New 2025 CAL CARB Rule Predicted to Hit RV Industry Hard

RV Lemon Law Lawyer Ron Burdge Predicts RV Industry Changes and What It Means to You

For the last few days we have been analyzing the new pollution emission CARB rule in California to understand what it can, may, likely, and won’t do to the RV industry and RV owners (and, no, California isn’t outlawing new C and A class RV sales but they might as well of), and how things in the industry are definitely going to go through some big changes real soon.  It is all outlined below, including some insights and predictions based on our lawyers' watchful eyes on the industry for the last 40+ years. 

The Short Version: It boils down to new class C and A sales dropping, used RV sales increasing, only two remaining mass production national chassis makers left, market share gobbling about to happen, increasing prices, how a consumer can still buy a class C or A in a CARB rule state, how RV buyers can’t get around it by going out of state to buy their new RV, and generally just how bad it may, probably will, affect RVers nationwide (31% of the country). Folks, this won't be pretty but you need to know what may be coming so you can protect yourself.

The Details: California’s New Tailpipe Pollution Rule, knocks out the 2 biggest (and best) RV chassis makers, directly impacts 31% of the country, and will make new and used RVs more expensive everywhere – do you want a new RV? You may want to buy it now before the new CARB rule makes it more costly.

The new California CARB rule that become effective in 2025 ais going to cause major changes to the RV industry and that means RV buyers too. Originally aimed at the tailpipe pollution levels of fossil fuel emission engines, gas and diesel, of big rig trucks, because those truck chasses are also the chassis foundation of class C and A RV's, the new emissions level mandate will hit the Rv industry too. It will hit hard and it will have an industry-wide and  nationwide impact.

Here's the reason we see big changes coming.....

   When you have an industry that depends on one type of diesel chassis supplier for everything it builds and the two best and biggest players (Spartan and Freightliner) in the C and A chassis market decide they are only going to build a product that you can't sell in all 50 states, things are going to change. There are a few other motorized chassis makers out there, notably Monaco, Prevost, etc, but none of them appear to have any ability to meet the new CARB emission requirements. For all practical purposes, the new CARB rules will affect the entire RV industry and all motorized RV buyers.

There are ten states that follow the Cal CARB rules and 5 of them along with California make the new change effective next year (Massachusetts, New Jersey, New York, Oregon and Washington, a total of 86.8M people), the other five will be after that(Vermont’s date begins in 2026. Colorado, Maryland, New Mexico and Rhode Island have until 2027, that's another 15.8M). So if nothing changes, in 2025 new fossil fuel chassis of RV's can only be sold in 44 states, Then it will be prohibited in another 4 and then one more after that. The new Class C and A RV marketplace will shrink by 102,747,000 people, 31% of the entire U.S. population. So if no other state adopts the CAL CARB rule, by 2026 new fossil fuel RVs will only be sold in 39 states and the RV industry's two big chassis builders will have a product that can only be sold in 39 states where only 59% of the market exists. A change of that size means that things are going to change in the RV industry and the Rv retail sales marketplace nationwide.

Here's the Domino Effect I see coming ..... and the problems that come with it.

