Financing, state incentives and OEM support will play crucial roles in propelling EV truck adoption after President Donald Trump’s One Big Beautiful Act dealt a blow to the market.
While several industry trade groups have lauded the new legislation for restoring 100% bonus depreciation, it eliminated the federal Commercial Clean Vehicle Credit. The program, now set to expire Sept. 30, provides a tax credit of up to $40,000 for commercial EVs weighing 14,000 pounds or more.
Eliminating the credit not only exacerbates affordability challenges, it also signals a probable decline in domestic production of EV trucks and parts for them, Josh Green, chief executive of EV fleet management company Inspiration Mobility, told Equipment Finance News.
“You’re already seeing vehicle OEMs either pulling back on investments in new plants that were scheduled to open in the U.S., or you’re seeing existing plants kind of downgrade production.”
— Josh Green, CEO, Inspiration Mobility
Inspiration Mobility had been urging legislators to phase out the credit over a few years to minimize the impact of its removal, Green said, noting potential disruptions to long-term investment plans for some fleet operators.
“Now they have to kind of start from scratch because all the costs have changed,” he said.
Financing, state incentives key
As federal incentives dwindle under Trump, state programs are critical for the commercial EV market, Paul Gioupis, CEO of Los Angeles-based Zeem Solutions, an EV truck leasing, charging and solutions provider, told EFN.
Zeem Solutions recently partnered with the Northwest Seaport Alliance as part of a program, backed by a $6.2 million grant from Washington state, to offset high EV truck costs and develop a charging facility.
Grants such as this “send a strong signal to the public sector,” Gioupis said.
“When the public sector shows it’s willing to invest, it gives fleet operators, OEMs and charging providers the confidence to make their own investments.”
— Paul Gioupis, CEO, Zeem Solutions
In addition, declining federal incentives open “new opportunities for alternative financing models,” Gioupis said.
“Traditional lenders have historically been hesitant because of the unknowns — resale value, battery degradation and the lack of a secondary market,” he said. But new data “shows these vehicles perform well and save money. This will also help grow the second market of used electric commercial vehicles.”
Inspiration Mobility’s Green similarly said that states need to step up to ease affordability challenges, while acknowledging that state-to-state variance presents other challenges.
“It’s always worse for business when you have a patchwork of incentives and regulations to deal with,” he said. “New programs will roll out, but it is therefore complex for a fleet operator that is in more than one state to figure out.”
OEM support
Truck OEMs also must increase incentives or lower upfront costs to offset expiring EV tax credits, Green said.
Furthermore, the EV truck market would benefit if major OEMs devoted more time and resources toward driving adoption, Zeem’s Gioupis said.
“I don’t believe these OEMs are really serious about electrification,” he said. “You’ve got to bring the price of the vehicle down. … Why is China so competitive? Their battery costs are very, very low. … We have to innovate and do better.”
Tesla, which has said it plans to start production of heavy-duty trucks this year, could bolster the commercial EV market because they “eat, sleep, drink EV,” Gioupis said.
“As unpopular as Tesla is, they’ve got a truck that blows the ceiling off of every bit of other competition,” he said. “And what will happen is, the same way when they introduced their EV, everybody will rush pricing lower, in my opinion.”
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