New Jersey is for the first time offering incentives for the purchase of electric heavy-duty trucks and has committed $46.6 million to expand a two-year-old program that has already funded the purchase of nearly 150 light- and medium-duty trucks with Regional Greenhouse Gas Initiative funds.
The New Jersey Economic Development Authority (NJEDA) on July 13 approved the funding for the second phase of the New Jersey Zero Emission Incentive Program (NJ ZIP), in an expansion that would also increase the geographic area in which incentives are available.
Initially, the program only funded the purchase of trucks to be based in or around Newark in northern Jersey, and Camden, in the south. The EDA later expanded the program to include Central Jersey and the Jersey Shore. Under the latest phase, EDA will provide incentives for the purchase of electric trucks to be used anywhere in the state.
Tim Sullivan, NJ EDA | © RTO Insider LLCThe strong demand in the first phase, in a relatively limited area of the state, drove the decision to open a second phase, agency CEO Tim Sullivan said at a press conference Monday in Lyndhurst, to tout the expansion of the program.
“Hopefully, finally, lots of small businesses are thinking about what’s next and how they make the long-term capital upgrades to get ahead of, not just rising gas prices, but long-term energy costs,” Sullivan said. He sees the high interest in the program as reflecting a mindset of “how you participate in the green and clean economy.”
NJ ZIP at present awards vouchers for electric truck purchases, starting with $25,000 for a Class 2B truck up to $100,000 for a Class 6 truck. The incentives are designed to encourage potential truck buyers to go electric by covering the added cost of an electric vehicle over a traditional gas- or diesel-powered vehicle.
The second phase incentives, set at $20,000 for a Class 2b truck and $90,000 for a Class 6 truck, will cover 75% to 110% of the extra cost of an electric vehicle, Sullivan said in a memo to the board outlining the expansion. The new program also adds incentives of $135,000 for a Class 7 truck and $175,000 for a Class 8 truck.
The EDA expects the program to be up and running by the end of the year, and it will continue until the funds are exhausted, which Sullivan expects to be about the middle of 2023. The agency’s goal is to follow the first and second phases, both pilot programs, with a permanent program if the funding is available.
Chance to Go Green
The generous incentive package, and the chance to make good on their commitment to creating a greener world, persuaded ENAT Transportation and Logistics of Ridgefield Park to submit an application last year, said Vanessa Abad, the company’s executive administrator. She co-founded ENAT with her husband Luis Abad, the company CEO, and his brother Ernesto Abad, the company logistics manager.
“We really are green people, so we like going green. We like recycling; we like to make sure we’re not wasting food.” Vanessa Abad said. “So, we thought this was a good opportunity for our business to go green.”
ENAT, a contract delivery company, applied for incentives to purchase four Class 4 trucks ― a 2021 EV Star Cargo Plus box truck and three 2022 EV Star Cargo vans, all manufactured by GreenPower Motor ― to add to their four diesel trucks. The vehicles were the real stars of the press conference, and the Abads expect to use them for deliveries of about 30 to 40 miles in distance, with recharging every couple of days.
The trucks have also spurred the Abads to go even greener by installing a charger and solar panels at their home, where the trucks will be charged.
Because the company is minority- and woman-owned — the Abads are immigrants from Ecuador — it qualified for one of the highest incentive levels, Vanessa Abad said. She estimated that the company paid about $12,000 of the total $115,000 purchase price for the vans. Luis Abad said a similar diesel vehicle would cost about $70,000, and he anticipates that the electric trucks will also cut his fuel costs, which used to be about $80 a tank and are now about $140 due to the rise in diesel prices.
Moises Luque, CEO at transportation company Supreme Green Team, of East Brunswick, said the financial package persuaded him to apply for six vehicles under NJ ZIP. He has been approved for three 22-foot vans and three 26-foot vans that will be used to move freight to and from warehouses, he said, adding that he will pay about $13,000 for each of the vans, which cost about $110,000.
“The numbers are the first things that attract you,” Luque said. “You know that you’re going to get an incentive that’s going to pay for about 80% of your vehicle.”
