Heavy Duty Electric Trucks May Be Eligible For $40,000 Federal Incentive

According to several reports, the Inflation Reduction Act introduced in the Senate this week will include a sizable federal incentive for the purchase of heavy duty electric trucks that weigh more than 14,000 pounds. That would include electric tractors from Tesla, Freightliner, BYD, Mercedes, and Lion, electric school buses, electric transit buses, as well as fire engines, trash trucks, and all the other diesel-powered workhorses that keep America on the move. The incentive is limited to 30% of the purchase price or $40,000, whichever is less.

We have to add a disclaimer here. What follows assumes the Inflation Reduction Act now pending in Congress actually passes and gets signed into law by the president. There’s many a slip twixt the cup and the lip and the pressure to add things or delete things will be intense. Right now this very minute, every member of Congress is putting forth a laundry list of changes they would like to see, changes that will get transformed this legislation into what is referred to as a “Christmas tree” bill — one so loaded down with gifts, ornaments, carve-outs, and special provisions that it bears little resemblance to the original.

State Incentives For Electric Trucks

Believe it or not, as significant as the new federal incentive might be, some states have substantial incentive programs for heavy duty electric vehicles of their own. California’s Heavy Vehicle Incentive Program provides up to $120,000 for purchasers of heavy duty electric trucks. At the present time, 8 electric tractors are eligible for the state funded rebates, including trucks from BYD, Lion, Freightliner, Nikola, and others. The Tesla Semi would join that group, when and if it ever goes into production.

The California program puts some significant money into electric school buses as well, with the maximum benefit capped at a whopping $375,000 for some models. There are similar incentives for step vans, utility trucks, straight trucks, ambulances, and passenger shuttle vehicles as well.

The Takeaway

Between the federal government and various state incentives, there is some considerable cash available to buyers of heavy duty electric trucks, which raises this question: How much do manufacturers raise prices to, in effect, direct some of that rebate money into their corporate coffers? One Twitter user has came right out and suggested that Tesla is likely to raise the price of its Semi if the federal incentive plan becomes law. He’s probably right, even though doing so blunts the actual purpose of the incentives.

There’s not much any of us can do about that. The good news is that lots of diesel-powered heavy trucks are going to be retired as a result of the available incentives. Between those purchase inducements and the sharply lower costs of operation, going electric is a no-brainer for fleet operators. Now if the Democrats can just push that Christmas tree across the finish line…


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