For some fleets, electrification begins and ends at the vehicle’s price tag. When budgets are tight, they can’t justify the higher sticker price of EVs and opt for less costly ICE vehicles. For other fleets, the cost of charging infrastructure is the barrier. Additional funding outside of a fleet’s budget can help fleets remove these barriers. Fortunately, it’s available for now.

Electrification incentives can significantly offset the acquisition price of electric vehicles and fund charging infrastructure, too. Here’s how to understand the funding landscape and find the electrification budget you’ve been looking for.

Where to Look for Incentives

Electrification incentives are available from federal, state, and local sources, each of which has its own eligibility requirements. Incentives come in the form of tax credits, grants, rebates, vouchers, and financing programs, depending on which entity is providing the funding.

For instance:

• Federal agencies offer tax credits and grants to fleets nationwide but may have specific vehicle, buyer, and use requirements.
• State governments may offer rebates and tax credits for vehicles registered in the state. Look for upfront discounts or reimbursement funding for vehicle purchases and infrastructure projects.
• Local agencies can offer rebates and infrastructure support for fleets operating within the municipality or region.
• Utility-funded programs may offer customers special EV rate plans and rebates that fund charging infrastructure and electrical upgrades.

“Each incentive type serves a different purpose. Fleets should evaluate opportunities to stack incentives, where permitted, to maximize project economics,” advises Dominique Follico, Director of Incentives Strategy and Compliance at ZM Trucks.

The Incentive Windfall

The level of funding incentives provide will vary by program, but some can be sizeable, and savings can be immediate.

Voucher programs are typically applied directly to the sales order as a discount, immediately reducing out-of-pocket expense at the time of purchase. Reimbursements, however, require fleets to purchase EVs first, then wait for compensation.

“State-level voucher programs like CCFR, HVIP, NYTVIP, TERP can significantly reduce the upfront cost of electric vehicles,” Follico said. “The ZM8 Series — ZM Trucks' Class 5/6 zero-emission truck assembled in Fontana, California — is currently eligible for California's HVIP voucher program, with vouchers of up to $60,000 for Class 5 and up to $85,000 for Class 6 configurations applied directly at the point of sale.”

Ontario International Airport Authority is a prime example of how incentives can make EV acquisitions possible. A San Bernardino County grant offset the entire cost of the agency’s ZM8 BEV order, making the transition to zero-emission operations financially viable.

Incentives offered through utilities, state agencies, and grant programs help with the costs of charging infrastructure, which is often one of the largest barriers to fleet electrification. These programs help offset charging equipment, installation, and site upgrade costs.

Electrification Incentive Dos and Don’ts

Follico offers the following Dos and Don’ts to fleets interested in seeking electrification incentives:

Do:

• Start planning early.
• Verify eligibility requirements before ordering vehicles.
• Engage utilities early in the process.
• Maintain thorough documentation.
• Understand incentive stacking opportunities and restrictions.
• Work with experienced incentive specialists who can help identify funding opportunities and avoid common application mistakes.

Don’t:

• Assume incentives can be combined without restrictions.
• Purchase vehicles before confirming eligibility.
• Underestimate charging infrastructure timelines
• Wait until funding opportunities open before beginning project planning.

However, Follico’s biggest advice for fleets is to act now. “Just because EV incentive programs currently exist doesn’t mean they’ll be around forever. We’ve seen agencies pull incentive programs because they assume they’ve been offered long enough and fleets are no longer interested,” she said. “Fleets should take advantage of the money currently available. If you can get 90% of your truck funded, why not do it now?”

Is Applying Worth the Time?

While it’s true that finding and applying for electrification incentives does take time, Follico says it’s well worth it.

“The return on a fleet’s time investment can be substantial. For medium- and heavy-duty electric vehicles, incentives can offset tens of thousands — and in some cases over one hundred thousand dollars — per vehicle,” she said. “Spending time to identify and qualify for incentives can significantly improve project economics, reduce capital expenditures, accelerate deployment timelines, and increase the overall financial viability of fleet electrification projects.”

Follico also notes that for many fleets, incentives can be the deciding factor between moving forward with electrification today or postponing deployment until a later date.

“Ontario International Airport Authority's acquisition of a ZM8 is a direct example: grant funding turned a capital-intensive decision into an accessible one, allowing OIAA to move forward with zero-emission operations now rather than later,” she said.

Find the Right Funding for Your Fleet

ZM Trucks offers fleets free advice on how to take advantage of electrification incentives. Reach out for help finding the right incentives for your fleet at zmtrucks.us.