California Incentives and Laws for HEVs / PHEVs

The list below contains summaries of all California incentives and laws related to HEVs / PHEVs.

State Incentives

Hybrid Electric Vehicle Purchase Vouchers

Through the Hybrid Truck and Bus Voucher Incentive Project (HVIP), the California Air Resources Board provides vouchers to eligible fleets to reduce the incremental cost of qualified medium- and heavy-duty hybrid electric vehicles at the time of purchase. Vouchers are available on a first-come, first-served basis and range from $10,000 to $40,000. Only fleets that operate vehicles in California are eligible. Refer to the HVIP website for a list of qualified vehicles and other requirements.

Alternative Fuel and Vehicle Research and Development Incentives

The California Energy Commission (CEC) administers the Alternative and Renewable Fuel and Vehicle Technology Program to increase the use of alternative and renewable fuels and innovative technologies. The CEC must prepare and adopt an annual Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program to determine funding priorities and opportunities and will describe how program funding will be used to complement other public and private investments. Grants and loans are available for projects that:

• Develop and improve alternative and renewable low carbon fuels;
• Optimize alternative and renewable fuels for existing and developing engine technologies;
• Produce alternative and renewable low carbon fuels in California;
• Decrease the overall impact of an alternative and renewable fuel's lifecycle carbon footprint and increase sustainability;
• Expand fuel infrastructure, fueling stations, and equipment;
• Improve light-, medium-, and heavy-duty vehicle technologies;
• Retrofit medium- and heavy-duty on-road and non-road vehicle fleets;
• Expand infrastructure connected with existing fleets, public transit, and transportation corridors; and
• Establish workforce training programs, conduct public education and promotion, and create technology centers.

(Reference Assembly Bill 1314, 2011; California Code of Regulations, Title 13, Chapter 8.1; and California Health and Safety Code 44270-44274.7)

High Occupancy Vehicle (HOV) Lane Exemption

Compressed natural gas (CNG), hydrogen, electric, and plug-in hybrid electric vehicles (PHEVs) meeting specified California and federal emissions standards and affixed with a California Department of Motor Vehicles Clean Air Vehicle sticker may use HOV lanes regardless of the number of occupants in the vehicle. White Clean Air Vehicle Stickers, expiring January 1, 2015, are available to an unlimited number of qualifying CNG, hydrogen, and electric vehicles. Beginning January 1, 2012, a new Clean Air Vehicle Sticker will be available for a limited number of qualified PHEVs. This sticker will expire January 1, 2015. For more information about qualified vehicles, see the California Air Resources Board Carpool Lane Use Stickers website. (Reference California Vehicle Code 5205.5 and 21655.9)

Low Emissions School Bus Grants

The Lower-Emission School Bus Program provides grant funding for the replacement of older school buses and for the purchase of air pollution control equipment for in-use buses. The California Air Resources Board must verify that the air pollution control devices reduce particulate matter emissions by at least 85% for each retrofitted school bus. Public school districts in California that own their buses are eligible to receive funding. Private school transportation providers that contract with public school districts in California to provide transportation services are also eligible to receive funding for the retrofit of in-use buses. New buses purchased to replace older buses may be fueled with diesel or an alternative fuel, provided that the required emissions standards specified in the current guidelines for the Lower-Emission School Bus Program are met. Funds are also available for replacing on-board natural gas tanks on older school buses and for updating deteriorating natural gas fueling infrastructure. Commercially available hybrid electric school buses may be eligible for partial funding. Contact local air districts for more information about grant funding availability and distribution from the Lower-Emission School Bus Program. (Reference Assembly Bill 462, 2011; Senate Bill 570, 2011; and California Health and Safety Code 41081 and 44099))

Employer Invested Emissions Reduction Funding - South Coast

The South Coast Air Quality Management District (SCAQMD) administers the Air Quality Investment Program (AQIP). The AQIP provides funding to allow employers within SCAQMD's jurisdiction to make annual investments into an administered fund to meet employers' emissions reduction targets. The revenues collected are used to fund alternative mobile source emissions/trip reduction programs, including alternative fuel vehicle projects, on an on-going basis. Programs such as low emission, alternative fuel, or zero emission vehicle procurement, and old vehicle scrapping may be considered for funding. Current requests for proposals and funding opportunities are listed on the AQIP website.