He also is planning to start a charging hub that will be open to the public because, “there’s no charging stations for vehicles this size here in the state of New Jersey,” he said, speaking at the EDA conference.
Moving to Heavy-duty Trucks
In line with the New Jersey Energy Master Plan, the EDA is seeking to transition 75% of the state’s medium-duty trucks and half of the heavy-duty trucks to EVs by 2050.
“The state has ambitious goals,” Sullivan said in his memo, which called the incentive program “a critical step in this direction to support the ZEV marketplace and rapidly deploy electric MHDVs on the road.”
Victoria Carey, NJ EDA | © RTO Insider LLCHeavy-duty trucks had always been a target for the program, said Victoria Carey, EDA’s clean energy manager, who oversees the NJ ZIP program.
“The vast majority of the demand, and pollutants, come from the heavy-duty sector,” she said. But the agency wanted the first phase of the program to be up and running quickly, and the lengthy delivery time for heavy-duty trucks would hinder that, she said. The EDA has also heard strong stakeholder demand for electric buses, which are included in the program’s heavy-duty truck category, as well as demand from large trucking fleets, whose “hub and spoke” delivery systems require trucks to go relatively short distances and are not restricted by the limited range of some electric trucks.
“We have the port right here; there’s just so much density to go from the port to the warehouse, out and back,” Carey said. “New Jersey, because of our density, is set up really well for the heavy-duty vehicle space.”
The change enables the program to target a heavy-duty trucking sector that has been slow to embrace large EV trucks. A recent report from CALSTART, a national nonprofit focused on clean transportation technologies, found that 65 medium- and heavy-duty electric trucks are deployed in New Jersey, a state that has 567,000 registered trucks of all sizes.
Few vehicles in the state’s electric trucking fleet are heavy-duty vehicles, according to trucking sources, and many of them are light- to medium-duty trucks purchased through the NJ ZIP program. At the Port of New York and New Jersey, the electric truck fleet consists mainly of yard tractors, which move containers inside port terminals and inside the port. (See Port of NY-NJ Unveils Fleet of 10 EV Trucks.)
Trucker Concerns
Truckers in New Jersey, like those around the nation, cite the lack of heavy-duty charging sites as a key obstacle to greater use of electric trucks. Other barriers cited by truckers in the past include the limited number of truck models available, the short range of existing electric trucks — which for larger trucks is about up to 250 miles — and the high cost of the vehicles. Their use at the port is also complicated by the fact many truckers are independent owner-operators with few resources for clean energy investment, according to the Port Authority of New York and New Jersey. (See Port NY-NJ Cites ‘Hurdles’ to Employing EV Trucks.)
But the CALSTART report said that nationwide the deployment of electric trucks of all sizes is growing, with a 155% increase in sales in 2021 over the previous year. And several studies have predicted that, in time, electric trucks will be more cost effective than diesel trucks. A report released in October by the Natural Resources Defense Council (NRDC) projected that an average medium- or heavy-duty electric truck purchased in New Jersey in 2040 will cost $25,000 less over its lifetime than a comparable diesel vehicle, due to reduced fuel and maintenance costs. (See NRDC Report Predicts a Decline in NJ’s EV Truck Costs.)
In New Jersey, sales could be boosted by the New Jersey’s Department of Environmental Protection’s adoption in December of California’s Advanced Clean Truck regulations, which require truck manufacturers to meet increasing electric vehicle sales targets. (See NJ Adopts EV Truck Sales Mandate.)
Sullivan’s memo said the NJ ZIP program, which began in 2021 and works on a first-come, first-served basis, has so far drawn 228 purchaser applications, totaling $43.6 million. Of these the EDA has approved 144, totaling $32.2 million.
The memo also said 90% of the program applicants are small businesses and 57% are either minority or women owned.
Carey said the program to date has funded the purchase of all sizes of trucks, but Class 4 vans for deliveries have been popular, as have Class 6 box trucks, which have so far commanded the highest incentives. The program has also funded the purchase of many passenger shuttles by the Atlantic City Jitney Association, an association of shuttle bus operators, she said.