California is Making Changes that will Affect your Business:

Across the U.S., approximately 60% of material handling operations use electric forklifts. But in California, it could soon be 100%. Proposed regulations from the California Air Resources Board (CARB) will eventually phase out IC (Internal Combustion) forklifts to achieve Zero-Emissions by 2035 to reduce air pollution. Southwest Toyotalift is working with CARB and strives to better understand what we as the forklift dealer and you as the customer need to do to prepare for the impending legislation scheduled to hit us in January 2026.

The California Air Resources Board (CARB) is developing a measure that will require the use of zero-emission forklifts within fleets throughout California starting 2026.  The Zero-Emission Forklift Measure was supported in Governor Newsom’s Executive Order N-79-20 signed on September 2020. 

The purpose of the measure is to accelerate deployment of zero-emission technology in forklifts throughout the state to reduce emissions of oxides of nitrogen (NOx), fine particulate matter (PM), other criteria pollutants, toxic air contaminants, and greenhouse gases (GHG).  

What you need to Know: Before you Buy, Keep this in Mind...

Starting January 1, 2026, a fleet operator may not acquire, possess, operate, or allow the operation of an Affected Forklift in California:

  • The main segment targeted by the regulation will be large spark-ignition (LSI) forklifts with a lift capacity of 12,000 pounds or less.
  • If you have engine-powered forklifts in your fleet that are 10 years or older, then you will no longer be allowed to operate them.
  • IC powered forklift fleets will need to be phased out and transitioned to alternative fuel power lifts. Separate phase-out schedules are introduced for Class IV and Class V forklifts.
  • New forklifts being purchased or leased will be zero-emissions
  • Not all forklifts will be affected by the regulation.

To make the transition less difficult, there are several exemptions and allowances built into the regulation, including a rental allowance for fleet operators. Fleets will be allowed to rent LSI forklifts for unexpected occurrences or seasonal workload increases each calendar year.

Similarly, a low-use exemption will allow fleets to keep several LSI forklifts if they’re used fewer than 200 hours each year. The number of low-use LSI forklifts a fleet can keep will be limited to 10% of its total units.

Notably, microbusinesses, which have fewer than 25 employees and less than $5 million in annual gross receipts, will be allowed to keep one low-use LSI forklift indefinitely.

Phase Out Schedule:

A fleet’s turnover obligation for Class IV forklifts is 25 percent per year  for the first 4 years of the phase-out and 15 percent per year for Class V forklifts for the first 6 years of the phase-out. Class V start of phase-out was delayed by 3 years to 2029 for Small Fleets (≤25 forklifts).


Forklifts that won’t be affected include rough-terrain forklifts, pallet jacks, Aerial lifts, Military tactical vehicles, forklifts with a permanently integrated telescoping boom as its primary work implement, forklifts with a diesel-fueled or alternative-diesel-fueled off-road compression-ignition engine subject to the In-Use Off-Road Diesel Fueled Fleets Regulation and forklifts owned or operated by facilities that are subject to the Regulation for Mobile Cargo Handling Equipment at Ports and Intermodal Rail Yards.

How is your business affected?

Investment, Training and Infrastructure

For some companies, switching out IC forklifts with Electric forklifts will be an investment to plan for. That cost will include the forklifts, batteries, chargers and the infrastructure of your facility to have enough power to charge your fleet properly.

Your employees will also need more training for operating the electric forklifts (OSHA required), charging them properly, maintaining them and how to work safely in the charging stations area.

Fortunately we at Southwest can help you with all of these items. Please contact us to help plan for the transition.

The Benefits of Electric and Zero Emissions Forklifts

Switching over to electric forklifts has several benefits for your business, products, employees and the environment. Here are a few things to consdier when making the transition.

  • Reduced Fuel Costs
  • Less Noise
  • Lower Emissions
  • Lower Operating Costs
  • Energy Rebate Program
Learn more about these benefits and other reasons to make the change on our "8 Reasons to buy Electric forklifts" blog page. Contact us for a site visit and to discuss which electric forklifts will be the best fit your specific business needs. We help you justify the switch to electric equipment by providing you with case studies, a tailored ROI (Return on Investment) and more.

Get Money $$ to Help with your Forklift Purchase

Quarterly Incentive $$ for Using Electricity

Get Paid Quarterly for Existing or Switching to Electric Equipment. CARB offers incentives to zero-emission electric equipment owners.

Electric forklift and vehicle owners in California & Oregon can earn cash incentives from California Air Resources Board (CARB) Low Carbon Fuel Standard (LCFS) for their business.

Tax Deductions on Forklift Purchases

This means U.S. companies can deduct the full purchase price of ALL qualified equipment purchases, up to the limit of $1,160,000.

In addition, businesses can take advantage of 80% bonus depreciation on both new and used equipment for the entirety of the year.