Medium- and Heavy-Duty Vehicles Grant Program

Mark Finlay, Senior Energy Analyst, TDEC Office of Energy Programs, Mark.Finlay@tn.gov,615-772-6011, or Hannah Carroll, Grants Program Coordinator, TDEC Office of Energy Programs, Hannah.Carroll@tn.gov, 615-571-0333.

The TDEC Online Grants System requires applicants to affiliate with an organization (on whose behalf an individual is submitting the request for funds) prior to opening a grant application. Grantees under this program will need to take legal title to all equipment or motor vehicles purchased totally or in part with funds provided under the corresponding Grant Contract. As such, the organization that the applicant affiliates with must be the organization that will oversee the implementation of the project and own the vehicles to be purchased under the Grant Contract.

If an applicant is trying to affiliate with an organization that is not currently registered within the State system, please follow the instructions on this page to register and subsequently affiliate with the entity.

Please contact TDEC.Grants@tn.gov  for more information on this process.

The application must contain an estimate of the expected lifetime NOx emissions reduction for each proposed Medium- or Heavy-Duty Vehicle replacement or Repower, calculated using the Argonne National Laboratory Heavy-Duty Vehicle Emissions Calculator.

It is recommended that applicants utilize the Medium- and Heavy-Duty Vehicle Grant Programs Vehicle Information Checklist, which helps applicants verify whether they have compiled and submitted all requested information for each Medium- or Heavy-Duty Vehicle they are requesting funds to replace or Repower. This includes step-by-step instructions on how to calculate emissions reduction estimates for each eligible type of Medium- and/or Heavy-Duty Vehicle project.

Awarded Grantees must submit quarterly reports to include updates on procurement, vehicle operator training, Repower status, and refueling infrastructure until the grant-funded Medium- and Heavy-Duty Vehicles are purchased, delivered, and put into service; Repowered and put into service (if applicable); and the engines and/or vehicles to be Repowered or replaced are Scrapped. Such reports shall include a complete description of the status of the project (including actual or projected termination date), development, implementation, and any modification. Quarterly reports shall be due no later than January 10, April 10, July 10, and October 10 of each year of the Grant Contract term.

Grantees will be required to submit annual reports for a period of five years following vehicle procurement, delivery, and the placement of vehicles into service. Such reporting shall include the demonstrated usage of fuel in purchased vehicles, the number of diesel gallon equivalents (DGEs), gallons, or kWh purchased, purchase price, refueling locations, miles driven, driving or route habits, metrics regarding emissions reductions, and savings or cost avoidance.

Grantees must submit a final project report within three months of the completion of the grant period. (Please note that this report may be combined with the annual report for the final year of the grant period.) In addition to the information requested for the annual report, the final project report must also include cumulative financial information to match the final reimbursement request as well as inventory documentation for all equipment or vehicles purchased with funding through the Grant Contract. The inventory documentation must include, at a minimum, the following:

a. Description of the equipment or vehicles;

b. Manufacturer’s serial number or other identification number, when applicable;

c. Consecutive inventory equipment or vehicles tag identification;

d. Acquisition date, cost, and check number;

e. Fund source, State Grant number, or other applicable fund source identification;

f. Percentage of state funds applied to the purchase;

g. Location within the Grantee’s operations where the equipment or vehicles are used;

h. Condition of the property or disposition date if Grantee no longer has possession;

i. Depreciation method, if applicable; and

j. Monthly depreciation amount, if applicable.

Failure to submit quarterly, annual, or final reports may result in the required refund of any and all payments made to the Grantee by the State.

Grantees will use quarterly, annual, and final report templates provided by TDEC. These templates will be referenced in the Grant Contract and will be attached to the corresponding Grant Programs Manual.

Grantees will be responsible for providing all the information required to complete the reports.

