PASADENA, CA, August 31, 2021 — The United States Congress is in the final stages of creating a once-in-a-generation investment in the manufacture, charging, and refueling, and purchase of zero-emission commercial vehicles including a new zero-emission medium- and heavy-duty vehicle (MHDV) tax incentive. To best ensure these investments result in actual clean trucks on the road, a broad industry and environmental coalition calls on Congress to include the option for truck buyers to receive a cash payment in lieu of the credit (i.e., a direct pay option) in in the final budget package.
Organizations ranging from commercial vehicle manufacturers and fleets to utilities and non-profits to industry associations are calling for this critical mechanism to help American fleets purchase and U.S. companies sell zero-emission trucks that will create jobs and clean the air in the most impacted communities. The Biden Administration has also called for this option to be included in its budget plan.
“Navistar is investing significantly in zero-emission trucks and is launching its first-production electric vehicles. But leadership from the federal government is needed to transition the adoption of this new technology. Fleets – especially smaller ones – need direct purchase incentives to help defray high technology costs to serve as early adopters,” said Gary Horvat, vice president of Navistar NEXT E-Mobility.
“Volvo Group North America is building zero-emission trucks now. However, fleets cannot afford their significantly higher prices and the risk of investing in a completely new technology. To help fleets adopt now, we urgently need federal incentives. A point-of-sale incentive that cuts the price of the vehicle right when a fleet makes its purchase is the best tool to build this industry. We’ve seen it proven in key states; it’s needed nationally,” said Dawn Fenton, vice president of Government Relations and Public Affairs, Volvo Group North America.
CALSTART’s analysis of a 10-year zero-emission truck tax incentive made available through a cash payment projected deployment of 478,000 clean trucks and buses nationwide and calculated avoided emissions equivalent to taking 5.4 million cars off the road. This would support 55,000 direct and indirect jobs over the incentive’s lifetime. These outcomes all exceed what a tax credit without direct pay would accomplish.
The high upfront cost difference of zero-emission trucks and buses is a barrier to commercial fleet electrification in goods and people movement. The most effective state zero-emission incentives provide cash payments to offset this cost at the time of purchase. 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 and drive faster and deeper adoption of zero-emission commercial vehicles.
A national nonprofit consortium with offices in New York, Michigan, Colorado and California and partners world-wide, CALSTART works with 280+ member company and agency innovators to build a prosperous, efficient, and clean high-tech transportation industry. We overcome barriers to modernization and the adoption of clean vehicles. CALSTART is changing transportation for good.