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The Oregon Department of Environmental Quality (DEQ) confirmed today (August 2025) that its flagship ZERO Fleet Rebate Program is on the verge of hitting its $17 million funding limit, just eight months after the first applications were accepted. With strong demand from businesses, nonprofits, and government agencies across the state, DEQ expects to close the application portal within the next week, effectively ending the program for new applicants.
Launched in December 2025, the rebate program targets the purchase or lease of new all-electric medium- and heavy-duty vehicles in Classes 2b through 8—ranging from cargo vans and work trucks to semi-trucks, school buses, and refuse haulers. Rebates vary from $2,500 for lighter vehicles up to $120,000 for Class 8 heavy-duty rigs. The program was designed to slash diesel emissions from Oregon’s transportation sector, which accounts for the largest share of the state’s air pollution.
As of mid-August, rebates have already supported the acquisition of more than 150 zero-emission vehicles statewide. The breakdown includes:
“The overwhelming interest in the ZERO Fleet Rebate Program shows Oregon fleets are ready to make meaningful investments in cleaner transportation,” said Rachel Sakata, DEQ Transportation Strategies Section Manager. “By balancing funding across vehicle classes and prioritizing communities most affected by diesel emissions, we’re ensuring these rebates deliver the greatest air quality benefits while helping fleets transition to zero‑emissions technologies.”
The program’s funding model combines state seed money with federal grant dollars. In 2023, the Oregon Legislature passed House Bill 3409, authorizing the Environmental Quality Commission to create a rebate program for medium- and heavy-duty zero-emission vehicles. The bill provided $3 million in initial funding and charged the Commission with attracting additional resources. Rules were adopted in September 2024, including provisions to prioritize air quality improvements in disadvantaged communities.
A major boost came from the Climate Equity and Resilience Through Action (CERTA) grant, which contributed $14 million, bringing the total to $17 million. To ensure balanced support across different vehicle classes, DEQ capped Class 3 rebates at 12% of the total program allotment (just over $2 million), preventing lighter vehicles from consuming funds meant for larger, higher-emitting trucks that deliver greater pollution reductions per dollar.
Once the application window closes, DEQ will continue processing existing claims and monitor vehicle delivery timelines. The agency will not maintain a waiting list for additional funding. If new money becomes available (from state budget allocations or federal grants), DEQ says it will notify the public through email updates and its website.
Fleet operators and community members interested in future incentives can sign up for DEQ’s email alerts. The agency also maintains a Clean Vehicles web page with information on other grant and incentive opportunities for medium- and heavy-duty electric vehicles.
Exclusive insight: The ZERO Fleet Rebate Program’s rapid sell-out mirrors trends seen in other states like California and New York, where similar incentive programs for commercial electric trucks have been oversubscribed within months. Industry analysts note that the combination of attractive rebate amounts (up to $120,000) and the growing availability of Class 8 electric trucks from manufacturers like Tesla, Nikola, and Volvo has accelerated fleet adoption. However, the quick exhaustion of funds also highlights the gap between demand and available state-level incentives, putting pressure on Oregon lawmakers to allocate additional funding in future budget cycles.
For technical questions, email zerofleet@deq.oregon.gov.
Source: Oregon DEQ
