ARB approves funding plan for low-carbon, zero-emission vehicles, boosts funding for low-income pilot programs

CONTACT: Melanie Turner 916-322-2990

SACRAMENTO - The California Air Resources Board today approved a $373 million funding plan that covers all investments in advanced technologies for fiscal year 2015-16, from zero-emission heavy-duty trucks and buses to rebates for low- and zero-emission passenger vehicles. 

The budget for the annual Funding Plan for Low Carbon Transportation Investments and the Air Quality Improvement Program is up by $150 million over last year's budget, and is subject to approval by the Legislature when it considers the proposed expenditure of Cap-and-Trade auction proceeds as part of the State Budget.

Action taken by the Board today to boost funding for clean vehicle programs is in direct response to growing demand, and the need to put more zero-emission vehicles on California’s roads and highways. This funding plan delivers clean air, less carbon pollution and provides financial incentives to allow all Californians to benefit from driving and owning the cleanest vehicles.
— Air Resources Board Chairman Mary D. Nichols

The investments are pivotal to meeting California’s ambitious goals to reduce greenhouse gas emissions, improve air quality, deploy zero-emission vehicles and reduce petroleum dependency by accelerating the development and deployment of advanced vehicle technologies.

The bulk of the $373 million -- $350 million -- comes from the funds in the state’s Greenhouse Gas Reduction Fund dedicated to low-carbon transportation investments and supports a variety of programs for a wide range of cars, trucks and off-road equipment. An additional $23 million comes from the Air Quality Improvement Program under AB 8.

$200 million is for light-duty vehicles, including the Clean Vehicle Rebate Project, which provides incentives for the purchase of zero-emission vehicles.  $167.5 million is dedicated to heavy-duty vehicle and freight-equipment projects, including vouchers to help support the purchase of hybrid and zero-emission trucks and buses. Among the heavy-duty vehicle investments are three new programs, including a trade-up pilot program to transition off-road agricultural equipment to cleaner technologies. (The remaining $5.5 million is held for administrative overhead and a reserve.)

The Funding Plan builds on last year’s investments that benefit disadvantaged communities, including innovative pilot programs to help owners of older, dirty vehicles move up to much cleaner, newer cars including electric vehicles. Over all, the Funding Plan dedicates 50 percent of the low-carbon transportation funds to benefit disadvantaged communities. Of those dedicated funds, 10 percent is to be invested directly in those communities.

Key Highlights of the Funding Plan:

  • $163 million for the Clean Vehicle Rebate Project, which offers up to $5,000 in vehiclerebates for the purchase or lease of new, eligible zero-emission and plug-in hybrid light-duty vehicles. This allocation is expected to meet demand projected for the upcoming year and includes an income eligibility cap to exclude high-income consumers and higher rebate levels for lower income consumers.
  • Increased Investments for Light-Duty Pilot Projects in disadvantaged communities including $20 million to expand air district administered retire-and-replace pilot programs that help low-income residents afford the cleanest cars.
  • $12 million for HVIP (Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project) to encourage commercial deployment of hybrid and zero-emission trucks and buses.
  • Expanded Investments in Large-Scale Commercialization Projects, including the addition of $20 million for pilot deployment of zero-emission trucks and $45 million for pilot deployment of zero-emission buses, to help these technologies become more cost competitive. This includes $5 million for school buses in rural school districts.
  • $59 million for advanced technology demonstration projects for larger vehicles, building on demonstrations funded with last year’s appropriation.
  • Continuation of the successful Truck Loan Assistance Program that provides credit to consumers upgrading their trucks.
  • Additional investments in both on- and off-road advanced technologies.

The Funding Plan addresses two new statutory requirements: The first, SB 1275, authored by Senate President Pro Tem Kevin de León, established the Charge Ahead California Initiative with a goal of placing 1 million zero-emission and near-zero-emission vehicles in California by 2023, and increasing access to these vehicles by low-income consumers and consumers in disadvantaged communities. SB 1275 also required ARB to establish an income eligibility limit for its existing Clean Vehicle Rebate Project. SB 1204, authored by Senator Ricardo Lara, created the California Clean Truck, Bus and Off-Road Vehicle and Equipment Technology Program to fund the development, demonstration and early commercial deployment of zero- and near-zero-emission technologies with priority given to projects that benefit disadvantaged communities.  Of the plan’s Low Carbon Transportation Investments, $148 million goes to support SB 1204 projects.