Applicants must select the county/s where the replacement or Repowered vehicle(s) will operate. If vehicles are expected to operate in multiple counties, applicants must detail the expected breakout in percentage of time that the vehicle(s) will operate in each county and provide supporting documentation to justify this breakout (e.g., driving routes of vehicles to be replaced and/or Repowered). Medium- and Heavy-Duty Vehicles must operate in Tennessee counties for 70% or more of the time to be eligible for replacement or Repower.

During application evaluation, TDEC may select portions of a proposal for funding and may offer to fund less than the eligible grant amounts and/or a smaller amount than requested in the application.

The Grantee will have 24 months from the effective date of the Grant Contract to complete the project. The Grantee may proceed with its project after it is notified by the State that its Grant Contract has been fully approved.

Yes. The Grantee can request multiple reimbursements from the State to accommodate Medium- and Heavy-Duty Vehicle purchases or Repowers made over multiple fiscal years and/or as a result of multiple purchase orders or vendor contracts. However, the Grantee will have no more than 24 months from the effective date of the Grant Contract to complete the project (i.e., place the Medium- and/or Heavy-Duty Vehicles in service).

If an applicant plans to purchase or Repower Medium- and Heavy-Duty Vehicles over multiple fiscal years and/or through multiple purchase orders or vendor contracts, please detail this information within the “Project Timeline” section of the online application under the “Applicant Project Information” tab.

Grantees under the Medium- and Heavy-Duty Vehicle Grant Program will have 24 months from the effective date of the Grant Contract to complete the project (i.e., purchase/Repower vehicles, put new/Repowered vehicles into service, acquire and install any associated charging infrastructure, Scrap old vehicles, complete monitoring visits, request reimbursement, submit required reporting, etc.).

Applicants must provide detailed cost estimates from potential vehicle/equipment vendors to support their applications under the Medium- and Heavy-Duty Vehicle Grant Programs. When reaching out to vendors to secure said cost estimates, applicants should also confirm whether their proposed vendor’s vehicle production and delivery timeline fits within the 24-month grant period. Applicants should complete the “Project Timeline” section of the “Applicant Project Information” tab accordingly, to inform the State of the anticipated vehicle production and delivery timeline.

Please note that the State may evaluate requests for no-cost extensions to complete the project on a case-by-case basis; such requests must be received at least 90 days prior to the end of the Grant Contract term.

Payment of project expenses will take place on a reimbursement basis. The Grantee must purchase or Repower the vehicle(s) and submit required invoice documentation before payment can occur. TDEC will not reimburse expenses that are incurred prior to the start date of the Grant Contract.

TDEC will pay correct and complete invoices within 30 (thirty) days of receipt. TDEC will work with Grantees to ensure that they are submitting correct and complete invoices along with all necessary supporting documentation.

Grantees will be required to obtain a vendor identification number and will need to submit a Form W-9, Request for Taxpayer Identification Number and Certification. Grantees will also be required to submit bank information via an original Automated Clearing House (ACH) form in order to receive grant reimbursements electronically. The ACH form must be signed by an authorized account representative and a representative of the associated financial institution.

To consider the potential beneficial impact of selected projects on air quality in areas that bear a disproportionate share of the air pollution burden, the State has developed a “Disproportionate Burden Index” (DBI), which combines environmental, economic, and demographic datasets in a geospatial format to determine geographic units in Tennessee that have the highest air quality burden. Given that disproportionate burden is relative to the location of a project, TDEC will utilize the DBI and its geospatial display during the proposal review phase to assist with project prioritization and selection, focusing on the location and/or service area of the proposed project. For more information on the DBI, refer to Section VI. Consideration of Disproportionate Burden and Appendix 7 – Identification of Areas that Bear a Disproportionate Share of Air Pollution of the State of Tennessee’s Beneficiary Mitigation Plan. (See pages 8-9 of the Medium- and Heavy-Duty Vehicle Grant Program Application Manual  for more information.)

