Vehicle incentives are a vital component of a strong zero-emission ecosystem. Currently, the sticker price of zero-emission medium-and heavy-duty vehicles are well above those of their ICE counterparts. However, as the market rapidly matures, prices of key components like the battery and motor are expected to reach price parity between 2025 and 2030. In the interim, it is important that governments offer incentive programs that reduce the upfront cost of the vehicle to the end user. By stimulating demand in this way, more OEMs are encouraged to ramp up their production and R&D efforts which results in a positive feedback loop of cost reduction over the long term. The need for incentives must be prioritized early on and will naturally become less important over time as zero-emission vehicles achieve cost-competitiveness with ICE vehicles. Understanding the total cost of ownership (TCO) is another important metric where, beyond just comparing the list prices of a zero-emission and ICE vehicle, other capital and operational expenditures are quantified such as lifetime fueling and maintenance costs. In many regions today, especially those with favorable incentives, zero-emission vehicles have a lower TCO than comparable ICE vehicles.
For transparency and clarity, for a country to achieve the “maximum” eligibility, a country must:
- Establish nationwide and multi-year financial incentives for ZE-MHDVs
To receive “limited” eligibility a country must:
- Establish multi-year financial incentives for ZE-MHDVs at the regional level