The New Jersey Economic Development Agency (EDA) is adding $9.25 million to a pilot program that provides incentives of up to $100,000 toward the purchase of medium- and heavy-duty (MHD) electric vehicles after eager applicants exhausted the program’s initial $15 million fund in a matter of months.
The EDA is also expanding the program, known as New Jersey Zero Emission Incentive Program (NJ ZIP), which started with a focus on encouraging electric truck adoption in Camden in South Jersey and Newark in North Jersey. The program will now be open to New Brunswick and 33 surrounding communities in Central Jersey.
The expansion offers a glimpse into the market dynamics unfolding as New Jersey, like other states, seeks to persuade drivers — in this case, truck drivers — to get behind the wheel of an electric vehicle. The EDA said it had received 38 applications for a total of 148 vehicles in the first phase of the program, which began accepting applications on April. 6.
So far, the agency has approved 17 projects totaling 66 vehicles, purchased with vouchers worth $6.76 million; the remaining applications are pending, the agency said. The first vehicles purchased under the program are expected to hit New Jersey streets in December, the EDA said.
Most of the trucks receiving the incentives are for deliveries, according to the EDA, with a slight majority of applicants going for larger trucks, around the Class 5 or 6 size, which are considered medium-duty, commercial vehicles. The reason: not as many smaller, pickup trucks — Class 2b — are available, and purchasers of larger trucks can get a bigger incentive, the agency said.
Two manufacturers that are supplying vehicles to the buyers said the main market driver behind the applicants’ shift to electric trucks is their intended use for deliveries from a transportation or distribution hub to the final destination, often the customer’s residence, if it is an e-commerce delivery.
“What we’ve seen in Jersey is a huge demand for mid-mile, last-mile delivery solutions,” said Ryne Shetterly, vice president of sales and marketing for GreenPower Motor Company. The California-based electric truck maker is supplying nine vehicles for four NJ ZIP customers, who together will receive incentives totaling $890,000.
“Most of the business that we’ve written out there has been for the cargo vehicles, box trucks, things of that nature,” Shetterly said.
Persuading Truck Buyers to Try EVs
The NJ ZIP vouchers start at $25,000 for a Class 2b truck and then go up to $100,000 for a Class 6 truck. In the first phase of the program, those incentives were used to fund the purchase of zero-emission trucks within 10 miles of Newark and Camden. Incentive bonuses are also available. For example, a small business that scraps a gas-powered vehicle and replaces it with an electric truck can get $2,000 more per vehicle. For women-, minority- and veteran-owned business, bonus incentives are an additional $4,000 per vehicle.
The program is funded with money from New Jersey’s participation in the Regional Greenhouse Gas Initiative (RGGI). To be eligible for the incentives, an electric truck must be registered in New Jersey for three years, and 75% of the miles covered annually must be within the state, according to program rules.
In the first phase, the vehicles had to either have a home base in or around Newark or Camden or travel 50% of their vehicle miles in the area around the two cities. Both areas are considered environmental justice communities due to severe emissions from truck traffic around both cities. In the second phase, eligibility will be extended to New Brunswick and the Central Jersey region.
The incentives are designed to persuade potential truck buyers to go electric by covering the added cost of an electric vehicle over a traditional gas or diesel vehicle, said Victoria Carey, senior project officer, clean energy for EDA.
Similar EV voucher programs had proven successful at putting drivers in electric trucks in California and New York; it was no surprise that applicants exhausted the funds in New Jersey’s program in five month, she said.
“I think that there’s a lot of hunger for this type of” program, she said. “We worked really hard to make sure that we would have a positive uptake.”
The Newark area, the state’s largest city, which is also located next to the Port of New York and New Jersey, accounted for almost twice as many applications as Camden, Carey said. No decision has been made on whether to make the program permanent; the pilot’s goal is to provide the agency with enough information to make that determination, she said.
Among the recipients of the first wave of incentive awards are Marcelli Formaggi, a Clifton importer of Italian foods, which bought one truck; and Juan Kelmy Productions, a Union City photography and video production company that bought two trucks. Bergen County also received incentives totaling $850,000 to buy 10 senior citizen shuttles.
Peerless Beverage Co., a Union, N.J., beer distributor bought two Class 5 trucks, a 2021 Hino M5 model, made by Sea Electric, another California-based electric vehicle manufacturer, said Benjamin Nussbaum, the company’s regional sales manager for New Jersey.
The NJ ZIP incentive of $170,000 for both trucks paid just over half the $165,000 cost of each vehicle, he said. The company will fit the trucks with sliding doors used for beer distribution and expects each one to do around 120 miles a day, well below the 175-mile range of the vehicle, Nussbaum said.
“They are going to be doing short-haul deliveries in the Jersey City and greater Newark area, delivering beer to bars,” he said.
Shetterly called the New Jersey program “the most comprehensive, lucrative program for users who are looking to be early adopters” of electric trucks.
“We have more inbound calls coming in from New Jersey right now than everywhere else in the country,” he said.
Stop, Start – Short Range Trips
The program is one of several that offer incentives to help the state reach its goal of reducing greenhouse gas emissions 80% below 2006 levels by 2050. Tackling transportation emissions will be critical since they constitute 42% of GHG emissions statewide. The state’s master plan, released in 2019, assumes that 75% of medium-duty trucks and 50% of heavy-duty trucks will be electric by 2050.
Truckers in New Jersey, like those around the nation, cite the lack of MHD charging sites as a key obstacle to greater use of electric trucks. Other barriers include the short range of existing electric trucks — larger trucks can do only up to around 250 miles — and the high cost of the vehicles.
Tony Fairweather, CEO and founder of Sea Electric, said the range issue is less important for the trucks the company is selling in New Jersey. Six companies will be receiving a total of 32 trucks from Sea Electric, resulting in incentives totaling just under $3.4 million.
“It’s all last-mile delivery, so the typical application is [a driver] doing somewhere between 70 and 130 miles on a daily basis — start, stop, around town; 12-hour operation. Return to a depot at night and plug into a Level 2 charger to charge back to 100% overnight, and then to do it over again.”
Shetterly said that GreenPower is focusing its marketing efforts in urban areas, such as New York City and Jersey City, where the range issue is largely irrelevant. In those areas, a truck can work eight to 10 hours a day and still only go 50 miles, he said.
“In our vehicles, that would use about a third of the battery pack,” he said. Some customers top up a vehicle through “opportunity charges,” stopping for 10 to 15 minutes to use a DC fast charger, he said.
In the long term, electric truck users could expect to see a 60% to 70% reduction in operating costs, mainly due to cheaper fuel, Shetterly said.
“Whether it’s regenerative braking, transmission services, or lack thereof, no oil changes, almost zero motor maintenance — that’s where you’re going to get that 60 to 70%,” he said. “For a small business owner, this is going to be a godsend.”