In addition to the above-mentioned criteria, projects will be evaluated, in part, on the following additional criteria (see page 9 of the Medium- Heavy-Duty Vehicle Grant Programs Application Manual for more information):

• Expected NOx emission reductions from the proposed project;
• Cost-effectiveness of the project;
• Whether the vehicles will operate primarily in a former nonattainment area for Ozone and/or PM 2.5 NAAQS;
• Whether the vehicles will operate primarily in a Distressed county;
• Potential impact to vulnerable populations or populations affected by a disproportionate share of the air pollution burden, evaluated using the DBI and any additional information provided by the applicant;
• Community benefits to be achieved as a result of the project, including whether the project will strengthen emergency preparedness and resiliency of the transportation sector through diversity of fuel and project types; and
• Whether the project will result in the establishment of a new refueling station or an expanded refueling station such that the station will have expanded fueling capacity installed during the period of performance, including expanded fuel storage, increased compressor capacity, or increased fueling rate.

Yes! TDEC urges all eligible applicants to apply.

Both Government and Non-Government entities are eligible. Government and/or Non-Government entities must be located and/or have a physical presence in Tennessee.

“Government” shall mean a State or local government agency (including a school district, municipality, city, county, special district, transit district, joint powers authority, or port authority, owning fleets purchased with government funds), and a tribal government or native village. The term “State” means the several States, the District of Columbia, and the Commonwealth of Puerto Rico.

Medium- and Heavy-Duty Vehicles eligible for replacement or Repower include 1992–2009 engine model year or older Class 4-7 Local Freight Trucks (Gross Vehicle Weight Rating [GVWR] between 14,001 lbs. and 33,000 lbs.) used to deliver Cargo and Freight, Class 8 Local Freight Trucks and Port Drayage Trucks (GVWR greater than 33,000 lbs.) used for port drayage and/or freight/cargo delivery and Class 4-8 Transit, Shuttle, and School Buses (GVWR) greater than 14,001 lbs.) used for transporting people. For purposes of this solicitation, “Transit Buses” shall include all vehicles that provide public transportation, which shall mean regular and continuing shared-ride surface transportation services that are open to the general public. “Shuttle Buses” shall include vehicles that provide transportation services for one or more specific entities, intra-terminal or intra-facility transportation services, or mobility-on-demand services. “Drayage Trucks” shall mean trucks hauling cargo to and from ports and intermodal rail yards. 

TDEC has developed the following additional definitions for purposes of administering the Medium and Large Truck Grant Program:

• “Cargo and Freight” shall mean goods transported in bulk; raw materials, feedstocks, and other commodities; heating and transportation fuels; construction materials; residential, commercial, and industrial waste; residential, commercial, and industrial goods transported via established moving services; mail and other packages; equipment that enables emergency response and other public services; and any other items that must be transported via truck to support commerce and safety.
• “Local” shall refer to vehicles that operate in Tennessee counties for 70% or more of the time.
• “Port” shall refer to facilities along navigable water for the loading and unloading of cargo from ships; places from which aircraft operate that have paved runways and passenger and cargo terminals which include baggage-movement and passenger transit operations; or nodes in the larger goods movement supply chain, to include cruise terminals, bulk terminals, container terminals, and intermodal container transfer facilities. 

Eligible Medium- and Heavy-Duty Vehicles may be Repowered with any new All-Electric and/or Alternate Fueled engine or may be replaced with any All-Electric or Alternate Fueled vehicle with the engine model year in which the Repower or replacement occurs or one engine model year prior.

• “Repower” shall mean to replace an existing engine with a newer, cleaner engine or power source that is certified by EPA and, if applicable, CARB, to meet a more stringent set of engine emission standards. Repower includes but is not limited to, diesel engine replacement with an engine certified for use with a clean alternate fuel. All-Electric and fuel cell Repowers do not require EPA or CARB certification. 

