A Self-financing Zero Emission Truck Incentive Program

ITS-Davis has analyzed the design of self-financing zero emission truck (ZET) incentive programs that could help the current underfunded Clean Truck and Bus Voucher Program (HVIP) and continue to provide certainty for fleet buyers to transition, given the recently withdrawn Advanced Clean Fleet (ACF) regulation for trucks. The revenues are generated by either imposing a one-time pollution charge on the price of new diesel truck sales or a recurring annual surcharge to annual registration fees, with the revenues used to incentivize ZET sales. For instance, if a one-time charge of 6.8% is imposed on new diesel truck sales, or an annual polluter charge was imposed on diesel trucks ranging from $290 to $820 per truck, depending on the type of truck, about $3.4 billion would be generated over 10 years. On an annual basis, this would roughly be equivalent to the average funding level of $340 million per year from 2021 to 2024 of the current HVIP incentive program. Such a program would harness market forces by sending a clear signal to truck buyers and manufacturers, and would generate revenue for incentive funds for ZETs, with no cost to government or taxpayers. The charges would be administratively straightforward to collect. As a one-time charge, it could be collected at the time of vehicle purchase. Alternatively, as an annual charge, it could be assessed as part of the annual registration and renewal fee, known as the Commercial Vehicle Registration (CVRA) fee.