Project Background for the Innovative Small E-Fleet Pilot Program
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Program Goals
The goal of ISEF is to help small fleets and owner-operators overcome the barriers to zero-emission truck adoption, such as high upfront costs, limited financing & insurance options, and complex planning for fueling infrastructure. By dedicating a portion of HVIP funds to small fleets, HVIP can position itself to better understand the specific needs of this traditionally underserved group and support their accessing to zero-emission. ISEF eligible small fleets can receive increased vouchers for innovative solutions such as all-inclusive leases, peer-to-peer truck sharing, truck-as-a-service, assistance with infrastructure, and individual owner planning assistance, as well as other mechanisms. Staff anticipates that the lessons learned from the Innovative Small E-Fleet Pilot Project will be used to inform changes to HVIP and CARB’s broader heavy-duty incentive policies as we continue to target smaller fleets.
Guiding Legislation/Policy Drivers
ISEF was established as a set aside within the Clean Truck and Bus Voucher Incentive Project (HVIP) in the 2021-22 Funding Plan to increase support and funding opportunities to small fleets. Senate Bill 372 also directs CARB to explore additional financial and non-financial mechanisms to support the transition to ZEVs. ISEF allows participants to explore innovative methods, beyond a standard purchase to help small fleets and independent owner operators make the transition to zero-emission.
Project Funding/Allocations/History
- FY 2020-21: $25M was originally allocated but was increased by $10M to meet the demand by small fleets.
- FY 2022-23:
- $33 M of original funding was reserved exclusively for innovative solutions such as short-term leases, rentals, and truck-as-a-service through approved ISEF providers
- An additional $50 M was allocated rom broader HVIP to fund small fleets' standard purchase requests
- FY 2023-24: $14.3 M allocated
- FY 2024-25: $14.97M allocated
Funding Breakdown
| Fiscal Year | Funding Allocation | Incentive Funds | Administration | Outreach |
|---|---|---|---|---|
| FY 2021-22 | $35 M | $33.6 M | $1.4 M | $0 |
| FY 2022-23 | $84.65 M | $80.2 M | $4.45 M | $0 |
| FY 2023-24 | $14.3 M | $13.6 M | $690 K | $0 |
| FY 2024-25 | $14.97 M |
Recent Project/Policy Changes
A variety of HVIP policy changes will impact ISEF vouchers and can be found at HVIP's FY23-24 Funding and Policy Reminders webpage.
As noted in the Fiscal Year 2024-25 Funding Plan for Clean Transportation Incentives, ISEF staff is exploring new options for innovative solutions. These include the following:
Design of a Used Truck Voucher Pilot Concept
- With accelerating market growth, the supply of zero-emission vehicles (ZEVs) into the secondary market will expand over the next few years. Thus, creating an opportunity for small fleets to adopt ZEVs. We plan to carefully design a pilot that will avoid any potential acceleration of used vehicle prices and ensure sales of quality vehicles, while also providing residual value data. Voucher processing would include an HVIP approved dealer to ensure product quality and to provide extended warranties.
- A Request for Information for the concept took place between January 16, 2025 - February 28, 2025. Submitted comments are available for viewing here.
Advanced Fleet Management Assistance
- Advanced Fleet Management Assistance would be technical assistance post adoption of medium- and heavy-duty zero emission vehicles. The purpose of this program would be to provide the technical assistance that would help a small fleet to operate the vehicle to its maximum cost saving potential. This can include assistance services such as telematics consulting, driver education, safety, breakdown coverage, or logistics.
Insurance
- CARB has worked collaboratively with the California Insurance Commissioner's office the past two and a half years to investigate and understand insurance issues. Under direction of AB 844 (Gipson, 2023) the insurance commissioner conducted a survey of insurance providers and to then develop a report addressing areas of concern and strategies to accelerate market development. Key takeaways are that insurance companies don't have a reliable method to identify zero-emission vehicles, and that insurance is broadly available but high cost is a key concern. A lack of residual values also contributes to higher costs. A list of companies that underwrite zero emission trucks was added to their website based on the survey.
- Insurance on these vehicles can be prohibitively expensive for small fleets (due to higher vehicle cost). Staff anticipates providing support for insurance through the first year proceeding the adoption of a zero-emission vehicle by an eligible small fleet. The support may be available while the zero-emission vehicle market matures. It can allow for an increase in available data that is necessary for risk assessment by insurance companies
The ISEF New Options Workgroup held on June 13, 2025, discussed the new ideas. We would anticipate 1 to 2 years to fully develop and implement the new options.
Past Project Info/Reports
None