Incentives for medium and heavy-duty zero-emission vehicles

We know that the higher upfront purchase cost of medium- and heavy-duty zero-emission vehicles (MHZEVs) can make it difficult to adopt this clean technology. The Incentives for Medium- Heavy-duty Zero-Emission Vehicles (iMHZEV) Program are helping to make it more affordable.

Purchase and lease incentives

Before including a vehicle on the list of eligible vehicles, Transport Canada has reviewed an application from the automaker and has found that the vehicle meets the iMHZEV Program requirements. Namely, that the vehicle is:

• a medium or heavy-duty vehicle with a gross vehicle weight rating (GVWR) of greater than 8,500 lbs.
  • This includes class 2B to class 8 vehicles, including on-road vocational vehicles falling in those classes
    (e.g., refuse trucks, yard/shunt trucks)

Types of Incentives

The iMHZEV incentives are determined based on the characteristics of each eligible vehicle configuration. The incentive levels are as follows:

Incentive Levels by Class

Vehicle Type	GVWR (lb)	Vehicle Examples	Maximum Incentive Amount
Class 7/8 Coach Bus, Class 8 FCEVs	26,001+ (11,794+ kg)	Coach Bus	$200,000
Class 8 (350 kWh and up)	33,000+ (14,970+ kg)	Dump, cement, heavy conventional, sleeper	$150,000
Class 8 (under 350 kWh)	33,000+ (14,970+ kg)	Dump, cement, heavy conventional, sleeper	$100,000
Class 7	26,001 – 33,000 (11,794 – 14,969 kg)	furniture, medium conventional	$100,000
Class 6	19,501– 26,000 (8,846 – 11,793 kg)	Beverage, single-axle vans, rack	$100,000
Class 5	16,001 – 19,500 (7,258 – 8,845 kg)	Large walk-in, city delivery, bucket	$75,000
Class 4	14,001 – 16,000 (6,351 – 7,257 kg)	Large walk-in, conventional vans, city delivery	$75,000
Class 3	10,001– 14,000 (4,537 – 6,350 kg)	Walk-in, conventional vans, city delivery	$40,000
Class 2B	8,501 – 10,000 (3,856 – 4,536 kg)	Utility vans, full-size pick-ups, step vans	$10,000

Of note, the Program will provide lower incentives for plug-in-hybrids at 50% of the full ZEV incentive per vehicle weight class, up to a maximum of $50,000. Class 2B short range plug-in hybrid vehicles (i.e., those with a battery capacity of less than 15 kWh) will be eligible for incentives at 25% of the full ZEV incentive amount. Additionally, class 8 FCEVs will receive the maximum incentive amount of $200,000.

Eligible vehicles

To be eligible under the iMHZEV Program, a vehicle must:

• be a zero-emission vehicle (i.e., has the potential to produce no tailpipe emissions);
  • We consider the following to be zero emission vehicles:
    • Battery-electric;
    • Plug-in hybrid electric; and
    • Hydrogen fuel cell;
• be a medium or heavy-duty vehicle (i.e. have a gross weight rating greater than 8,500 lbs);
• meet all of Canada’s Motor Vehicle Safety Standards;
• be meant for use on public streets, roads, and highways or other paved surfaces; and
• be plated and registered in Canada in the eligible recipient organization’s name.

Zero emission vocational on-road trucks (e.g., refuse or dump trucks) will be eligible as would yard/shunt and drayage trucks. Zero-emission shuttle or coach buses will also be eligible.

Transport Canada may exclude certain types of vehicles from the program such as transit buses, school buses, recreational vehicles (RVs), or off-road vehicles.

Conversions (i.e., converting an existing internal combustion engine (ICE) vehicle to ZEV) are not eligible.

To be eligible under the iMHZEV Program, an eligible recipient organization must:

• be a Canadian Business / Organization with an office registered in Canada.

Only new ZEVs are eligible for the federal incentive (in other words, vehicles that haven’t been plated before). Eligible ZEVs that are demonstrators (a demo vehicle that buyers can test drive) are considered new vehicles and are eligible for the incentive as long as the odometer reads less than 10,000 km.

Incentives can be applied to eligible ZEVs leased for at least 12 months but will be prorated (adjusted) based on the length of a lease less than 48 months. For example, a 48-month lease is eligible for the full incentive, while a vehicle with a 24-month lease will be eligible for half the incentive.

As long as a vehicle’s full description (the year, make, model, and trim) appears on the list of eligible vehicles, an incentive can be provided. A “trim” is a pre-set package of equipment and finishes offered for a particular vehicle model (for example: base, sport, touring, etc.). A vehicle model can have multiple trim levels. Different trim levels will usually have different prices.

There is a limit to how many eligible ZEVs Canadian businesses can purchase or lease under the iMHZEV Program. Businesses and provincial/territorial and municipal governments operating fleets are eligible for up to 10 incentives (or a maximum of $1,000,000) under this Program in a calendar year.

Important: Transport Canada reserves the right to remove vehicles from the eligibility list if they no longer comply with program requirements.

How to receive the incentive

Notice: Dealership/authorized seller Enrolment applications and the mandatory forms are now available. Eligibility Assessment requests and complete submission of an Incentive request for reimbursement are now available through the iMHZEV online application.

The incentive will be applied at the point-of-sale by the dealership or other authorized sellers such as Original Equipment Manufacturers (OEMs) and/or vehicle finishers/distributors. It will appear directly on the bill of sale or lease agreement on eligible medium- and heavy-duty ZEVs purchased/leased on, or after, the vehicles eligibility date. The dealer must apply taxes and fees to the purchase or lease before applying the incentive.

The dealer must submit the documentation required to be reimbursed for an incentive provided to an eligible recipient organization at the point-of-sale.

The federal incentive for eligible medium- and heavy-duty ZEVs will be applied in addition to any provincial or territorial incentive offered.