Bi-fuel engines and vehicles will be considered on a case-by-case basis for Emergency Response Vehicles only. 

• "Bi-fuel” shall mean an engine or motor vehicle that is capable of operating on gasoline or diesel fuel in addition to another type of fuel, such as natural gas or propane. Both fuels are stored on board, and the driver can switch between the fuels. The vehicle is equipped with fuel tanks, fuel injection systems, and fuel lines for both fuels. All bi-fuel vehicles will be required to utilize the alternative fuel for no less than 70% of the vehicle’s fuel use for a period of no less than five years.
• “Emergency Response Vehicle” shall mean any vehicle that is designated and authorized to respond to an emergency situation that threatens or negatively impacts public health, safety, and welfare. These vehicles are usually operated by designated government agencies or first responders (including fire, police, and emergency medical personnel), but may also be operated by charities, non-governmental organizations, and some commercial companies. Examples of emergency response vehicles include police cars, firetrucks, ambulances, and other similar on-road vehicles necessary for transporting first responders, other emergency services personnel, patients, and equipment in times of emergency.

 Eligible Medium- and Heavy-Duty Vehicle replacements and/or Repowers must be purchased new, from an original equipment manufacturer (OEM) or OEM-authorized dealer. For all vehicle replacement projects, if the new Medium- and Heavy-Duty Vehicles shall be Alternate Fueled or All-Electric, it shall be fully equipped by the manufacturer or by a third party at the direction of the manufacturer to operate on an alternative fuel or electricity prior to the initial purchase and registration of the vehicle.

 TDEC will allow the replacement or Repower of eligible Medium- and Heavy-Duty Vehicles that are leased out, so long as the entity applying to receive funds (1) takes full title to and ownership of the vehicles, and (2) the new vehicles will be leased to Tennessee-based operators who will use the vehicles for the duration of the grant’s five-year annual reporting period, to begin following vehicle procurement, delivery, and the placement of vehicles into service. In the event that a vehicle lease contract between the applicant and a Medium- and Heavy-Duty Vehicle operator is not renewed within the grant’s five-year reporting period, the owner must place the replacement or Repowered Medium- and Heavy-Duty Vehicles within another Medium- and Heavy-Duty Vehicle fleet in Tennessee and continue to report on related metrics (e.g., actual fuel usage, mileage of the grant-funded vehicles, etc.) for the remainder of the five-year reporting period. In the event the owner is unable to continue to operate the Medium- and Heavy-Duty Vehicles within a Tennessee fleet, that owner shall reimburse the State for the pro rata amount of the residual value, based on the State’s original contribution to the purchase price.

Medium- and Heavy-Duty Vehicles eligible for replacement or Repower include 1992–2009 engine model year or older Class 4-7 Local Freight Trucks (Gross Vehicle Weight Rating [GVWR] between 14,001 lbs. and 33,000 lbs.) used to deliver Cargo and Freight, Class 8 Local Freight Trucks and Port Drayage Trucks (GVWR greater than 33,000 lbs.) used for port drayage and/or freight/cargo delivery and Class 4-8 Transit, Shuttle, and School Buses (GVWR) greater than 14,001 lbs.) used for transporting people.

The intent is for entities to replace vehicles with vehicles of a similar weight class, in order to ensure as much of a one-to-one NOx mitigation as possible. Vehicles of different weight classes may have different duty cycles and/or varying engine sizes, both of which impact a vehicle’s emissions profile. Consequently, it can be difficult to verify emissions reduction estimates for projects where a vehicle is replaced with a new vehicle of a different GVWR. That being said, if an entity would like to propose to replace a vehicle with a similar vehicle of a different weight class, they will need to provide a justification as to why a vehicle of a different weight class is appropriate.

Scrappage of an identical number of similar vehicles or engines is required.  (If vehicles, engines, or equipment are added to a fleet without removing a dirtier, older engine of a similar size or larger, then the project would not result in NOx reductions.)

