Federal Tax Credits
Qualified Commercial Clean Vehicle tax credit: $7,500 for light-duty EVs, $40,000 for Medium-Heavy Duty Vehicles.
The Inflation Reduction Act established a tax credit for qualified commercial clean vehicles purchased on or after January 1, 2023. Known as the Qualified Commercial Clean Vehicle tax credit, this provides up to a $40,000 tax credit for the adoption of electric medium-duty and heavy-duty trucks.
The qualify:
- For vehicles under 14,000 lbs. (class 3 and under) you qualify for a $7,500 credit.
- For vehicles larger than 14,000 lbs. (class 4 and up) you qualify for a $40,000 tax credit.
- These credits can be transferred to the dealer and be used as a point of sale credit.
- Have a battery rating of not less than 7 kilowatt hours.
- Importantly, for businesses, the credits are not tied to any domestic production or sourcing requirements. This means that the pool of electric vehicles available to business owners will be larger than what is available for consumer tax credits.
Grant Programs for Clean Vehicles
Both the Infrastructure Investment and Jobs Act and the Inflation Reduction Act have created grants programs that offer funds for zero-emissions fleet vehicles. See below for the key programs:
- $1 Billion appropriated for an EPA grant/rebate program for clean heavy-duty vehicles
- $400 million set aside to replace vehicles serving communities in non-attainment areas for any pollutant.
- Up to 100% of the cost for Class 6 or Class 7 heavy-duty vehicles
- Eligible recipients: state and municipal gov’ts, tribes, non-profit school associations
- $3 Billion for zero-emission port equipment and technology and GHG reduction planning for ports
- $750 million set aside for non-attainment areas (for any pollutant)
- Eligible recipients: Port authorities, agency with jurisdiction over port, private entities within port
- $5 billion EPA Clean School Bus Program
- Provides grants to K-12 school districts to replace diesel buses with electric, CNG, or propane school bus options.
- Eligible recipients: state or local governments, eligible contractors, non-profit school transportation associations
- Can provide up to 100% of the cost of a replacement bus
- $5 billion Low or No Emissions Bus Grants
- Provides capital funding to purchase or replace bus fleets with low or zero-emissions buses.
- Eligible recipients: states, cities, counties, special districts, tribal governments