At their best, incentive programs for vehicle technologies seed an early, innovative market, getting potential users comfortable with new technology. This has been the goal of CARBâ€™s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project voucher project (HVIP) in California.
HVIP was created to accelerate the adoption of commercial hybrid vehicle technologies in California, and reduce fleet fuel use and emissions. The program has had successes, but also areas for potential improvement. Now in 2018, with some recent changes to HVIP that XL Hybrids has supported, the program is a great way for fleet operators in California to take advantage of hybrid (HEV) and plug-in (PHEV, EV) technology.
HVIP is actually a few years old, so a little history is helpful. As with almost any innovation, the program did have some growing pains and limitations when it started in 2010. This is to be expected with a complex market like fleet.
For example, initially only new OEM vehicles could qualify for HVIP (not, say, retrofits of existing vehicles). Also, while the HVIP program supported three electrification technologies (HEV, PHEV, EV) over nine vehicle classifications, strangely there was a loophole where Class 2B HEVs (e.g. cargo vans, large pickups) did not qualify for the incentive. Finally, the HVIP programâ€™s total budget was relatively small, and the low dollar amount of individual vouchers did not offset enough of the incremental technology cost to generate widespread adoption. Instead customers were using HVIP vouchers to deploy small pilots, but not commit to electrification of their entire fleet. Because of many factors including these, many early technology suppliers exited the business, leaving only Hino motors, the truck arm of Toyota, remaining as an active participant.
Basically, HVIP wasnâ€™t really driving fleet sales growth as well as it could have and was mainly supporting an established manufacturer (Hino), not the innovative new companies CARB was hoping for. We at XL felt, however, that with a few changes, the program could be everything it was intended to be.
One great characteristic the program has always exhibited is that CARB has a cooperative, consultative approach. Weâ€™ve appreciated this approach as weâ€™ve worked with CARB to earn executive orders for our HEV Ford F-150s, Transit vans, and GM vans, as well as to share our feedback for the HVIP program. We lobbied, we testified, we wrote position papers, and CARB listened and improved the program, making it more inclusive and beneficial.
Three new HVIP program developments that will make a huge difference for California fleet operators in 2018 and beyond are:
1. Many more types of HEVs are now included. In addition to plug-in vehicles, like EV and PHEV trucks, many non-plug-in HEVs are eligible, including Class 2B vans and pickups.
2. We lobbied for slightly older vehicles to qualify for the program. Now any vehicle with 25,000 miles or less could qualify for a voucher. The ability to sell upfits on last yearâ€™s models expands the window in which fleet operators can access vouchers, and this addresses an issue created by the time required each year to obtain Aftermarket Executive Order exemptions.
3. HVIPâ€™s budget has also been greatly expanded, from $10 million to $25 million in previous years, to $180 million in 2018. Voucher amounts for conversions were also almost doubled. This means the program will facilitate the deployment of more technology than ever before, and the net technology cost is even lower for fleets.
These improvements not only make the program more practical for fleet operators, but they save a ton of gasoline and its requisite emissions â€“ anywhere from 25 to 50 percent fuel savings, depending on the vehicle model.
For fleet operators in California, 2018 represents a great opportunity to convert your fleet to hybrid and plug-in, or continue to do so if youâ€™ve already started. With HVIP, break even for HEV upfitting can come in less than 12 to 18 months â€“ so, converting your fleet isnâ€™t just an environmentally responsible decision, itâ€™s a financially responsible one, too.
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