Eligible Medium- and Heavy-Duty Vehicle replacements and/or Repowers must be purchased new, from an original equipment manufacturer (OEM) or OEM-authorized dealer. For all vehicle replacement projects, if the new Medium- and/or Heavy-Duty Vehicle shall be Alternate Fueled or All-Electric, it shall be fully equipped by the manufacturer or by a third party at the direction of the manufacturer to operate on an alternative fuel or electricity prior to the initial purchase and registration of the vehicle.

TDEC will allow the replacement or Repower of eligible Medium- and Heavy-Duty Vehicle that are leased out, so long as the entity applying to receive funds 1) takes full title to and ownership of the vehicles, and 2) the new vehicles will be leased to Tennessee-based operators who will use the vehicles for the duration of the grant’s five-year annual reporting period, to begin following vehicle procurement, delivery, and the placement of vehicles into service. In the event that a vehicle lease contract between the applicant and a Medium- and Heavy-Duty Vehicle operator is not renewed within the grant’s five-year reporting period, the owner must place the replacement or Repowered Medium- and Heavy-Duty Vehicle within another Medium- and Heavy-Duty fleet in Tennessee and continue to report on related metrics (e.g., actual fuel usage, mileage of the grant-funded vehicles, etc.) for the remainder of the five-year reporting period. In the event the owner is unable to continue to operate the Medium- and Heavy-Duty Vehicle within a Tennessee fleet, that owner shall reimburse the State for the pro rata amount of the residual value, based upon the State’s original contribution to the purchase price.

Only vehicles purchased within the period of performance of a fully executed and approved Grant Contract shall be eligible for reimbursement. No credit will be given for costs incurred prior to the grant period of performance.

Yes, eligible vehicles must operate in Tennessee counties for 70% or more of the time to be considered "Local".

“Local” shall refer to vehicles that operate in Tennessee counties for 70% or more of the time.

Yes. However, eligible Medium- and Heavy-Duty Vehicles must be registered within the State of Tennessee or registered within the International Registration Plan (IRP).

No. However, the Medium- and Heavy-Duty Vehicle Program can fund up to 75% of the cost of an Eligible Medium- and/or Heavy-Duty Vehicle replacement or Repower for Government Owned Alternate-Fueled projects and up to 90% for All-Electric projects that will operate 70% or more of the time in current or former nonattainment areas for Ozone and/or PM2.5 National Ambient Air Quality Standards (NAAQS). The Medium- and Heavy-Duty Vehicle Grant Programs will fund up to 50% of the cost of an Eligible Medium- and/or Heavy-Duty Vehicle replacement or Repower for all other Government Owned Alternate Fueled projects and up to 75% of the cost of eligible All-Electric projects.

To see which counties qualify for the higher funding cap, please visit EPA’s “Tennessee Nonattainment/Maintenance Status for Each County by Year for All Criteria Pollutants” webpage. Please note that only portions of Roane and Cocke counties are designated as current or former nonattainment areas for Ozone and/or PM2.5 NAAQS. Within Roane County, this includes the area described by U.S. Census 2000 block group identifier 47-145-0307-2, and within Cocke County, this includes the area covering Great Smoky Mountains National Park.

No, replacement or Repower of vehicles with a new diesel vehicle or engine is not eligible.

No, replacement and/or Repower with a new diesel vehicle or engine is not an eligible project under the Medium- and Heavy-Duty Vehicle Grant Program. Eligible Medium- and Heavy-Duty Vehicles may be replaced with an Alternate Fueled or All-Electric vehicle. Repowers of Medium- and Heavy-Duty Vehicles with any new Alternate Fueled or All-Electric engine shall also be considered eligible. According to Appendix D-2 of the State Trust Agreement, “Alternate Fueled” shall mean an engine, or a vehicle or piece of equipment that is powered by an engine, which uses a fuel different from or in addition to gasoline fuel or diesel fuel (e.g., CNG, propane, diesel-electric Hybrid). A replacement of an eligible diesel vehicle with a gasoline-electric Hybrid Medium- and/or Heavy-Duty Vehicle would be considered eligible under these grant programs. A replacement with a bus that is able to operate on gasoline alone would not be considered eligible under this grant program.

