In the last couple years, occasionally someone will ask me about the impact of the truck and bus regulations put in place by California’s Air Resource Board (CARB). I am certainly not an expert on reading and understanding regulations and I am okay with that.
In short, these regulations are a stair-step of rules governing what vehicles will be allowed to operate in California — with the goal of eliminating the older, worst-polluting vehicles by not allowing them to register as legal vehicles. These rules are aggressive compared with the rest of the country.
I do not want to address whether the regulations make sense or not. That is up to voters in California. Rather, I would like to examine the impact on the aftermarket for medium- and heavy-duty vehicles.
For this analysis, we decided to look at the aftermarket in California for 2023, the year when diesel-powered vehicles (and for this analysis we are looking at Class 6-8 trucks and school buses) older than model year 2010 will not be allowed on the road. There are a number of exceptions as their impact, I believe, is minimal and some wouldn’t apply to this analysis — like exemptions for RVs.
At MacKay & Company, we estimate the operating population for on-highway vehicles for Class 6-8 trucks, school buses and trailers in total, by state and by metropolitan statistical area. (We also have operating populations for transit buses, motor coaches, light duty and off-highway vehicles and for other countries, but for this we are just interested in Class 6-8 trucks and school buses.)
With no regulation impact, we estimate the Class 6-8 truck and school bus operating population in California in 2023 will be roughly 512,000 vehicles or 14 percent of the total U.S. operating population. These 512,000 vehicles will produce an aftermarket parts opportunity of just over $3 billion at retail.
If the vehicles older than 2010 are eliminated (193,000 vehicles), that aftermarket opportunity drops to $2.1 billion, or a decrease of about $900 million, nearly a 30 percent decline. But this assumes that none of those older vehicles are replaced, which is not likely — people don’t register and insure vehicles to park them — they are registered to put into use.
