HVIP FY22-23 Policy Changes and Funding

Over $1.7 billion in incentives approved to support zero-emission trucks and buses.

On November 17, 2022, the California Air Resources Board approved the FY22-23 Funding Plan for Clean Transportation Incentives, which includes policy changes and an allocation of over $1.7 billion to be administered by the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP).

HVIP’s Funding Allocation

• HVIP Standard: $265 million
• Zero-Emission Public Transit Buses: $70 million
• Zero-Emission Public School Buses (through the existing Public School Bus Set Aside): $135 million
• Zero-Emission Drayage Trucks: $157 million
• Innovative Small E-Fleets: $35 million
• Local Education Agency School Bus Replacement Grants: $1.125 billion, to be awarded in $225 million increments between FY23-24 and FY27-28.

These funds add to the funding that still remains at californiahvip.org/funding. Incentives are still AVAILABLE NOW for all vehicle types.

The Funding Plan outlines the following adopted policy changes for HVIP:   

• Effective Nov. 18, 2022 
  • As part of CARB’s Refuse Reimagined initiative, a voucher enhancement of 25% is applied to HVIP eligible refuse vehicles used for solid waste collection starting November 18, 2022. This increased incentive amount is available until Dec. 31, 2023.  
  • The existing Drayage Truck Early Adopter 25% voucher enhancement is also extended until Dec. 31, 2023.  
  • ePTO: new $50,000 incentive level for storage capacity of greater than 25 kilowatt hours. Also, ePTO systems will now be allowed to fund up to 65% of the total incremental cost. 
     

• Effective Jan. 1., 2023  
  • Flexibility for small fleets to stack incentives: Fleets with 10 vehicles or fewer can stack HVIP with other state incentive programs, if the other program allows stacking, each incentive program is not paying for the same incremental cost, and the non-HVIP incentive program is not required to generate greenhouse gas emission reductions.    
  • Modifications to the manufacturer rolling soft cap: Requests from fleets with 10 vehicles or fewer are exempt from the existing manufacturer rolling soft cap limit. Also, manufacturers are exempt from the cap if they maintain an average voucher redemption rate of at least 50 vouchers over a 6-month period or 100 vouchers over a 12-month period starting January 1, 2023.  
  • Compliance with labor standards: Fleets purchasing drayage and short-haul trucks will be required to directly attest that they are in compliance with state labor laws, that they will remain in compliance with labor laws for up to at least three years or the duration of the incentive agreement, and that they will retain direct control over the manner and means for performance of any individual using or driving the vehicle.    
  • Reserve for medium and small private fleets and public fleets: Initially, 70% of FY22-23 HVIP standard and drayage set-aside funding will be reserved for private fleets with 100 vehicles or fewer and all public fleets. If more than $100 million remains in the reserve on July 1, 2023, HVIP will release 30% of the remaining funding to private fleets with more than 100 vehicles. If funding remains in the reserve on November 1, 2023, HVIP will open all remaining HVIP standard funding and drayage set-aside funding to private fleets with more than 100 vehicles. The reserve only applies to the FY22-23 allocation– any remaining FY21-22 funds will be available for fleets of all sizes. 
  • Bulk vehicle purchase requirement for fleets with more than 500 vehicles: * Private fleets with more than 500 medium- and heavy-duty vehicles will only be allowed to access HVIP funding if they demonstrate that they are purchasing ZEVs in bulk. These fleets must present a purchase order for at least 30 HVIP eligible vehicles, and the HVIP incentive will be applied only for vehicles purchased above 30. The existing fleet voucher request limit of 30 voucher per fleet per year (50 vouchers for drayage trucks) continues to apply, regardless of the size of the bulk order. HVIP funding for fleets with more than 500 vehicles may only be applied to vehicles domiciled in disadvantaged communities. Bulk purchases are not required for fuel cell vehicles until they achieve greater market penetration.  
  • Voucher amount adjustments based on fleet size:*  

*The FY22-23 Implementation Manual is anticipated to be released in spring 2023 with more information about these changes. While fleets may submit voucher requests to reserve their place in line prior to the release of the updated Implementation Manual, it is important to note that the policy changes adopted in the Funding Plan will apply to any voucher request submitted after Nov. 17, 2022 (the date of the Funding Plan’s adoption), unless otherwise noted, and staff may modify or cancel voucher requests if they are found to not comply with the new requirements. Per the adopted funding plan, the Fleet Size Voucher Amount Adjustments and Bulk Purchase Requirements will be applied to voucher requests submitted on or after January 1, 2023. CARB anticipates that voucher requests from large fleets will not progress to the status of “Funded” in the online Voucher Processing center until on or after April 3, to allow for the release of a new Implementation Manual, dealer training, and necessary system updates. CARB will discuss these changes and proposed updates to the Implementation Manual at a future public work group meeting.  

• More information about Dealer Training, the Implementation Manual, as well as set-aside funds for Innovative Small E-Fleets, Local Educational Agency School Bus Replacement Grants, and the Public School Bus Set-Aside will be provided in early 2023, including public engagement opportunities. Please see the Funding Plan for more details, and visit CARB’s Low Carbon Transportation Program for upcoming events. 

Changes for 2024: 

• Fleet size limits that disallow participation by fleets larger than 50 are delayed until January 1, 2024 in order to allow larger fleets an additional year to access incentives prior to Advanced Clean Fleets regulatory requirements. 
• A requirement for Vehicle-to-Grid functionality on all battery electric school buses will begin for new vehicle eligibility applications submitted to CARB on January 1, 2024.  

To see where nearly 2,000 ZEVs are on the road today in California communities, including those funded by CARB, explore the new ZEV Population Dashboard. 

For more HVIP information and the latest updates, please visit californiahvip.org.  

Published November 18, 2022