No, replacement or Repower of vehicles that are no longer operable is not eligible.

Yes, TDEC will provide funding for a maximum of 15 vehicle replacements or Repowers per applicant for All-Electric projects and 15 vehicle replacements or Repowers per applicant for Alternate Fueled projects.

All eligible Medium- and Heavy-Duty Vehicles to be replaced must be Scrapped within ninety (90) days of new vehicle delivery. Engines from eligible Medium- and Heavy-Duty Vehicles to be Repowered must be Scrapped within ninety (90) days of vehicle Repower (if the applicant will perform the Repower) or within ninety (90) days of Repowered vehicle delivery (if an external, third-party will perform the Repower). “Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to specifically cut a 3-inch hole in the engine block for all engines. If any eligible Medium- and Heavy-Duty Vehicle is replaced as part of an eligible project, Scrapped shall also include the disabling of the chassis by cutting the vehicle’s frame rails completely in half. Scrappage of all replaced or Repowered Medium- and Heavy-Duty Vehicles is required by the State Trust Agreement.

Grantees selected for funding under the Medium- and Heavy-Duty Vehicle Grant Program will also be required to secure a Non-Repairable Certificate for each replaced vehicle, which prevents the vehicle from being titled or registered in the State of Tennessee following scrappage. To obtain a Non-Repairable Certificate, a vehicle owner can mail a completed application to the Tennessee Department of Revenue, Special Investigations, Anti-theft Unit. There is no cost to obtain a Non-Repairable Certificate.

Grantees will be required to submit photo documentation of scrappage, along with an executed scrappage certification letter and a non-repairable certificate. Additional information on supporting documentation for scrappage will be provided to Grantees within the Grant Program Manual.

All eligible Medium- and Heavy-Duty Vehicles to be replaced must be Scrapped within ninety (90) days of new vehicle delivery. Engines from eligible Medium- and Heavy-Duty Vehicles to be Repowered must be Scrapped within ninety (90) days of vehicle Repower (if the applicant will perform the Repower) or within ninety (90) days of Repowered vehicle delivery (if an external, third-party will perform the Repower). “Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to specifically cut a 3-inch hole in the engine block for all engines. If any eligible Medium- and/or Heavy-Duty Vehicle will be replaced as part of an eligible project, Scrapped shall also include the disabling of the chassis by cutting the vehicle’s frame rails completely in half. Scrappage of all replaced or Repowered Medium- and Heavy-Duty Vehicles is required by the State Trust Agreement.

Grantees selected for funding under the Medium- and Heavy-Duty Vehicle Program will also be required to secure a Non-Repairable Certificate for each replaced vehicle, which prevents the vehicle from being titled or registered in the State of Tennessee following scrappage. To obtain a Non-Repairable Certificate, a vehicle owner can mail a completed application to the Tennessee Department of Revenue, Special Investigations, Anti-theft Unit. There is no cost to obtain a Non-Repairable Certificate.

Grantees may perform the required scrappage themselves if they have the facilities and means available to them to meet all scrappage requirements. Grantees may also utilize external services to comply with scrappage requirements. In either instance, required supporting documentation and proof of scrappage must still be submitted to the State before reimbursement can occur. Please note that, under Appendix D-2 of the State Trust Agreement, “Scrapped” shall mean to render inoperable and available for recycle, and, at a minimum, to specifically cut a 3-inch hole in the engine block for all engines. If any Eligible Vehicle will be replaced as part of an Eligible project, Scrapped shall also include the disabling of the chassis by cutting the vehicle’s frame rails completely in half.

