Project Background for the Innovative Small E-Fleet Pilot Program
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Program Goals
ISEF aims to help small fleets and owner-operators overcome the barriers to adopt zero-emission trucks by addressing common barriers, 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 increased vouchers for innovative solutions, including:
- All-inclusive leases
- Peer-to-peer truck sharing
- Truck-as-a-service
- Infrastructure Assistance
- Individual owner planning assistance
- Other flexible mechanisms.
Lessons learned from ISEF will inform improvements to HVIP and CARB’s broader heavy-duty incentive policies, ensuring continued support for small 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 adopt zero-emission.
Project Funding/Allocations/History
ISEF has been allocated $152.27 million since the program beyond in FY 2020-21.
Although no funding was specifically earmarked for outreach; outreach activities were supported using the administration dollars.
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 | $83 M | $81.3 M | $1.7 M | $0 |
| FY 2023-24 | $14.3 M | $13.6 M | $691 K | $0 |
| FY 2024-25 | $14.97 M | $14.2 M | $723 K | $0 |
| FY 2025-26 | $5 M | $4.8 M | $242 K | $0 |
Recent Project/Policy Changes
A variety of HVIP policy changes 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, in addition to an allocation of $5 M, ISEF staff is exploring new options for innovative options, including:
Design of a Used Truck Voucher Pilot Concept
- As the zero-emission vehicle (ZEV) market grows, more ZEVs will enter the secondary market creating opportunities for small fleets to adopt them. We plan to carefully design a pilot that will prevent price inflation for new vehicles, ensure sales of quality vehicles, and collect 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
- This program would provide technical assistance after adoption of medium- and heavy-duty zero emission vehicles to help small fleets maximize cost savings. Potential services could include:. telematics consulting, driver education, safety, breakdown coverage, or logistics support.
Insurance
- CARB has collaborated with the California Insurance Commissioner's office for over two years to address insurance challenges. Under direction of AB 844 (Gipson, 2023) the insurance commissioner conducted a survey of insurance providers and developed 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 is considering providing support for through the first year insurance after an eligible small fleet adopts ZEVs while the market matures. Such support 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. Additional workgroup and meetings will be held to further develop the new options.
Past Project Info/Reports
None