A California incentive program for zero-emission trucks that depleted $63 million of funding in nine minutes last year is set to reopen next week, and officials are hopeful the money will last longer this time.

The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) will open at 10 a.m. on March 30, with $430 million in funding available.

The funding includes $196.6 million for standard requests, plus funds set aside for specific categories: $65.5 million for public transit buses; $46 million for class 8 drayage trucks; and $122 million for public school bus funding in small and medium air districts.

Last year, vehicle buyers quickly snapped up incentives offered through HVIP, a program that the California Air Resources Board (CARB) launched in 2009.

In the first wave of HVIP funding for 2021, which opened in June 2021, all $84 million in incentives were requested within three hours. A second wave of funding in August offered $12 million in incentives. In the third and final wave of funding for 2021 in October, HVIP offered $63 million in incentives and all the money was requested within nine minutes.

Pent-up Demand

During a CARB workshop on Thursday, agency staff said “pent-up demand” for the incentives caused by a period of limited funding contributed to last year’s rapid depletion. With more funding this year, along with policy changes such as reduced incentive amounts and a limit on the annual number of incentives per fleet, CARB is hopeful the money will last longer.

“We have the most robust budget we’ve ever seen for the HVIP program,” Andrea Morgan of CARB’s Mobile Source Control Division said. “And we think that a number of the policy changes that we put into effect in previous years will also help with demand. So we’re optimistic that the funds will last longer throughout the year, if not the entire year.”

And CARB is considering another restriction on HVIP eligibility: a fleet-size limit of 100 vehicles or fewer starting in 2023, falling to 50 vehicles or fewer in 2024.

At least one workshop participant opposed the fleet-size limit.

“We are very concerned about the categorical exclusion of the large fleets from the program … given what we see as the really important role they play in driving scale and gaining experience with [zero-emission vehicles],” said Andrew Schwartz, senior managing policy adviser for Tesla (NASDAQ:TSLA). “We really see them as very critical early movers.”

As an alternative, Schwartz suggested setting aside incentive money specifically for smaller fleets, while still allowing larger fleets to apply for the main pool of funding.

Range of Incentives

Since its inception in 2009, the HVIP program has issued 9,200 incentive vouchers totaling $604 million. More than 140 makes and models of zero-emission vehicles from 35 manufacturers are currently eligible for incentives, according to CARB.

Incentives vary based on the type and model of zero-emission vehicle. For example, incentives range from $45,000 to $85,000 for shuttle buses; from $85,000 to $198,000 for school buses; and from $85,000 to $120,000 for garbage trucks.

Last week’s workshop focused on CARB’s fiscal year 2022/23 funding plan for clean transportation incentive programs, including HVIP. Development of the funding plan is just getting started, and CARB has scheduled a series of meetings on different incentive programs.

A March 22 workgroup meeting will include a discussion of fleet-size limits in the HVIP program, CARB staff said. And during a yet-to-be scheduled workshop in May, results from this month’s HVIP funding wave will be discussed.

In addition to the funding wave opening on March 30, CARB is launching a new “innovative small e-fleets” pilot program within HVIP. The program is expected to open by early summer with $25 million in funds. The program is intended to help small trucking fleets and independent owner-operators with mechanisms such as flexible leases or peer-to-peer truck sharing.

CARB hosted a work group meeting on the program on March 3.