Fleet electrification was supposed to be inevitable. Governments across the world set aggressive targets to decarbonize freight, starting with trucks. California’s Advanced Clean Fleets rule mandates that every new truck sold after 2036 be zero-emission. The European Union went even further, 100% CO₂ reduction for new vans by 2035 and 90% for heavy-duty trucks by 2040.

Both efforts were built on the logic that climate urgency requires intervention because markets move too slowly. Transportation makes up 29% of U.S. emissions, and freight trucks are the fastest-growing slice. In the EU, trucks and buses make up just 2% of total vehicles on the roads, yet they account for 25% of all transport-related emissions. But where Europe doubled down on state-led mandates, the U.S. has moved back toward a market-led experiment.

President Trump’s new administration has already revoked California’s waiver authority, ending its ability to enforce stricter standards than the federal baseline, and frozen unspent EV infrastructure funds. Environmental Protection Agency (EPA) rules requiring roughly 25% of new truck sales to be electric by 2032 are being “reconsidered”.

At first glance, this is a simple political reversal, but the reality is that electrification was never just a regulatory problem - it’s an infrastructure problem. No matter who’s in office, that can’t be legislated away. To achieve their electrification goals, governments should focus more on reducing the actual barriers to fleet electrification, such as infrastructure challenges and high upfront costs. Without this reprioritization, large scale fleet electrification will remain out of reach for most countries.

But it’s not all doom and gloom. Developments in renewable energy infrastructure have made it not only cheaper to deploy than fossil fuel alternatives but also faster to scale. When paired with battery energy storage systems (BESS), renewables can smooth the “duck curve” - stabilizing supply and enabling continuous, cost-efficient power delivery. Applied to battery electric vehicle (BEV) fleets, especially in last-mile logistics where range is no longer a constraint, this integration could radically reshape delivery economics. We see a significant opportunity for investors willing to underwrite the infrastructure deals to enable broad-based fleet electrification.

Europe’s approach is pure industrial policy — set the direction, force the market, and backfill the costs with subsidies and carbon penalties. The EU’s aggressive mandates work because the bloc treats decarbonization as a collective obligation, even if it means higher short-term costs or uneven national readiness. The U.S., by contrast, is letting markets decide. The argument is that if electrification makes operational sense — on cost, uptime, and total cost of ownership — fleets will transition voluntarily.

So far, Europe’s model has delivered clearer direction but limited scale. Five out of seven EU truck makers are largely on track to meet the 2025 CO₂ target of a 15% reduction from 2019 levels, and the bloc’s new Clean Transport Corridor initiative is knitting together cross-border charging infrastructure. Yet, in the first half of 2025, just 3.6% of new truck sales in Europe were electric, an order of magnitude below the 38% target set for 2030.

In the U.S., adoption is more fragmented. Federal incentives under the Inflation Reduction Act pushed battery trucks closer to cost parity in several classes. The law allowed commercial EVs to receive a tax credit for up to 30% of the sales price, up to $7,500 for vehicles under 14,000 pounds and up to $40,000 for all other vehicles.  By 2024, U.S. electric truck sales surpassed 1,700 units, exceeding the total sold between 2015 and 2022. More than 15,000 medium- and heavy-duty EVs were deployed in 2024. With the passing of the One Big Beautiful Bill Act (OBBBA) in July 2025, many of the incentives of the Inflation Reduction Act were curtailed. Without stable regulation, national uptake remains inconsistent.

The stakes of these approaches are not just climate outcomes, but cross-border trade competitiveness, innovation pathways and political durability. The elephant in the room is that both strategies are being met with the same set of constraints, the physics of energy, mass, and infrastructure. Without solving for these, fleet electrification will never fully evolve.

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