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Fleet operators diversify powertrains as federal EV incentives expire

Fleet managers are broadening their drivetrain strategies amid significant policy reversals that have reshaped the vehicle acquisition landscape. The expiration of federal tax credits valued up to $40,000 per medium- and heavy-duty zero-emission unit, combined with rollbacks of greenhouse gas standards and California clean truck rules, has created uncertainty around purchasing decisions.

Despite federal pullbacks, state and local incentive programs continue supporting alternative fuels through 2028, with over $5 billion annually available. California maintains roughly $1 billion in grants for trucks and buses, plus $592 million in vouchers for zero-emission vehicles.

Natural gas engines gained traction, with the Cummins X15N reporting 71% cost savings versus diesel among operators and 59% savings versus other natural gas vehicles. Battery-electric medium-duty registrations climbed 21% last year, delivering lower operating costs than replaced vehicles. Renewable diesel and biodiesel captured nearly three-quarters of California's transportation fuel market. Propane use expanded 8 million gallons annually, with school district adoption reaching 23,000 buses across 49 states.