Technology Advancement Funding - South Coast

The South Coast Air Quality Management District's Clean Fuels Program provides funding for research, development, demonstration, and deployment projects that are expected to help accelerate the commercialization of advanced low emission transportation technologies. Eligible projects include powertrains and energy storage/conversion devices (e.g., fuel cells and batteries), and implementation of clean fuels (e.g., natural gas, propane, and hydrogen), including the necessary infrastructure. Projects are selected via specific requests for proposals on an as-needed basis or through unsolicited proposals. Approximately $10 million in funding is available annually with expected cost-share from other project partners and stakeholders.

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Incentives - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District administers the Public Benefit Grant Program, which provides funding to cities, counties, special districts (such as water districts and irrigation districts) and public educational institutions for the purchase of new AFVs, including electric, natural gas, and propane vehicles, as well as hybrid electric vehicles; electric vehicle supply equipment and alternative fueling infrastructure projects; and advanced transportation and transit projects. Projects are considered on a first-come, first-serve basis.

Low Emission Vehicle Incentives and Technical Training - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District administers the REMOVE II program, which provides incentives for the purchase of low emission passenger vehicles, light-duty trucks, small buses, and trucks with gross vehicle weight ratings of 14,000 pounds or less. The purpose of REMOVE II is to encourage the early introduction of low emission vehicles in the San Joaquin Valley. Funding in the amount of $1,000 to $3,000 is available per vehicle according to the emissions certification level and size of the vehicle. Vehicles must be powered by alternative fuel or electric or hybrid electric engines/motors. REMOVE II also includes an Alternative Fuel Vehicle (AFV) Mechanic Training Component that provides incentives to educate personnel on the mechanics, operation safety, and maintenance of AFVs, fueling stations, and tools involved in the implementation of alternative fuel technologies.

Utility/Private Incentives

Electric Vehicle Supply Equipment (EVSE) Incentive - Coulomb Technologies

Coulomb Technologies' ChargePoint America program offers EVSE at no cost to individuals or entities in the San Jose, San Francisco Bay, Sacramento, and Los Angeles metropolitan area. To be eligible for a public or commercial charging system, an entity must be located within the specified metropolitan areas and in defined potentially "high use" areas, and provide public access to the charging system. Companies and municipalities may apply on the ChargePoint America website. To be eligible for free home charging stations, individuals living within the specified areas must purchase a qualified electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV). Individuals purchasing an eligible EV or PHEV should apply for the ChargePoint America program at the dealership or with the vehicle manufacturer at the time of vehicle purchase. In most cases, installation will be paid for by the EVSE owner; some cities, states, and utilities, however, will provide funding towards installation costs. All participants in the ChargePoint America program must agree to anonymous data collection after installation. Additional restrictions may apply.

Electric Vehicle Supply Equipment (EVSE) Rebate - LADWP

The Los Angeles Department of Water and Power (LADWP) provides rebates of up to $2,000 to residential customers who purchase or lease a new electric vehicle and install Level 2 EVSE with a separate time-of-use meter at their home. Customers living in apartment buildings or condominiums may also qualify for the rebate so long as they have received permission from the property owner and/or homeowner association. The rebate is available to the first 1,000 customers that submit a completed application. The program will expire on June 30, 2013, when the program goals are met, or when the funds are exhausted, whichever occurs first. For program guidelines and application materials, see the Electric Vehicle Home Charger Rebate Program website.

Electric Vehicle Supply Equipment (EVSE) Incentive - ECOtality

Through the EV Project, ECOtality offers EVSE at no cost to individuals in the Los Angeles and San Diego metropolitan areas. To be eligible for free home charging stations, individuals living within the specified areas must purchase a qualified electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV). Individuals purchasing an eligible EV or PHEV should apply at the dealership at the time of vehicle purchase. The EV Project incentive program will also cover most, if not all, of the costs of EVSE installation. All participants in the EV Project incentive program must agree to anonymous data collection after installation. Additional restrictions may apply.

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (AFV) Insurance Discount

Farmers Insurance provides a discount of up to 10% on all major insurance coverage for HEV and AFV owners. To qualify, the automobile must be designed to use a dedicated alternative fuel as defined in the Energy Policy Act of 1992, or a HEV. A complete Vehicle Identification Number is required to validate vehicle eligibility.