Grant funding shall not cover costs associated with scrappage of eligible Medium- and Heavy-Duty Vehicle and/or engines. If a Grantee receives money in return for scrapping a vehicle or engine, they may apply said funds toward the required cost share. 

Scrappage is required by the State Trust Agreement. Please refer to Appendix D-2 of the State Trust Agreement for more information on scrappage requirements.

For selected, eligible Medium- and Heavy-Duty vehicle projects, the program will provide:

• Up to 25% of the cost of a Repower or replacement for Non-Government Owned Alternate Fueled projects;
• Up to 50% of the cost of a Repower or replacement for Government Owned Alternate Fueled projects;
• Up to 75% of the cost of a Repower or replacement for Government Owned Alternate Fueled projects that will operate 70% or more of the time in current or former nonattainment areas for Ozone and/or PM2.5 National Ambient Air Quality Standards (NAAQS)(For purposes of this Program, an area must be currently or formerly in nonattainment for Ozone and/or PM2.5 NAAQS as of the date of the solicitation release (April 2, 2025) in order to be treated as a current or former nonattainment area during the application evaluation process. A comprehensive list of nonattainment/maintenance status for Tennessee counties by year may be accessed here.);
• Up to 75% of the cost of a Repower or replacement for Government Owned Alternate Fueled projects that will operate 70% or more of the time in Distressed Counties (Distressed Counties are defined as those counties that rank amongst the 10% most economically distressed counties in the nation based on a three-year average unemployment rate, per capita market income, and poverty rate. Distressed County designations are updated each State Fiscal Year. For purposes of this Program, a county must be designated as Distressed in Fiscal Year 2025 in order to be treated as a Distressed County during the application evaluation process. As of Fiscal Year 2025, Tennessee has 9 Distressed Counties. A comprehensive list of Distressed Counties for Fiscal Year 2025 may be accessed here.);
• Up to 50% of the cost of a Repower or replacement for Non-Government Owned All-Electric projects;
• Up to 75% of the cost of a Repower or replacement for Government Owned All-Electric projects;
• Up to 90% of the cost of a Repower or replacement for Government Owned All-Electric projects that will operate 70% or more of the time in current or former nonattainment areas for Ozone and/or PM2.5 National Ambient Air Quality Standards (NAAQS);
• Up to 90% of the cost of a Repower or replacement for Government Owned All-Electric projects that will operate 70% or more of the time in Distressed Counties;
• For All-Electric projects, up to 50% of the acquisition and installation costs for associated charging infrastructure (All-Electric infrastructure costs) for Non-Government Owned projects, up to 75% of the All-Electric infrastructure costs for Government Owned projects, and up to 90% of the All-Electric infrastructure costs for Government Owned, All-Electric projects located in Distressed County or current or former Non-Attainment Areas.

Eligible costs under this Program are limited to (1) the purchase costs of eligible Medium- and Heavy-Duty Vehicle, (2) the cost of eligible Medium- and Heavy-Duty Vehicle Repowers, including the cost of engine, tank, and/or other parts installation, and (3) the acquisition and installation costs for associated All-Electric infrastructure, if applicable.

• The total purchase cost of eligible Medium- and Heavy-Duty Vehicles may include required costs to acquire the vehicle(s), such as taxes and delivery fees.
• Non-engine equipment costs associated with the Repower of a vehicle (e.g., the cost of battery packs for an All-Electric project, the cost of a fuel tank for a compressed natural gas project, etc.) shall be considered eligible for reimbursement.
• Costs not integral to Medium- and Heavy-Duty Vehicle function (e.g., idle reduction technologies, optional diesel aftertreatment devices, etc.) cannot be considered eligible for reimbursement. Cost estimates provided as supporting documentation along with the application must detail any such costs in an itemized fashion. (Please refer to Appendix A to view a sample cost estimate).
• Grant funding shall not cover costs associated with scrappage of eligible Medium- and Heavy-Duty Vehicles and/or engines. If a Grantee receives money in return for scrapping a vehicle or engine, they may apply said funds toward the required cost share.

