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Federal Hybrid Incentive Funding

We partnered with FedEx to build hybrid-electric delivery trucks. FedEx used incentive funding to build them.

Incentive Programs

The Energy Policy Act of 2005 (EPAct) enables fleets that purchase hybrid trucks to receive a tax credit based on their fuel economy gains. The Internal Revenue Service issued guidance for the medium- and heavy-duty truck sector and we're in the process of determining the requirements for it.

Administering Entity

Internal Revenue Service (IRS)

Program Goals

Offer businesses federal tax credits for purchasing hybrid electric vehicles

Eligibility

U.S. corporate taxpayers who buy or lease qualifying vehicles

Funds available

The bill provides tax credits for a portion of the incremental cost over a comparable, non-hybrid model according to the truck's fuel economy improvement.

Fuel economy improvement of 30-40% is eligible for a tax credit of 20% of incremental cost.
Fuel economy improvement of 40-50% is eligible for a tax credit of 30% of incremental cost.
Fuel economy improvement of greater than 50% is eligible for a tax credit of 40% of incremental cost.

Incremental cost is capped at $7,500 for vehicles between 8,501 and 14,000 lbs, $15,000 for vehicles with GVW between 14,001 and 26,000 lbs, and $30,000 for vehicles with GVW greater than 26,000 lbs.

To qualify, the truck also must have at least 15% of its "maximum available power" come from the energy storage system.

Determining Factors

Credits are based on the following:

Vehicle’s weight class
Vehicle fuel economy relative to comparable conventional vehicle
Incremental cost
Must meet a threshold value of “maximum available power” (a percentage of the total vehicle power available from the rechargeable energy storage system)
Application Process

To be determined. According to the statute, “A certification described in clause (i) shall be made by the manufacturer and shall be determined in accordance with guidance prescribed by the Secretary. Such guidance shall specify procedures and methods for calculating fuel economy savings and incremental hybrid costs.”