Clean Vehicle Electricity and Natural Gas Rate Reduction - PG&E

Pacific Gas & Electric (PG&E) offers a discounted Experimental Residential Time-of-Use rate for electricity used to charge battery electric vehicles (EVs), plug-in hybrid electric vehicles, and natural gas vehicle (NGV) home fueling appliances. Special rates are also available for natural gas that residential customers compress using home fueling appliances. For more information, see the PG&E EV Rate Options and NGV Rates websites.

Laws and Regulations

Plug-In Electric Vehicle Parking Regulation

An individual may not stop, stand, or park a motor vehicle, or otherwise block access to parking, in a stall or space designated for the exclusive purpose of charging a plug-in electric vehicle unless the vehicle displays a valid state-issued zero emission vehicle (ZEV) decal and is connected for electric charging purposes. For the ZEV decal application, see the California Department of Motor Vehicles ZEV Parking Decal Application website. (Reference Assembly Bill 475, 2011, and California Vehicle Code 22511)

Electricity Provider Definition

A corporation or individual that owns, controls, operates, or manages a facility that supplies electricity to the public exclusively to charge light-duty battery electric and plug-in hybrid electric vehicles is not defined as a public utility. (Reference Assembly Bill 631, 2011, and California Public Utilities Code 216)

Common Interest Development Electric Vehicle Supply Equipment (EVSE) Regulations

Community apartment projects, condominium projects, planned developments, stock cooperatives, or other common interest developments may not prohibit or unreasonably restrict the installation or use of EVSE. (Reference Senate Bill 209, 2011, and California Civil Code 1353.9)

Access to Plug-In Electric Vehicle Registration Records

The California Department of Motor Vehicles may disclose to an electrical corporation or local publicly owned utility a plug-in electric vehicle (PEV) owner's address and vehicle type if the information is used exclusively to identify where the PEV is registered. (Reference Senate Bill 859, 2011, and California Vehicle Code 1808.23)

Plug-In Electric Vehicle Infrastructure Information Resource

The California Energy Commission, in consultation with the Public Utilities Commission, must develop and maintain a website containing specific links to electrical corporations, local publicly owned electric utilities, and other websites that contain information specific to plug-in electric vehicles (PEVs), including the following:

• Resources to help consumers determine if their residences will require utility service upgrades to accommodate PEVs;
• Basic charging circuit requirements;
• Utility rate options; and
• Load management techniques.

(Reference California Public Resources Code 25227)

Plug-In Electric Vehicle Infrastructure Evaluation

The California Public Utilities Commission (Commission), in consultation with the California Energy Commission, California Air Resources Board, electrical corporations, and the motor vehicle industry, must evaluate policies to develop infrastructure sufficient to overcome barriers to the widespread deployment and use of plug-in electric vehicles (PEVs). By July 1, 2011, the Commission must adopt rules to address the following:

• The impacts on electrical infrastructure and any infrastructure upgrades necessary for widespread use of PEVs, including the role and development of public charging infrastructure;
• The impact of PEVs on grid stability and the integration of renewable energy resources;
• The technological advances necessary to ensure the widespread use of PEVs and what role the state should take to support the development of this technology;
• The existing code and permit requirements that will impact the widespread use of PEVs and any recommended changes to existing policies that may be barriers to the widespread use of PEVs;
• The role the state should take to ensure that technologies employed in PEVs work harmoniously and across service territories; and
• The impact of widespread use of PEVs on achieving the state's greenhouse gas emissions reductions goals and renewables portfolio standard program, and what steps should be taken to address the possibility of shifting emissions reductions responsibilities from the transportation sector to the electrical industry.

(Reference California Public Utilities Code 740.2)

Plug-In Electric Vehicle Charging Requirements

New plug-in electric vehicles (PEVs) must be equipped with a conductive charger inlet port that meets the specifications contained in Society of Automotive Engineers (SAE) standard J1772. PEVs must be equipped with an on-board charger with a minimum output of 3.3 kilovolt amps. These requirements do not apply to PEVs that are only capable of Level 1 charging, which has a maximum power of 12 amperes (amps), a branch circuit rating of 15 amps, and continuous power of 1.44 kilowatts. (Reference California Code of Regulations Title 13, Section 1962.2)

