Broad Coalition Calls on Congress to Act on President Biden’s Fiscal Year 2022 Proposal for Zero-Emission Medium- and Heavy-Duty Vehicle Tax Incentive with Cash Payment Option

Direct Pay Option Could Support Over 478,000 Clean Trucks Nationwide by 2030

PASADENA, CA, June 17, 2021 — More than 60 organizations ranging from commercial vehicle stakeholders to utilities and non-profits to industry associations wrote to call on the House Committee on Ways & Means and Senate Committee on Finance to act on the Biden-Harris Administration’s Fiscal Year 22 Budget Request proposal for the creation of a new zero-emission medium- and heavy-duty vehicle tax incentive with a direct pay option. This option is the most aggressive federal policy proposed yet to advance the purchase of clean trucks and is projected to be more effective for encouraging zero-emission truck adoption than a typical tax credit. The incentive can be claimed closer to the point of purchase, more readily encouraging fleets’ purchase of zero-emission trucks; and can be claimed by fleets of all sizes, in particular smaller fleets with fewer capital resources who represent the vast majority of the U.S. on-road commercial fleet.

The full text of the letter and list of signatories are below:

The Honorable Richard Neal, Chairman
Committee on Ways & Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington D.C. 20515
The Honorable Ron Wyden, Chairman
Committee on Finance
United States Senate
219 Dirksen Senate Office Building
Washington, D.C. 20510
The Honorable Kevin Brady, Ranking Member
Committee on Ways & Means
U.S. House of Representatives
1139 Longworth House Office Building
Washington D.C. 20515
The Honorable Mike Crapo, Ranking Member
Committee on Finance
United States Senate
219 Dirksen Senate Office Building
Washington, D.C. 20510

The undersigned organizations write to thank you for your leadership in advancing zero-emissions transportation incentives this Congress in support of the Biden-Harris Administration’s American Jobs Plan. The Plan calls for unprecedented investment in the manufacture, charging and refueling, and purchase of zero-emission or electric vehicles (EVs). Collectively these investments help advance a clean energy economy that promotes American manufacturing competitiveness, addresses racial inequities from transportation sector air pollution, and combats the climate crisis. As the Committee considers clean transportation tax incentives and stimulus investments this Congress, we urge you to incorporate the proposal in the President’s Fiscal Year 2022 Budget Request for a new zero-emission medium- and heavy-duty vehicle (MHDV) tax incentive, with the option for the taxpayer to elect a cash payment in-lieu of the credit (i.e. a direct pay option).

The American Jobs Plan lays the groundwork for the creation of critical purchase incentives for zero-emission MHDVs. The FY22 Budget Request furthers this goal by calling for new zero-emission MHDV investment tax credits with a direct pay option. As you are aware, the proposed credits would range from $25,000 for purchases of Class 3 vehicles to $120,000 for Class 8 vehicles, starting in 2022 and stepping down according to class through 2027. The credits would also be paired with strong labor standards to encourage good-paying and good-quality jobs. We encourage the Committee to make these zero-emission truck purchase incentives for fleets of all sizes an integral part of the United States’ proposed investment in EV tax incentives.

The approach of combining an investment tax credit with the short-term ability to quickly obtain the cash equivalent benefit as a cash payment in-lieu of credit, utilized in the American Recovery and Reinvestment Act of 2009, was proven to be an extremely effective and successful mechanism to stimulate the desired clean technology investments.

The significant upfront incremental cost difference of zero-emission trucks and buses, which are still in the early stages of commercialization, is a key barrier to commercial fleet electrification in goods and people movement. The most effective state zero-emission MHDV incentives offer rebates that in practice provide cash payments to offset this incremental cost and higher purchase price close to the time of purchase. Tailoring a tax incentive amount to offset a large portion of the incremental cost with the option to monetize the credit, as the FY22 Budget proposal does, will help aggressively knock down this barrier to deployment. In addition, most U.S. fleets operate six or fewer trucks and are unable to overcome the upfront incremental cost barrier to purchasing cleaner trucks. A cash payment in-lieu of credit would directly benefit these smaller fleets with fewer capital resources.

An analysis conducted by the nonprofit organization CALSTART of a 10-year zero-emission truck tax incentive, made available through a cash payment, for Class 3 through 8 vehicles was projected to support over 478,000 clean trucks and buses deployed nationwide, avoid emissions equivalent to taking 5.4 million cars off the road, and support 55,000 direct and indirect jobs over the incentive’s lifetime.

High-tech zero-emission trucks are in development or early production in most weight classes right now. Zero-emission MHDV product offerings in North America are on track to more than double by the end of 2023. The rising growth of e-commerce, compounded due to the COVID-19 pandemic, means electric delivery vans and trucks will quickly have an outsized role to play in our Nation’s economic recovery because of substantial increases in goods delivery in local-, regional-, and long-haul freight movement segments.

Zero-emission MHDVs also present a significant opportunity to make stimulus investments that both boost this important industry and support economic growth, but also help clean the air of frontline communities and address climate change. Medium- and heavy-duty vehicles represent a small share of all vehicles on U.S. roads but reflect a high level of the Nation’s daily vehicle use in support of critical goods movement. As a result, they contribute to a disproportionate fraction of total transportation sector fuel consumption, greenhouse gas emissions, and air pollution. Decarbonizing these trucks will support the Administration’s goal to invest in environmental justice communities through smart EV investments, with the potential to directly benefit the communities adjacent to where MHDVs often operate or are domiciled.

As the Committee works to balance EV investment priorities, we would welcome the opportunity to work with you to advance clean transportation tax legislation this Congress that includes zero-emission MHDV incentives redeemable as a cash payment in-lieu of tax credit. These incentives would help drive aggressive clean truck deployments by the middle of the decade, bend down the curve on MHDV transportation emissions as quickly as possible, and support the clean truck and bus supply chain and its workforce. Thank you for your consideration.


American Council for an Energy-Efficient Economy (ACEEE)
Anaheim Transportation Network
Arrival Automotive, USA
Bollinger Motors
California Electric Transportation Coalition (CalETC)
California Hydrogen Business Council
Chanje Energy
Climate Resolve
ClipperCreek, Inc.
Colorado Cleantech Industries Association (CCIA)
Conservation Law Foundation
Dream Corps Green For All
DTE Energy
Edison International
Effenco Development Inc.
Elders Climate Action
Elected Officials to Protect America
Electric Transportation Community Development Corporation (ETcommunity)
Electriphi Inc
Environmental Defense Fund
Fontaine Modification
Hyzon Motors
ITS America
Kalmar Solutions LLC
Lightning eMotors
Lion Electric
Motiv Power Systems, Inc.
NAFA Fleet Management Association
National Association of State Energy Officials
National Grid
Navistar, Inc.
Nikola Corporation
Odyne Systems, LLC
Paired Power, Inc.
Phoenix Motorcars
Plug In America
Roush CleanTech
San Diego Gas & Electric (SDG&E)
Sierra Club
Stark Area Regional Transit Authority
Union of Concerned Scientists
Veloce Energy
Voices for Progress
Volvo Group North America
Xos Trucks

Cc: The Honorable Nancy Pelosi, Speaker of the House, U.S. House of Representatives
The Honorable Kevin McCarthy, Minority Leader, U.S. House of Representatives
The Honorable Charles E. Schumer, Majority Leader, United States Senate
The Honorable Mitch McConnell, Minority Leader, United States Senate