Project Background for the Innovative Small E-Fleet Pilot Project
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Project Goals
ISEF aims to help small fleets and owner-operators overcome the barriers to adopt zero-emission trucks by addressing common obstacles, such as high upfront costs, limited financing and insurance options, and complex fueling infrastructure planning.
ISEF tests new strategies tailored to the needs of this traditionally underserved group, with the goal of incorporating successful approaches into CARB’s broader medium- and heavy-duty incentive programs.
Eligible small fleets can receive vouchers for innovative solutions, including:
- All-inclusive leases
- Peer-to-peer truck sharing
- Truck-as-a-service
- Individual owner planning assistance
- Other flexible mechanisms.
CARB continues to look for ways to improve ISEF and provide greater assistance to small fleets. New options are being explored to support small fleets overcome challenges in operating zero-emission vehicles. A used vehicle voucher pilot concept, advanced fleet management assistance, and insurance support are actively being developed.
Guiding Legislation/Policy Drivers
ISEF was established as a set aside within the Clean Truck and Bus Voucher Incentive Project (HVIP) in 2021 to increase support and funding opportunities for small fleets. ISEF aligns with the goals of Senate Bill 372, which directs CARB to create additional financial and non-financial tools to support the adoption of medium- and heavy-duty ZEVs. ISEF allows participants to explore innovative methods, beyond a standard purchase, to help small fleets and independent owner operators adopt zero-emission.
Project Funding/Allocations/History
ISEF has been allocated $94 million since the project launched.
Funding sources include the Greenhouse Gas Reduction Fund, the Air Quality Improvement Fund, and the Air Pollution Control Fund. Although no funding was specifically earmarked for outreach, outreach activities are supported using HVIP administration funding.
Funding Breakdown
| Fiscal Year | Funding Allocation | Incentive Funds | Administration | Funding Requested | Funding Redeemed |
|---|---|---|---|---|---|
| FY 2021-22 | $25 M | $23.6 M | $1.4 M | $6.9 M | $6.9 M |
| FY 2022-23 | $34.5 M | $32.8 M | $1.7 M | $8.4 M | $7.6 M |
| FY 2023-24 | $14.3 M | $13.6 M | $691 K | $5.3 M | $5.3 M |
| FY 2024-25 | $14.97 M | $14.2 M | $723 K | $23.5 M | $14.8 M |
| FY 2025-26 | $5 M | $4.8 M | $242 K | $13.5 M | $2.8 M |
Recent Project/Policy Changes
CARB continues to explore ways to improve ISEF and better support small fleets. On June 13, 2025, CARB held the first ISEF New Options Workgroup to discuss new ideas. Staff expects it will take 1-2 years to implement the new ISEF options. Funding to support these new options may come either from remaining funds from prior years or from future allocations if additional funding for ISEF becomes available. CARB will hold additional workgroups and meetings will be held to further develop the new options listed below.
New Ideas
Used Truck Voucher Pilot
- ISEF staff is creating a pilot for used zero-emission truck incentives. The pilot would help small fleets purchase used zero-emission trucks and collect data on how much the trucks are worth over time.
- The pilot is currently in the early design stages and staff are focusing on ways to ensure the incentives do not cause price inflation and that the used trucks that receive incentives are of good quality and will meet fleets’ needs.
- Staff expects that the pilot will launch between late 2027 and early 2028.
- A Request for Information for this concept was open between January 16, 2025 - February 28, 2025. Submitted comments are available to view.
Advanced Fleet Management Assistance
- ISEF staff is considering adding support for more technical assistance to small fleets to help maximize cost savings after the purchase of medium- and heavy-duty zero-emission vehicles.
- Potential services that may be eligible for incentives include: telematics consulting, driver education, safety, breakdown coverage, or logistics support.
- Staff expects that additional supports could be provided in late 2026/early 2027.
Insurance
- CARB collaborates with the California Department of Insurance to research and address insurance challenges in the zero-emission truck market. The Department of Insurance conducted a survey of admitted insurance providers and published a report to address areas of concern and strategize market development, under the direction of AB 844 (Gipson, 2023).
- The survey found that insurance is broadly available but that high cost is a key concern. Higher upfront vehicle costs, variability in insured values, and an absence of residual values in the emerging market contributes to these costs. In addition, insurance companies do not have a reliable method to identify zero-emission powertrains. Based on the survey, list of companies that underwrite certain zero-emission trucks was published and an insurance fact sheet was developed.
- In response to these findings, staff is investigating innovative solutions such as sponsoring a public risk pool or similar option that help fleets find more affordable insurance. Staff is also considering direct insurance assistance for an initial period to support eligible small fleets, while the market matures. Direct support will increase available data that is necessary for risk assessment by insurance companies and drive market development.
- Staff expects additional information to be shared in Fall 2026.