State Transportation Plan

The California Department of Transportation (Caltrans) must update the California Transportation Plan (Plan) by December 31, 2015, and every five years thereafter. The Plan must address how the state will achieve maximum feasible emissions reductions, taking into consideration the use of alternative fuels, new vehicle technology, and tailpipe emissions reductions. Caltrans must prepare and submit an interim report to the California Transportation Commission and to the Senate and Assembly committees related to transportation, environmental quality, natural resources, and local government by December 31, 2012. Caltrans must consult and coordinate with related state agencies, air quality management districts, public transit operators, and regional transportation planning agencies. Caltrans must also provide an opportunity for general public input. Caltrans must submit a final draft of the Plan to the legislature and governor. (Reference California Government Code 65071-65073)

Low Emission Vehicle (LEV) Standards

California's LEV II exhaust emissions standards apply to Model Year (MY) 2004 and subsequent model year passenger cars, light-duty trucks, and medium-duty passenger vehicles meeting specified exhaust standards. The LEV II standards represent the maximum exhaust emissions for LEVs, Ultra Low Emission Vehicles, and Super Ultra Low Emission Vehicles, including flexible fuel, bi-fuel, and dual-fuel vehicles when operating on an alternative fuel. New MY 2009 and subsequent model year passenger cars, light-duty trucks, and medium-duty passenger vehicles must meet specified fleet average greenhouse gas (GHG) exhaust emissions requirements. Each manufacturer must comply with these fleet average GHG requirements, which are based on California Air Resources Board calculations. Bi-fuel, flexible fuel, dual-fuel, and grid-connected hybrid electric vehicles may be eligible for an alternative compliance method. Manufacturers may earn credits for fleet average GHG values lower than the fleet average GHG requirement applicable to MY 2012.

As of October 2011, the California Air Resources Board is considering changes to the regulations, referred to as LEV III, which would control smog-causing pollutants and GHG emissions and include efforts to accelerate the production and use of plug-in hybrid electric and zero emission vehicles in the state. See the LEV III Program website for more information.

(Reference California Code of Regulations Title 13, Section 1961-1961.1)

Zero Emission Vehicle (ZEV) Production Requirements

New passenger cars, light-duty trucks, and medium-duty passenger vehicles are certified as ZEVs if the vehicles produce zero exhaust emissions of any criteria pollutant (or precursor pollutant) under any and all possible operational modes and conditions. Manufacturers with annual sales greater than 60,000 vehicles must produce and deliver for sale in California a minimum percentage of ZEVs for each model year as follows:

Model Year	Minimum ZEV Requirement
2010-2011	11%
2012-2014	12%
2015-2017	14%
2018 and on	16%

Manufacturers with annual sales between 4,501 and 60,000 vehicles may comply with the ZEV requirements through multiple alternative compliance options that include producing low emission vehicles and obtaining ZEV credits. Manufacturers with annual sales of 4,500 vehicles or less are not subject to this regulation.

As of October 2011, the California Air Resources Board is considering changes to the ZEV regulations that focus on plug-in hybrid electric vehicles and ZEVs to encourage commercial market penetration of these vehicles. See the ZEV Program website for more information.

(Reference California Code of Regulations Title 13, Section 1962.1)

Alternative Fuel and Plug-in Hybrid Electric Vehicle Retrofit Regulations

Converting a vehicle to operate on an alternative fuel in lieu of the original gasoline or diesel fuel is prohibited unless the California Air Resources Board (ARB) has evaluated and certified the retrofit system. ARB will issue certification to the manufacturer of the system in the form of an Executive Order once the manufacturer demonstrates compliance with the emissions, warranty, and durability requirements. A manufacturer is defined as a person or company who manufactures or assembles an alternative fuel retrofit system for sale in California; this definition does not include individuals wishing to convert vehicles for personal use. Individuals interested in converting their vehicles to operate on an alternative fuel must ensure that the alternative fuel retrofit systems used for their vehicles have been ARB certified. For more information, see the ARB Alternative Fuel Retrofit System website.

A hybrid electric vehicle that is Model Year 2000 or newer and is a passenger car, light-duty truck, or medium-duty vehicle may be converted to incorporate off-vehicle charging capability if the manufacturer demonstrates compliance with emissions, warranty, and durability requirements. ARB issues certification to the manufacturer and the vehicle must meet California emissions standards for the model year of the original vehicle.

