The Evolving Forklift Market: Electrification, Tariffs, and Remarketing Insights

But let's talk about forklifts in the context of environmental impact or regulations.

You know, we see emission controls sometimes playing into equipment that has internal combustion engines, right? How is this relevant in the forklift universe?

It's the same as the truck and trailer market.

I mean, we see states like California that have been pushing their industrial market towards all electric vehicles.

I believe they've pushed back their gas vehicle ban to 2035, if I'm not mistaken, which can present some future issues when it comes to recycling assets at the end of life.

Lithium and fuel cell batteries from forklifts, as opposed to cars, at the end of life present a danger to the environment and recycling comes at a cost.

Whereas traditional lead acid batteries also do have environmental impacts.

but they do have value.

So in terms of how it affects leasing assets, some of these new technologies do present some recycling issues where the EPA and the regulation is forcing us to use these types of assets.

So eventually, we are going to be in a little bit of a quandary when it comes to recycling out some of these assets.

The EPA almost inadvertently is bringing a product that is not environmentally friendly to replace a product that is not environmentally friendly.

So going back to your car analogy, right? The forklifts are available in both battery powered and internal combustion engine powered variants, right? So I read as we were preparing for the podcast that Over time, the number of battery powered forklifts that are sold has been growing from maybe like the 40 percent range to now where maybe it's somewhere between 60 and 70 percent of all forklifts delivered in any year are electric.

So what's what has been the driver for that shift in internal combustion versus battery?

There's two main drivers.

The first main driver is what we just referenced.

States like California pushing away from gas vehicles, just an environmental strategy.

But also the maintenance curve on gas trucks is a lot higher than electric trucks.

You have to constantly PM engines.

You have engine leaks.

You have engine breakdown failures.

Whereas electrics, if they're properly maintained, can last five to seven years.

And after that, you're just replacing a battery.

So your maintenance overall cost of ownership is a lot cheaper for an electric versus internal combustion.

That's the main selling point in it.

And I believe you are accurate.