California Electric Truck Incentives: Easing the Transition
November 10, 2023
California recently implemented the Advanced Clean Trucks regulation. This program accelerates the transition to a zero-emission transportation industry by mandating that all commercial truck sales be zero-emission by 2040, and all off-road yard truck sales be zero-emission by 2042. However, adhering to these standards often requires substantial financial investments and operational adjustments for fleet owners and warehouse operators. To assist truck owners in meeting compliance standards, California has offered a variety of funding programs, rebate incentives, and grants to mitigate the costs of transitioning to electric.
In this article, we'll provide a comprehensive overview of funding opportunities that help California fleet owners make the switch to electric trucks with minimal costs and quick returns on investments.
Finding the Incentive Opportunities Right For You
While transitioning to commercial electric vehicles (EVs) is mandated through state policy, finding reliable rebate programs and incentives for California truck owners can be complicated and overwhelming. A new electric truck can cost up to $400,000 per electric semi, nearly four times the cost of a traditional internal combustion engine (ICE) truck. However, by finding the appropriate financial incentives, fleet owners can significantly reduce these costs to be comparable to ICE vehicles. The following list offers insights into funding programs that can help fleet owners and warehouse operators easily meet compliance standards.
1. The Low Carbon Fuel Standard
One of the most prominent and lucrative programs that encourages fleet owners to switch to electric is the Low Carbon Fuel Standard (LCFS). Under the LCFS, fleet owners are rewarded with rebate credits based on the amount of emissions reduced through the use of their electric and low-carbon vehicles. These credits can be sold to fuel suppliers and provide fleet owners with additional revenue from their EVs.
Unlike other funding opportunities, the LCFS generates ongoing revenue, rather than a one-time payment, and can be coupled with other funding sources. This can help fleet owners and warehouse operators significantly reduce the costs of their EVs over the life of their vehicles.
Smart Charging Technologies’ Smart Rebates program offers assistance in applying for, reporting, and selling LCFS. Learn how you can take advantage of the LCFS and start earning rebates: Smart Rebates for EV Fleets
2. Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project
The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), was implemented by the California Air Resources Board (CARB) with the specific goal of making electric trucks and buses more attainable across the state. The project operates by providing vouchers or grants to fleet owners, effectively reducing the upfront costs of purchasing electric or hybrid trucks and buses. Fleet owners are encouraged to apply for up to 30 vouchers per year.
The HVIP administers a budget of $1.7 billion to be distributed to fleet owners and drayage operators throughout California; however, these funds will only remain available to fleets purchasing EVs ahead of compliance periods or in excess of regulatory requirements.
3. Carl Moyer Memorial Air Quality Standards Attainment Program
Similar to the HVIP, the Carl Moyer Memorial Air Quality Standards Attainment Program is a funding initiative aimed at incentivizing fleet owners to transition to zero-emission and low-carbon vehicles. By providing grants and financial assistance to vehicle owners, the program helps offset the higher costs associated with purchasing low-emission vehicles or retrofitting existing ones.
The grants awarded in the Carl Moyer Program are available to individuals, businesses, and government agencies, for both off-road and on-road vehicles. Additionally, funding may be awarded for infrastructure projects, including charging stations and alternative fuel stations for light, medium, and heavy-duty trucks.
The Carl Moyer Program is open year-round and is administered by local air districts. To learn how to receive funding, contact your local air district.
4. Zero-Emission Freight and Marine Statewide Grant Funding
The Zero-Emission Freight and Marine Statewide Grant Fund (ZEFM) is aimed at providing financial assistance for the transition to electric and low-carbon marine vessels, cargo handling equipment, and heavy forklifts. While this program doesn’t provide aid in transitioning on-road vehicles subject to the ACT Regulation, it may assist warehouse operators looking to offset fines from the WAIRE Rule, which targets direct and indirect emissions from warehouses in Southern California.
Applications for the ZEFM opened in August 2023, and offer $20 million to eligible applicants in California, rewarded on a first-come-first-served basis.
5. Clean Off-Road Equipment Voucher Incentive Project
The Clean Off-Road Equipment Voucher Incentive Project (CORE) targets its funding incentives to off-road equipment with the intent of mitigating the high costs of electric material handling equipment (MHE) with point-of-sale discounts. Many MHEs fall under the jurisdiction of the Advanced Clean Fleets (ACF) Regulation, which mandates all off-road yard truck sales be zero-emission by 2042.
The CORE program utilizes vouchers that fleet owners can pick and choose from to help them fund their purchased or leased equipment, as well as infrastructure projects for charging and alternative fueling stations. Additional funding is made available to small businesses and disadvantaged communities.