Year Medium- and Heavy-Duty Vehicles Sales

Table 2 below displays the projected ZEV credits, and the projected Class 7-8 ZE tractor credits for each manufacturer for their 2023 model year sales as of March 30, 2024. The term “projected credits” is used to identify the number of ZEV that a manufacturer can earn from producing and delivering vehicles for sale to the ultimate purchaser in California.

Table 2 - Projected 2023 Model Year ACT Total Credits and ZE Tractor Credits

Manufacturer Credit Transfers

• I. Advanced Clean Trucks Regulation Credits

A manufacturer may bank and trade ACT credits to meet their compliance obligations. Any ACT credit trades must be reported in accordance with the requirements described in Section 1963.4(b). Table 3 displays the ACT credit traded between manufacturers in 2024 and reported by March 30, 2024.

Table 3 - ACT Credit Trades

• II. Advanced Clean Cars Credits

A manufacturer that produces Class 2b or Class 3 medium-duty passenger vehicles (with a GVWR from 8,501 to 14,000 pounds) has additional flexibility to count their ZEV sale towards compliance with the Advanced Clean Cars (ACC) regulation instead of the ACT regulation. Table 4 displays the number of ZEVs that are being allocated to earn credits in the ACC regulation and the number of ACT credits that were forgone with the transfer.

Table 4 - ACT Credit Allocations to ACC for the 2022 and 2023 Model Year

Manufacturer Total Credit Balance

Manufacturers are required to produce and sell medium- and heavy-duty ZEVs beginning with the 2024 vehicle model year consistent with the ZEV sales percentage schedule described in the ACT regulation. However, manufacturers can generate early credits for ZEVs and NZEVs produced and delivered for sale in California for vehicle model years 2021 to 2023. Table 5 displays the credit balances for each manufacturer from 2021to 2023 model year data reported in ACTRS. The projected ZEV credit balance reflects the remaining total credit balances for each manufacturer as of March 30, 2024, and reflects credits transferred to ACC compliance and credits traded between manufacturers.  

Table 5 – Net Total ZEV and Tractor Credit Balance

ZEV Sales Summary

The early credit provisions mean that manufacturers have already generated enough credits to meet the estimated 2024 model year compliance obligations for the total of vehicles and tractors produced and delivered for sale in California. From 2021 through 2023, manufacturers have generated a total of 24,251 ZEV credits, which is the gross total of credits generated before any credits were transferred to ACC. After ACC credit transfers are incorporated, manufacturers still have a remaining net credit balance totaling 18,514 credits for sales prior to 2024, which is more than twice the estimated statewide deficits (8,100) needed for 2024 model year compliance. By the end of 2023, manufacturers generated enough Class 7-8 tractor credits (1,675) to offset the estimated 2024 model year Class 7-8 tractor deficits (1,565). Additional 2024 model year sales will generate more credits.

In 2023, manufacturers sold ZEVs as about 16% of total sales when no truck purchase or manufacturer sales requirements were in effect. To put this in context, the statewide ZEV sales requirement for the 2024 model year is equivalent to about 6% of total annual sales. It is likely that ZEV sales will continue to grow as manufacturers launch new ZEV models and ramp up production to meet annual ZEV sales percentages starting with the 2024 model year.

Several manufacturers already have earned ZEV credits beyond what they need to comply by the end of 2024 including Bluebird, BYD, Ford, GreenPower, Hyundai, Lion Electric, Micro Bird, Nikola Motors, Orange EV, Rivian, Sea Electric, Tesla, Volvo, and XOS Trucks.

More Information

• ACT Regulation
• ACC Regulation

This report satisfies the public disclosure requirement provided in the ACT Regulation. (Cal. Code Regs., tit. 13, §1963.5 (a)(3)).

[1] NZEV is an on-road hybrid electric vehicle that has the capability to charge the battery from an off- vehicle conductive or inductive electric source and achieves minimum all-electric range.