1. As the effect of the new CARB level hits the market, the dealer availability of new C's and A's in the CARB states will go down as the industry reroutes the unsalable C and A units coming off the production lines to non-CARB states where they can be sold retail. There’s no point in shipping a freshly built RV built on a Spartan or Freightliner chassis to California or any of the other 5 CAR states because it can’t be sold there.
2. That’s when the industry will shift its entire future C and A sales focus to the 54 non-CARB states, leaving a C and A class new RV supply vacuum in the CARB states. After all, they can’t sell them there anyway.
3. That will cause CARB state buyers to turn to more to used C and A RV sales, which, in turn, will increase those sale and that will cause used retail prices in the CARB states to go up. It’s simple supply and demand.
4. Meanwhile, back in the 54 non-CARB states we will see the C's and A's dealer lots filling up with the C and A units they ordered and being crowded with the ones that were built before the CARB update was announced and now can no longer be shipped to the CARB states because they can’t be sold there.
5. So for a time there will be a higher than usual supply of new C's and A's in the non-CARB states, and normal market economics says that when supply exceeds demand, prices should go down but that doesn’t always happen, and even if it does, supplies will eventually drop to the demand level anyway. And if the Buyer is from a CARB state, the dealer will know they couldn’t buy in their home state so they are a “captive” buyer who will pay the higher price for what they can’t get in their home state.
6. Somewhere early in the process the CARB-compliant chassis manufacturers, and there are only two now (Ford and Mercedes) will ramp up production to meet the new C and A sales demand in the CARB states that was caused by kicking the non-CARB compliant chassis (Spartan and Freightliner) out of their state marketplace.
7. Because ramping up of production by both the chassis builder and the RV builder will take time, some CARB state buyers will opt for the immediate purchase of a Class B RV, which will likely cause demand to go up higher than prior sales projections, which will likely cause Class B prices to go up too. But if the Ford and Mercedes and their RV manufacturers are smart, and they've never been dumb, they will ramp up the availability and marketing of their B's in the CARB states to take the sting out of the hit they will be facing in the C and A markets. And the pandemic taught all of us what that ramped up, high speed manufacturing does for to quality. But some CARB state RV buyers won’t step down to Class B units so what do they turn to?
8. The new C and A RV buyers in the CARB states who don’t want to “size down” have to do one of two things. Either they go out of state to buy their new C or A RV (which has its own problems we will talk about in a minute) or they will more likely start buying used C's and A's. Buy it here and buy it now have long been the RV dealer’s sales mantra. That will likely cause an increase in demand for used C and A units in the CARB states, which can create a demand that exceeds supply, causing those retail prices to go up too.
9. Meanwhile, there is going to be quick and increasing vacuum of C and A chassis suppliers, with only Ford and Mercedes left in the nationwide chassis product market because it would take any new player years to get into that product market and by then Ford and Mercedes will have gobbled most of it up, further discouraging any start up from even starting up. So who gets what?
10. Ford has the wherewithal and is in the position to quickly grab the lion's share of the C chassis market and Mercedes is in the position to go after the B market and the wherewithal to quickly expand its share of the B market amidst the overall market turmoil, but RV buyers can expect those manufacturers already in the B market will quickly try to increase their own market share. The real problem is in class A. Presently no single chassis manufacturer has the ability to quickly get into, let alone take over, the A chassis market. Expect to see Ford and Mercedes aggressively go after their C and B markets. and as both of them move on it, they will go after all of those markets nationwide they and not just the CARB states.
11. While the new C market dogfight is going on, what happens to new A class units? The logical thing for Ford to do is to head into the A chassis market as fast as it can because it already has the C class experience and the money resources and the extra emission credits to expand upon and no one else will likely get there faster than Ford.
12. The near future effect for RV buyers is that no matter what RV they buy (new or used) or where they buy it (in a CARB state or not), their next RV is likely to cost more as the RV market moves into the post-CARB emission changed era. But what’s all this mean for RV buyers?
13. As for quality of future motorized A and B and C chasses, well, odds are that is going to change too, and not for the better. When the RV marketplace becomes a seller's market, history tells us that quality takes a nose dive as production is jacked up to the high profit "quality be damned, get it out the door" manufacturing model. So new RV buyers can expect that with limited  chassis makers left in the market you will likely see a decrease of quality as the industry pushes up the quantity. To top that off, when you look at the chassis makers that were in the market before this CARB change, in our experience, Ford was not the best but they are poised to run away with the C market and expand into the A market. The best chasses? In our experience those were made by the same two big chassis makers who are now bailing out of a big chunk of the national marketplace.
14. Ok, so manufacturing and market share is changing, will retail dealers change the way they treat RV buyers too? Probably. Ahhhh, there’s the retail rub. Dealers are in it for the profit and they know that supply and demand rule about pricing too. So RV buyers can expect higher prices. But when we’ve seen prices rise, we often see other sales tactics kick in for higher profits too. Things like extended warranties and all the other sales “soft add on’s” that dealer’s sell. We also see more instances of outright sales fraud taking place, where misrepresentations about costs and products turn increase in both quantity and dollars that come out of the buyer’s pocket and into the dealer’s profits. So RV buyers will have to be more careful than ever about what they buy, who they buy it from, and where they buy it.
15. Some Rv buyers who live in a CARB rule state may be thinking they can just go to another state and buy their new C or A RV and bring it home and get around the whole problem. Not so fast. The new CARB rule is set up so that an RV buyer can't get around it. That non-compliant new RV that is bought in a non-CARB state go out of state, buy a new RV, and bring it back home to get around their home state's CARB rules. That won't work because you won’t be able to legally register and license it in your home state at all.
16. Upon learning that some CARB state new RV buyers may start using states like Montana that let them set up a "LLC" corporation there to be the buyer of the RV and then just register it in that state. That used to be a trick to avoid the selling state’s sales tax too, but doing that can also void all or the bulk of your factory warranty.  So you might get your registration there, but you can expect the CARB states are going to be watching out for that too when you come home with a brand new shiny RV with emissions that violate your home state's law! Worse yet, you still run the risk that your factory warranty gets voided by using the LLC trick. So what's a new RV with no warranty at all worth? Do you feel lucky?