Texas Restores Incentives for Advanced Vehicles, Boosts Fleets with Grants for Vehicles and Fueling Infrastructure

Posted by Suzanne Bertin on Jul 25, 2017 3:36:04 PM

This is a guest post by Suzanne L. Bertin, Executive Director, Texas Advanced Energy Business Alliance, an AEE state partner. To learn more about TAEBA, click here. To learn more about AEE’s nationwide coalition of state and regional partners, click here.


Then-governor Rick Perry speaks at an EV event in 2011. Photo via Flickr.

On June 12, Texas Gov. Greg Abbott signed into law SB 1731, enacting policies promoting electric and hydrogen vehicles and other advanced energy transportation technologies in the Lone Star State. In a legislative session otherwise dominated by social issues, the passage of this bill was a high point for advanced energy. At Texas Advanced Energy Business Alliance (TAEBA), this was one of our priority bills, and we are glad to see Texas return to the leadership role it held until a key incentive program lapsed in 2015. Now, Texas has rejoined the 14 other states and Washington, D.C., that provide incentives for advanced vehicles.

The bill, originally introduced as SB 26 by Sen. Craig Estes (R-Wichita Falls), amends various programs under the Texas Emissions Reduction Plan (TERP), a law enacted in 2001 to provide a suite of voluntary incentives to support cost-effective compliance with federal Clean Air Act requirements. 

For advanced transportation, the law reinstates an incentive program for the purchase or lease of alternative fuel vehicles that expired in 2015. The program will once again provide a grant of $2,500 per vehicle for the purchase of eligible light-duty vehicles powered by electricity or hydrogen fuel cells, and $5,000 per vehicle for the purchase of eligible light-duty vehicles fueled by compressed natural gas (CNG) or liquefied petroleum gas (LPG). Although capped at 2,000 EVs and hydrogen vehicles and 1,000 CNG and LPG vehicles per two-year state budget cycle, these state incentives should give sales of these advanced vehicles a boost.

Another provision of the law would create an alternative fuel fleet grant program for government entities. These grants will cover the incremental cost of the purchase or lease of such advanced vehicles and fueling infrastructure to support them.

The new law also extends TERP programs until designated geographic areas are determined to be in attainment with national EPA standards. Various TERP programs were slated to expire on August 31 of this year, 2018, or 2019. 

With some minor exceptions, the revised law takes effect September 1.  The Texas Commission on Environmental Quality, the state regulatory agency responsible for TERP program implementation, will conduct a rulemaking to implement the changes in law. 

Texans love their cars and trucks. By passing this bill and signing it into law, our elected leaders have shown some love to cars and trucks powered by advanced energy as well.

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Correction: Photo of a Nissan Leaf replaced an image of a Tesla Model S in Houston, as several readers accurately pointed out that the incentive only applies to vehicles sold through dealerships, which excludes Tesla models. 

Topics: State Policy



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