California Zero-Emission Vehicle Incentives

California has adopted many Clean Transportation Incentives that encourage, and in some cases require, state agencies and businesses to invest in Zero-Emission Vehicles (ZEVs). The initiatives contribute to the California Air Resources Board’s mission to protect public health from the effects of air pollutants and combat climate change through the reduction of greenhouse gas emissions. While ZEVs can lower operating costs and reduce emissions for many state agencies and businesses, the initial investment can be significant when considering the vehicle’s purchase price and necessary infrastructure requirements needed for charging. To help overcome a portion of the financial outlay, California offers several state incentives to promote adoption of ZEVs.

Hybrid and Zero-Emission Trust and Bus Voucher Incentive Project

One notable program is the Hybrid and Zero-Emission Trust and Bus Voucher Incentive Project (HVIP) that provides point of sale rebates for public and private operators (including tax-exempt entities) of medium- and heavy-duty truck and bus fleets, for example, individual owner-operators, small businesses, corporate leaders, school districts, and municipal fleets. The amount of funding available depends on specific vehicle criteria including, type (class 2b - 8), size, make, model, manufacturer, purchaser, and fleet size.

The program is funded for several vehicle and infrastructure categories including Standard HVIP vehicles and other set-aside funds for specific vehicle types. An update of current funding can be found here: https://californiahvip.org/funding/.

Eligible Vehicles

A full list of eligible vehicles including manufacturers and list of dealers who sell them can be found on californiahvip.org. Types of vehicles include heavy-duty buses, medium-duty buses, refuse trucks, school buses, step and panel vans, straight trucks, and tractor trucks. Separate, specific funding is set aside for the following vehicle types: drayage, public transit, public school buses, and innovative small e-fleets.

Rebate Amounts

Rebate amounts can range from $20,000 to $240,000 per vehicle. There may be voucher adjustments that increase or decrease the rebate amount for some public and private buyers based on fleet size and annual revenue. Additional rebate modifiers exist for vehicles domiciled in disadvantaged or low-income communities. It is also possible that HVIP may be combined with other financial incentives including local, federal, and other industry specific incentives, this process is called stacking. After the other incentives have been applied at their maximum allowable amounts, HVIP will fund the remaining cost up to the maximum voucher amount. The maximum voucher amount is the full cost of the publicly owned vehicles and 90% of the cost of privately owned vehicles (excluding taxes and fees).

Dealers

To qualify, vehicles must be purchased through a HVIP Approved Dealer. Dealers must go through a formal training and registration process, which may include compliance with California labor laws. Manufacturers must also register vehicles for them to be eligible for the rebate.

With California’s commitment to combating the state’s carbon footprint and harmful effects of air pollutants, the state has several upcoming ZEV mandates including for new cars and passenger trucks, school buses, and transit bus fleets. These mandates come with a variety of incentives for vehicle purchase, investments in infrastructure, fleet resources, and financing programs. A summary of California’ s ZEV Funding Resources can be found here.

Navigating California’s ZEV incentive landscape is difficult. Eide Bailly can help you plan and maximize your California or other state clean energy incentive. Contact our State and Local Tax Credit & Incentives Group or Energy Incentives Group.