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Clean Transportation Incentives

Update: Vehicle Incentive Programs Expanded for Flood-Impacted Residents. Enhanced incentives are now available for income-eligible Vermont residents whose personal vehicles have been damaged by flooding and attest to having scrapped the damaged vehicle. Flood-related updates for each incentive program are highlighted in the sections below and on the Drive Electric Vermont website.

An Electric Vehicle Charging station

Climate smart transportation incentive programs help income-qualified Vermonters reduce their transportation related emissions. VTrans works with partners including Drive Electric Vermont and Capstone Community Action to offer programs that replace internal combustion vehicles on the road with new or used efficient and electric vehicle, bicycles, or other clean transportation options. Find out which incentive opportunity might be right for you by exploring the climate smart transportation programs authorized by the Legislature. 

The Vermont Legislature has authorized four statewide vehicle incentive programs for income-qualified Vermonters plus an incentive for commercial fleets: 

  1. an incentive program for the purchase or lease of a new plug-in electric vehicle (PEV);
  2. an incentive program for the purchase of a high fuel-efficiency used vehicle called MileageSmart;
  3. an incentive program that retires 10+ year old internal combustion engine vehicles and provides funds for cleaner transportation alternatives called Replace Your Ride; 
  4. an incentive program for the purchase of a new electric bicycle (eBike);
  5. an incentive program to encourage the electrification of business, nonprofit, and municipal fleets.

These programs are described in greater detail below.

In addition, the Legislature has also authorized funding for EVSE (EV chargers) for affordable multi-unit developments and other community charging applications. For those interested in these programs, please visit the Department of Housing and Community Development website.

Incentive Program for New Plug-in Electric Vehicles (PEVs)

New PEV Program Update: An additional $1,000 incentive (up to $6,000 total) is now available to eligible Vermont residents purchasing or leasing a new all-electric vehicle (AEV) or plug-in hybrid electric vehicle (PHEV) to replace a flood-damaged vehicle.

Incentives are available for the purchse or lease of a new plug-in electric vehicle (PEV). Incentives are available on a first-come, first-served basis for income-qualified individuals, with greater incentives available for those with lower incomes and for those who purchase all-electric vehicles (AEVs).

Incentives are limited to plug-in electric vehicles (PEVs) with a base MSRP of $50,000 or less. Exceptions to the vehicle price caps are now available for those requiring an accessible vehicle. Please consult the updated list of eligible vehicles. The statewide incentive may be used in combination with additional PEV incentives offered by the state’s electric utilities and federal tax credits for greater savings.

Under the statewide incentive program for new PEVs, eligible customers may receive the incentive directly from a participating car dealer in the form of a reduced purchase or lease price, or they may receive a direct cash reimbursement from the state's incentive administrator, Center for Sustainable Energy.

It is not necessary to be a utility customer to participate in the program. Incentives are limited to one per person per year, as determined by a minimum 12-month lapsed time from a prior state EV incentive, and to Vermont residents only. Incentives are not available retroactively for purchases or leases made prior to the program launch or for purchases or leases made when funds have been exhausted and new funding is not yet available.

For more information including remaining funds, eligible models, application forms, and a current list of participating auto dealerships, please visit the Drive Electric Vermont website.

High Fuel-Efficiency Used Vehicle Program (MileageSmart)

MileageSmart Program Update: The full $5,000 incentive is now available to eligible Vermont residents replacing a flood-damaged vehicle with a high fuel-efficient used vehicle regardless of the vehicle price.

The high fuel-efficiency used vehicle program provides financial assistance to income-eligible Vermonters at the point-of-sale to purchase used fuel-efficient vehicles. MileageSmart can contribute up to 25% of the vehicle purchase price, with a maximum of $5,000. Additional information about MileageSmart, including how to apply, can be found at the MilesageSmart website,

Replace Your Ride

Replace Your Ride Program Update: An incentive of up to $5,000 is now available to eligible Vermont residents replacing a 10+ year old flood-damaged vehicle with a cleaner transportation option regardless of whether the flood-damaged vehicle is drivable or not. 

The Replace Your Ride program encourages owners of older internal combustion engine vehicles to switch to cleaner transportation options by offering an incentive of up to $5,000 to scrap the high polluting vehicle.  

Eligible applicants must either meet the lower-income thresholds of the PEV incentive program or meet the income criteria for the MileageSmart program (80% of State Median Income, based on household size).  

The program offers two options on how to use the incentive:  

  1. Participants may apply their voucher towards the purchase or lease of a new or used PEV;
  2. Participants seeking a more flexible option may apply their voucher towards active or shared mobility options including the purchase of either a used or new PEV; a bicycle, electric bicycle, or fully electric motorcycle; and/or shared mobility services that reduce the need for vehicle ownership (such as public transit fares, carsharing or bikesharing). Participants who chose the latter option will receive a clean mobility card, which is a pre-paid debit card that can be used at eligible businesses that help reduce or avoid vehicle miles traveled in single occupancy automobiles. 

Incentives through this program may be applied in combination with others through the MileageSmart, New PEV, and electric bicycle incentive programs. More information about the Replace Your Ride program is available at the Drive Electric Vermont website.

Electric Bike Incentive

The State of Vermont has re-opened the nation’s first statewide incentive program that offers pre-paid vouchers for electric bicycle (eBike) purchases. This program will help Vermonters make daily trips with cleaner transportation that helps reduce greenhouse gas emissions. 

The Vermont eBike Incentive Program, which first launched last July, is a limited-time offering available to income-eligible Vermonters on a first-come, first-served basis. Incentives will be available until the $150,000 in funding authorized this year is exhausted.

Features of the program have changed since the initial effort. Eligible eBikes must meet minimum safety standards and cannot exceed maximum price levels of a base MSRP of $4,000 for standard electric bikes and $5,000 for electric cargo bikes. eBike purchasers must first apply for and receive a pre-paid debit card that can be applied at the point-of-sale at participating bike shops. The program has also been further restricted to serve only households with lower incomes and high transportation needs.

eBike Type Incentive Amount Maximum MSRP
Standard eBike $400 $4,000
Cargo eBike $800 $5,000
Adaptive eBike $800 No maximum MSRP

As with the earlier iteration of the incentive program, the current eBike incentives can be combined with offers from Vermont electric utilities to further reduce the cost of electric bikes. For more information and to apply for the Vermont eBike Incentive Program visit the Drive Electric Vermont website

Electrify Your Fleet Program

Electrify Your Fleet is an electric vehicle incentive program for businesses, municipalities, and nonprofit organizations to reduce the climate impacts from fleet vehicles. The program will help fleet owners fund the replacement of their internal combustion engine (ICE) vehicles with cleaner electric transportation options such as Plug-In Electric Vehicles (PEVs), electric motorcycles, electric bikes, or electric snowmobiles.  

Electrify Your Fleet is a first-come, first-served grant program with awards made in the form of reimbursements of as much as $2,500 for each internal combustion engine vehicle replaced or avoided with a maximum of 20 incentives allowed per fleet.      

Find a link to the Notice of Funding Opportunity (NOFO), online application, and additional resources on the Electrify Your Fleet Program webpage


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