(Reference California Code of Regulations Title 13, Section 2030-2032, and California Vehicle Code 27156)

Fleet Vehicle Procurement Requirements

When awarding a vehicle procurement contract, every city, county, and special district, including school and community college districts, may require that 75% of the passenger cars and/or light-duty trucks acquired be energy-efficient vehicles. By definition, this includes hybrid electric vehicles and alternative fuel vehicles that meet California's advanced technology partial zero emission vehicle (AT PZEV) standards. Vehicle procurement contract evaluations may consider fuel economy and lifecycle factors for scoring purposes. (Reference California Public Resources Code 25725-25726)

Vehicle Acquisition and Petroleum Reduction Requirements

The California Department of General Services (DGS) is responsible for maintaining specifications and standards for passenger cars and light-duty trucks that are purchased or leased for state office, agency, and department use. These specifications include minimum vehicle emissions standards and encourage the purchase or lease of fuel-efficient and alternative fuel vehicles (AFVs). On an annual basis, DGS must compile information including, but not limited to, the number of AFVs and hybrid electric vehicles acquired, the locations of the alternative fuel pumps available for those vehicles, and the total amount of alternative fuels used.

Vehicles the state owns or leases that are capable of operating on alternative fuel must operate on that fuel unless the alternative fuel is not available. Additionally, the California State and Consumer Services Agency, in consultation with DGS and other appropriate state agencies, must develop, implement, and submit to the California Legislature and governor a plan to increase the state fleet's use of alternative fuels, synthetic lubricants, and fuel-efficient vehicles. This must be done by reducing or displacing the fleet's consumption of petroleum products by 10% by January 1, 2012, and 20% by January 1, 2020, as compared to the 2003 consumption level. DGS must also take steps to transfer vehicles between agencies and departments to ensure that the most fuel-efficient vehicles are used and to eliminate the least fuel-efficient vehicles from the state's motor vehicle fleet. DGS must submit annual progress reports to the California Department of Finance, related legislative committees, and the general public via the DGS website.

(Reference Executive Order S-14-09, 2009, and California Public Resources Code 25722.5, 25722.6, and 25722.8)

Alternative Fuel and Vehicle Policy Development

The California Energy Commission must prepare and submit an Integrated Energy Policy Report (IEPR) to the governor on a biannual basis. The IEPR provides an overview of major energy trends and issues facing the state, including those related to transportation fuels, technologies, and infrastructure. The IEPR also examines potential effects of alternative fuels use, vehicle efficiency improvements, and shifts in transportation modes on public health and safety, the economy, resources, the environment, and energy security. The IEPR's primary purpose is to develop energy policies that conserve resources, protect the environment, ensure energy reliability, enhance the state's economy, and protect public health and safety. (Reference California Public Resources Code 25302)

Mobile Source Emissions Reduction Requirements

Through its Mobile Sources Program, the California Air Resources Board has developed programs and policies to reduce emissions from on-road heavy-duty diesel vehicles through the installation of verified diesel emission control strategies (VDECS) and vehicle replacements.

An on-road heavy-duty diesel vehicle rule requires the retrofit and replacement of nearly all privately owned vehicles operated in California with a gross vehicle weight rating (GVWR) greater than 14,000 pounds. School buses owned by private and public entities and federal government owned vehicles are also included in the scope of the rule. The requirements phase in the installation of VDECS on certain heavier in-use vehicles beginning January 1, 2012, and require the replacement of older vehicles starting January 1, 2015. By January 1, 2023, nearly all vehicles must have engines certified to the 2010 engine standard or equivalent. A drayage/port truck rule regulates heavy-duty diesel-fueled vehicles that transport cargo to and from California's ports and intermodal rail facilities. The rule requires that certain drayage trucks be equipped with VDECS and that all applicable vehicles have engines certified to the 2007 emissions standards by January 1, 2014. A public transit agency fleet rule regulates public transit fleets and sets emissions reduction standards for new transit vehicles. A solid waste collection vehicle rule regulates solid waste collection vehicles with a gross vehicle weight rating of 14,000 pounds or more that operate on diesel fuel, have 1960 through 2006 engine models, and collect waste for a fee. The fleet rule for public agencies and utilities requires fleets to install VDECS on vehicles or purchase vehicles that run on alternative fuels or use advanced technologies to achieve emissions requirements by specified implementation dates.

A summary of Requirements for Diesel Truck and Equipment Owners can be found in the Multi-Rule Summary Fact Sheet. (Reference California Code of Regulations Title 13, 2021-2027)