several reports reports that a large federal incentive would be included in the Inflation Reduction Act, which was introduced in the Senate this week, for the purchase of heavy duty electric trucks that weigh more than 14,000 pounds. In addition to electric tractors made by Tesla, Freightliner, BYD, Mercedes, and Lion, electric transit buses, electric school buses, electric fire vehicles, and all the other diesel-powered workhorses that keep America moving would also fall under this category. The incentive is only available up to $40,000 or 30% of the buying price.
Here, a disclaimer is necessary. What follows is predicated on the Inflation Reduction Act, which is currently before Congress, passing and being signed into law by the president. There are numerous slips between the cup and the lip, and there will be great pressure to add or remove items. Every member of Congress is currently outlining a long list of amendments they want to see made to the law, which would turn it into a “Christmas tree bill” that differs significantly from the original due to its abundance of gifts, decorations, carve-outs, and special features.
REWARDS FROM THE STATE FOR ELECTRIC TRUCKS As important as the new federal incentive may be, some states already have robust incentive schemes for heavy-duty electric vehicles. The Heavy Vehicle Incentive Program program in California offers up to $120,000 to buyers of heavy duty electric trucks. Currently, 8 electric tractors qualify for the state-funded subsidies, which include trucks from BYD, Lion, Freightliner, Nikola, and other manufacturers. If and when the Tesla Semi enters production, it will join that group.
The California program invests a sizeable amount of money in electric school buses as well, with the highest benefit for some models being a whooping $375,000 . Step vans, utility trucks, straight trucks, ambulances, and passenger shuttle vehicles all qualify for comparable discounts.
THE CONCLUSION Buyers of heavy duty electric trucks have access to a sizable amount of money thanks to the federal government and numerous state incentives, which begs the question: How much do manufacturers boost prices to, in effect, funnel some of that rebate money into their corporate coffers? One Twitter user has openly asserted that if the federal incentive scheme is passed into law, Tesla will probably increase the cost of its Semi. Even though doing so defeats the incentives’ intended purpose, he is probably correct.
None of us can really change that, unfortunately. The good news is that the available incentives will cause a significant number of big trucks fueled by diesel to be retired. For fleet operators, switching to electric vehicles is a no-brainer due to these purchase incentives and the significantly lower operating expenses. If only the Democrats could advance that Christmas tree to the finish line.
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