Under this solicitation, $19,481,396.11 in EMT funding is available for eligible Medium- and Heavy-Duty Alternate Fueled and/or All-Electric replacement vehicle projects. Eligible applicants are limited to one application each. Medium- and Heavy-Duty vehicles eligible for replacement or Repower include Class 4-7 Local Freight Trucks (Medium Truck), Class 8 Local Freight Trucks and Port Drayage Trucks (Large Truck), Class 4-8 Transit and Shuttle, and Class 4-8 School Buses. Entities may apply for funds in more than one of the four eligible EMA vehicle categories and/or fuel types (diesel-fueled vehicles not included). The terms and conditions of the program are outlined in this Application Manual. For purposes of administering this Program according to the procedures established by the VW Settlement EMT State Trust Agreement, TDEC will prompt applicants to clearly distinguish their projected costs, emissions reduction benefits, and other required documentation by EMA category (Medium Truck, Large Truck, Transit Bus & Shuttle Bus, and School Bus) within the online application.

Eligible Medium- and Heavy-Duty Vehicle(s) may be replaced with an Alternate Fueled or All-Electric vehicle(s) (replacement with new diesel vehicles will not be eligible under this solicitation). Repowers of Medium- and Heavy-Duty Vehicles with any new Alternate Fueled or All-Electric engine shall also be considered eligible.

 For All-Electric Medium- and Heavy-Duty Vehicle projects, TDEC will provide funding to support a maximum of 15 Medium- and Heavy-Duty Vehicle replacements or Repowers per applicant. “All-Electric” shall mean powered exclusively by electricity provided by a battery, fuel cell, or the grid. Additionally, requests for funding of All-Electric Medium- and Heavy-Duty Vehicle projects, including associated All-Electric infrastructure costs, may not exceed $3,000,000 per applicant.

 For Alternate Fueled Medium- and Heavy-Duty Vehicle projects, TDEC will provide funding to support a maximum of 15 Medium- and Heavy-Duty Vehicle replacements or Repowers per applicant. “Alternate Fueled” shall mean an engine, or a vehicle or piece of equipment that is powered by an engine, which uses a fuel different from or in addition to gasoline fuel or diesel fuel (e.g., CNG, propane).

Additionally, requests for funding of Alternate Fueled Medium- and Heavy-Duty Vehicle projects may not exceed $1,500,000 per applicant. Funding requests comprised of both All-Electric and Alternate Fueled Medium- and Heavy-Duty Vehicle projects, including associated All-Electric infrastructure costs, may not exceed $3,000,000 per applicant.

Eligible applicants are limited to one application each. Applications may include a variety of vehicle and/or fuel types. The terms and conditions of the Program are outlined in the Application Manual.

Please state in your application that you are attempting to secure cost share from another, external funding source (e.g., the Congestion Mitigation and Air Quality Improvement Program, etc.). You must identify the source of this funding and indicate when your organization expects to hear back from the program with a final funding decision. Additionally, please identify an additional source of capital to be leveraged by your organization to complete the proposed Medium- and Heavy-Duty Vehicle project if the external funding source declines to support your proposal. If you have already received cost-share commitments from other funding programs to support potential projects under the Medium- and Heavy-Duty Vehicle Grant Programs, please provide documentation from the external funder(s) noting the amount and scope of the project funding to be received.

Note that funding provided under the Medium- and Heavy-Duty Vehicle Grant Program is sourced entirely from the VW Settlement EMT and is therefore not considered to be federal or State dollars for purposes of cost share restrictions. If you seek support from an external funding source as cost share for projects under the Medium- and Heavy-Duty Vehicle Grant Programs, you must confirm with said external funding source that their contribution can be combined with funding under the VW EMT.