Medium- and Heavy-Duty Vehicle Grant Program is sponsored by Tennessee Department of Environment and Conservation (TDEC). This grant program aims to replace or repower medium- and heavy-duty vehicles with cleaner, alternate-fueled, or all-electric options.

Medium- and Heavy-Duty Vehicles Grant Program Medium- and Heavy-Duty Vehicles Grant Program In 2026, the Tennessee Department of Environment and Conservation (TDEC) announced that 22 entities will receive $18. 9 million in total grant funding to replace eligible medium- and heavy-duty vehicles with alternate-fuel (e.g., propane, natural gas, hybrid) or all-electric vehicles (EVs).

A full list of the selected Grantees and their corresponding project information is available here (archive) .

Selected grantees include: Averitt Express, Inc; Bledsoe County Board of Education; Chattanooga Area Regional Transportation Authority; Clarksville Montgomery County School System; Crossroads Buslines, LLC; EPB of Chattanooga; City of Gruetli-Laager; Grundy County Board of Education; Hancock County School System; Hawkins County Schools; Henry Bus Lines; Hickman County School System; Highland Electric Fleets, Inc.; Jefferson County Government; Knoxville Utilities Board; City of McKenzie; City of Memphis; Nacarato Truck Centers; University of Tennessee, Knoxville; Washington County Department of Education; Waste Management of Tennessee, Inc.; and the Town of White Bluff.

The competitive Medium- and Heavy- Duty Vehicle Grant Program comprises the State’s fifth solicitation for projects under the Volkswagen Diesel Settlement Environmental Mitigation Trust (VW Settlement EMT). The purpose of the EMT is to execute environmental mitigation projects that reduce emissions of nitrogen oxides.

The 22 projects will involve the replacement of a total of 81 vehicles with 35 all-electric, 33 propane, 8 hybrid, and 5 compressed natural gas vehicles and will also support the installation of associated charging infrastructure for vehicles replaced with EVs. Of the selected vehicle replacement projects, 10 projects will take place in former nonattainment areas for ozone and/or fine particulates (PM2.

5) under National Ambient Air Quality Standards. Five projects will take place in counties recognized as economically distressed by the Appalachian Regional Commission for fiscal year 2026.

Medium- and Heavy-Duty Vehicle Grant Program materials are available in the tabs below, including the application and programs manuals, link to the application workshop recording, and a list of frequently asked questions (FAQ) regarding the funding opportunity. “All-Electric” shall mean powered exclusively by electricity provided by a battery, fuel cell, or the grid.

“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).

“Class 4-7 Local Freight Trucks (Eligible Medium Trucks)” shall mean trucks, including commercial trucks, used to deliver cargo and freight (e.g., courier services, delivery trucks, box trucks moving freight, waste haulers, dump trucks, concrete mixers) with a Gross Vehicle Weight Rating (GVWR) between 14,001 and 33,000 lbs.

“Class 8 Local Freight, and Port Drayage Trucks (Eligible Large Trucks)” shall mean trucks with a Gross Vehicle Weight Rating (GVWR) greater than 33,000 lbs. used for port drayage and/or freight/cargo delivery (including waste haulers, dump trucks, concrete mixers). “Class 4-8 School Bus, Shuttle Bus, or Transit Bus (Buses)” shall mean vehicles with a Gross Vehicle Weight Rating (GVWR) greater than 14,001 lbs.

used for transporting people. “Diesel Gallon Equivalent (DGE)” shall mean the amount of alternative fuel it takes to equal the energy content of one liquid gallon of diesel. “CNG” shall mean Compressed Natural Gas.

“Drayage Trucks” shall mean trucks hauling cargo to and from ports and intermodal rail yards. “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. “Gross Vehicle Weight Rating (GVWR)” shall mean the maximum weight of the vehicle, as specified by the manufacturer. GVWR includes total vehicle weight plus fluids, passengers, and cargo.

Class 3: 10,001-14,000 lb. Class 4: 14,001-16,000 lb. Class 5: 16,001-19,500 lb.

Class 6: 19,501-26,000 lb. Class 7: 26,001-33,000 lb. “Hybrid” shall mean a vehicle that combines an internal combustion engine with a battery and electric motor.

“Infrastructure” shall mean the equipment used to enable the use of electric powered vehicles (e.g., electric vehicle charging station). “Intermodal Rail Yard” shall mean a rail facility in which cargo is transferred from drayage truck to train or vice-versa.

“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 diesel or a clean alternate fuel, diesel engine replacement with an electric power source (e.g., grid, battery), diesel engine replacement with a fuel cell, diesel engine replacement with an electric generator(s) (genset), diesel engine upgrades in Ferries/Tugs with an EPA Certified Remanufacture System, and/or diesel engine upgrades in Ferries/Tugs with an EPA Verified Engine Upgrade.

