Last month, Illinois became the first state in the Midwest, and one of the few states outside the coasts, to establish a state-run incentive program for medium- and heavy-duty (MHD) electric vehicles (EV) that are part of a fleet, such as commercial trucks, transit, and school buses. The primary purpose of the legislation is to support fleet owners and operators who wish to go all electric; although MHD EVs show strong market growth, their adoption has been slow in part due to their high up-front cost. EVs represent less than 1% of new MHDV sales currently and incentives for vehicle purchases are proven to help increase EV adoption. Rebates and tax incentives for light-duty vehicle (LDV) EVs have captured a larger share of the LDV market overall, accounting for roughly 10% of new LDV sales. It’s no surprise that most MHD EVs are sold in states offering a purchase incentive program.
Illinois’ fleet electrification incentive program, passed within the Budget Implementation Bill (HB 4959), will work in concert with existing utility, state, and federal policies aimed at electrifying trucks and supporting the in-state EV manufacturing industry, though the program will require a source of funding. As a national transportation hub, Illinois is positioned to lead in manufacturing and deployment of EVs. With this program targeted at electrifying fleet vehicles, the state is taking another significant step towards a comprehensive EV transition for all vehicles.
The program’s creation was celebrated by a broad coalition of EV manufacturers, commercial fleet operators, goods distributors, and environmental and health advocates.
Grant program will award funding for fleet vehicles, like school buses and delivery trucks
The program, under the Illinois Environmental Protection Agency (IEPA), will provide grants to businesses, schools, transit agencies, and government units with fleet vehicles so they can purchase electric trucks and buses when adding to their fleets, or replacing old vehicles. Eligible vehicles include those between weight classes 2b – 8—everything from commercial pick-up trucks, to delivery vans, to semis. The policy prioritizes the purchase of EVs that would be based in environmental justice communities and electric school buses.
The program is designed to supplement other incentives available for electrifying fleets, like the federal Clean Commercial Vehicle Tax Credit and electric school bus grants, among other funding that may be made available, like incentives proposed by ComEd in their Beneficial Electrification Cycle 2 Plans. However, the program itself will require an appropriation of state or federal funds before it can begin to award grants, which will be a key priority for Advanced Energy United in the state’s next budget cycle.
Illinois further establishes its role as an EV leader
Illinois’s MHD EV incentive program follows years of policies to foster the growth of the state’s EV industry, which includes local manufacturers like Rivian Automotive and Lion Electric.
In 2021, both the Reimagining Energy and Vehicles in Illinois Act and the Climate and Equitable Jobs Act were signed into law. The former established incentives for bringing manufacturing jobs while the latter set a goal of 1 million EVs on the road by 2030 and required the state’s two largest electric utilities to regularly file Beneficial Electrification Plans and Integrated Grid Plans, facilitating investments that benefit ratepayers and support EV deployment. Federal investments like the Bipartisan Infrastructure Law (2021) and Inflation Reduction Act (2022) have supplemented state and utility funding for charging infrastructure, electric school buses, and MHD EV deployment, with the IEPA and Illinois Department of Transportation continuing to roll out funding from these sources.
Going forward, Advanced Energy United will continue to work with industry, utility, environmental, and state leaders to secure the economic, environmental, and health benefits of Illinois’ growing EV industry.