Every day electric vehicles are being further solidified as part of our future. Technology advancements and price decreases are driving more adoption. Those who purchase now see the benefits from going electric--immediately. For fleets to reap these benefits, they believe they must have the upfront capital required to procure zero-emission vehicles. Thankfully, the government has plenty of capital ready to solve this problem. But how do fleets get it?
There are many ways to make a compelling financial case for electric vehicles. Most use cases fall into one of three categories:
1. Purchase the vehicles upfront to own
2. Finance the vehicles to purchase
3. Lease the vehicles
While each of these methods has its benefits to battling cost, federal and state funding opportunities are your best option to drastically reduce your electric fleet’s cost. And thankfully, manufacturers, dealers, or consulting partners will handle this process for you.
Governments have been quick to create electrification timeline mandates to accelerate the adoption of electric vehicles. One example is California’s executive order requiring all new in-state vehicle sales to be zero-emission vehicles starting 2035. This mandate is daunting and capital intensive for fleets; however, opportunities have been created at the federal and state level to offset electrification costs.
Incentives & Tax Credits
First, incentive programs help offset the cost of electric vehicle adoption by providing debt-free capital to organizations. These incentive programs typically reward fleets for purchases of vehicles as well as implementing charging infrastructure. While funds may differ per state, fleets can expect to save on average 15%-40% off the vehicle’s sticker price.
Secondly, fleets can take advantage of tax credits and incentives to benefit their electric vehicles’ use in the future. One example is the Alternative Fuels Infrastructure Tax Credit, which awards fleets who install infrastructure to support a zero-emission operation. Fleets can be granted up to 30% of the infrastructure cost, not to exceed $30,000.
Low-Interest Rate Loans
Another burden for fleets looking to electrify is obtaining low-interest-rate loans for their purchases. Many fleets will be forced to adopt electric vehicles whether they have the capital available or not. To reduce fleets’ risk of going electric, the U.S. Department of Energy provides loan guarantees for projects that reduce emissions and promote advanced commercial adoption. This is an excellent option for fleets looking to remove the risk of debt from their electrification purchase. Loan guarantees are available for up to 100% of the loan’s value.
Funding doesn’t only support organizations looking to adopt electric vehicles but also vendors looking to improve their EV technology and manufacturing. The Advanced Technology Vehicles Manufacturing Loan program supports companies looking to build manufacturing facilities in the United States to support Advanced Vehicle Technology. This includes technology to help zero-emission vehicles or hybrids achieving at least 75 miles per gallon fuel efficiency. Eligible manufacturers can receive a direct loan up to 30% of the cost of re-equipping, expanding, or establishing manufacturing facilities.
The best time to start thinking about electric vehicle procurement is right now. Switching to electric vehicles is the easiest way to lower the total cost of fleet ownership. These incentive programs that sweeten the deal are limited, and the majority work on a first-come, first-serve basis. The electric vehicle movement is full of resources ready for you to help you through the electrification process. Your regional Clean Cities Coalition is a terrific place to find applicable funding for your procurement efforts and educate yourself about the process.