All-Electric and fuel cell Repowers do not require EPA or CARB certification. “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.

TDEC has developed the following additional definitions for purposes of administering these Programs: “Bi-fuel” shall refer to 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.

“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.

“Diesel Gallon Equivalent (DGE)” shall mean the amount of alternative fuel it takes to equal the energy content of one liquid gallon of diesel. “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. “Grantee” shall mean an applicant that has an executed Grant Contract with TDEC. “Local” shall refer to vehicles that operate in Tennessee counties for 70% or more of the time.

“Original Equipment Manufacturer (OEM)” shall mean the entity that originally manufactures the engine or the vehicle for sale. “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.

“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.

“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.

To view a printable version of these definitions, refer to the Medium- and Heavy-Duty Vehicle Grant Program Application Manual (archive) . Alternative Fuel Vehicle Resources for Medium- and Heavy Duty Fleets: On May 7, 2025, TDEC OEP held a webinar to highlight resources available to medium- and heavy-duty fleets considering implementation of alternative fuel projects.

Both the webinar recording and the corresponding slide deck (archive) are available. Application Manual: All terms and conditions of the Medium- and Heavy-Duty Vehicles Grant Program are outlined in an application manual, accessible here: Medium- and Heavy-Duty Vehicles Grant Program Application Manual (archive) .

Application Workshop: On April 11, TDEC hosted an application workshop via webinar for the Medium- and Heavy-Duty Vehicles Grant Program. Staff from TDEC’s Office of Energy Programs and the Grants and Contracts Administration team presented and fielded attendees’ questions.

Applicants are required to attend the virtual application workshop prior to application submission, either by participating in the initial webinar session or by watching the recorded session. Click here to watch the recorded workshop and view the workshop slides here (archive) . Program Manual: The Medium- and Heavy-Duty Vehicles Grant Program Manual (archive) is a resource for grantees.

It outlines all terms and conditions of the Program and provides information on contract compliance, reimbursement processes, reporting requirements and templates, monitoring requirements, and more.

TDEC Grants Management System: Applications and supporting documentation for the Medium- and Heavy-Duty Vehicles Grant Program must be submitted electronically via the TDEC Online Grants Management System, which may be accessed here: https://tdec. smartsimple. com/ .

Please refer to TDEC’s “About the Online Grants System” webpage to learn more about the TDEC Grants Management System, including how to register and apply.

U.S. DOE Alternative Fuels Data Center (AFDC): AFDC provides information, data, and tools to help fleets and other transportation decision makers find ways to reach their energy and economic goals through the use of alternative and renewable fuels, advanced vehicle technologies, and other fuel-saving measures.

AFDC features comprehensive information on biodiesel, electric, ethanol, hydrogen, natural gas, and propane as vehicle fuels and tracks public refueling infrastructure through its industry-leading Alternative Fueling Station Locator. For those interested in the Medium- and Heavy-Duty Grant Program, AFDC can provide essential resources and information to explore the range of alternative-fueled vehicles available on the market.

Vehicle Information Checklist: TDEC has provided a Vehicle Information Checklist to help 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 , accessible here: Medium- and Heavy-Duty Vehicle Grant Program Vehicle Information Checklist (archive) .

FREQUENTLY ASKED QUESTIONS (FAQs) Who should I contact if I have questions? 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.

What entity should I affiliate with in the TDEC Online Grants System? 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. How do I calculate nitrogen oxide (NOx) reduction estimates for my proposed project? 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 (archive), 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. What reporting requirements apply to this program?

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.

What kind of “Applicant Geographic Information” does the application require? 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 . Will TDEC partially fund any grants? 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.

How long does a Grantee have to implement a project? 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.

May a Grantee purchase or Repower vehicles over the course of multiple fiscal years and/or under separate purchase orders or vendor contracts? 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. What if a vehicle delivery timeline exceeds the 24-month period of these programs?

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.

How quickly will Grantees receive reimbursement? 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.

How will Grantees receive reimbursement from the State? 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. What kind of projects will TDEC prioritize during application evaluation?

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 (archive) . (See pages 8-9 of the Medium- and Heavy-Duty Vehicle Grant Program Application Manual (archive) 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 (archive) 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.

Is it worth applying for a grant if we’re not in a Distressed County and don’t have a high DBI score? Yes! TDEC urges all eligible applicants to apply.

Who can apply for the grant? 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.

What types of projects are eligible for funding under the Medium- and Heavy-Duty Vehicle Grant Program? 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. What are the model year requirements for Medium- and/or Heavy-Duty Vehicle replacement or Repower?

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. Does a vehicle to be replaced need to be the same Gross Vehicle Weight Rating (GVWR) as the new vehicle?

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.) Are leased vehicles eligible for the programs?

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