A rising tide of regulatory mandates limiting the use of gasoline- and diesel-powered vehicles is making these engines an endangered species. Federal and state environmental agencies in California and other states are forcing businesses, including linen, uniform and facility services companies, to begin converting their fleets to alternative-fuel vehicles.

The shift either to electric, hydrogen-powered or other types of zero-emission vehicles that don’t rely on fossil fuels is likely to begin happening in a big way in the next 5-7 years. That was the consensus view of a panel of McKinsey & Co. fleet experts who spoke at the recent ...