Making Public Dollars Go Further with Innovative Clean Truck Financing

Florida-based trucking company Expedite Express recently filed for bankruptcy, citing soaring diesel costs. It was one of 16 freight carriers to enter bankruptcy proceedings in less than a month. With diesel averaging $6.29 a gallon nationally in September, truck buyers have a compelling reason to reconsider what powers their fleets. An executive at truck maker Traton put the potential fuel-cost advantage of battery-electric trucks in plain terms: imagine buying diesel for $1.50 to $2 a gallon.

The catch is paying for the truck that delivers those savings. Electric trucks generally cost more upfront than their diesel equivalents, and the savings come later. Large down payments and uncertainty about eventual resale value can put electric trucks out of reach, even when lower operating costs would more than offset the higher purchase price. 

Innovative financing policies can ease that upfront burden, helping businesses afford the purchase today and benefit from lower operating costs over time. By mobilizing private capital, they can also help limited public funding support more electric truck purchases. That’s why California and New Jersey have established lending-support programs, and California is now studying resale-value guarantees (RVGs). In Australia, the Clean Energy Finance Corporation is already backing a program that supports electric-truck resale values to lower leasing costs.  Modeling suggests an RVG could mobilize roughly $23 in private investment for every public dollar set aside to cover claims.

Why a Good Investment Can Be Hard to Finance

Uncertainty about an electric truck’s eventual resale value can make it more expensive to finance. Diesel trucks don’t face this problem because decades of sales help lenders estimate depreciation and resale prices. The used electric truck market has far less history. Lenders must assess unfamiliar equipment, battery condition, and how quickly newer models might erode demand for older ones. A report based on interviews with banks identified resale-value uncertainty as a central obstacle to financing electric trucks.

That uncertainty has a steep price. Lease payments are largely determined by the gap between a vehicle’s purchase price and its expected value at the end of the lease. The lower the assumed resale value, the more the customer pays during the lease. And when lenders are unsure what a truck will be worth, they treat it as weaker collateral, which can mean a higher interest rate, a smaller loan, a larger down payment, or an outright rejection.

Small trucking businesses, from owner-operators with a single truck to companies with small fleets, face particular financing challenges. They may have less cash on hand for a down payment, and buying a first electric truck means taking on the uncertainty of adopting a technology that is new to the business. Unlike larger fleets, they have fewer vehicles to spread that risk across.  

This support doesn’t need to be permanent. It can taper off as the price gap with diesel shrinks and lenders gain experience and resale data. Falling battery costs and larger-scale production are expected to bring electric truck prices down. Smaller electric delivery trucks are projected to cost less than comparable diesel models by 2030, with electric long-haul trucks following by 2035. In the meantime, state programs can bridge the financing gap and put electric trucks’ fuel and maintenance savings within reach of more American trucking companies. They can also help keep the U.S. from falling further behind in a shift that’s already well underway in places like China, where electric trucks made up 26% of new medium- and heavy-duty truck sales in 2025. 

The Public Interest in Clean Truck Deployment

Helping trucking businesses go electric does more than lower their costs. It also cuts harmful diesel pollution and climate-warming emissions from transportation.  Diesel exhaust contributes to respiratory illness and heart disease and contains more than 40 cancer-causing substances. One peer-reviewed study estimated that in the U.S., diesel vehicles cause four to 4.5 times as many air-pollution-related premature deaths per mile as gasoline vehicles. People living near ports, warehouses, and major freight routes bear a disproportionate share of that burden. Because electric trucks produce no tailpipe exhaust, financing barriers that delay diesel replacement also prolong exposure for people who live, work, and go to school along truck routes. 

Drivers benefit, too. Drivers praise electric trucks for their quieter, smoother ride and easier handling, according to the North American Council for Freight Efficiency and the trucking company Schneider. Daimler has reported that some drivers would consider postponing retirement if they could switch to electric trucks, citing reduced physical strain.

The economic stakes reach far beyond truck owners and operators, because trucks move most goods in the United States. Lower operating costs can reduce the cost of shipping, and accessible financing can put those savings within reach of more businesses, which could in turn help hold down consumer prices. Electrification also reduces exposure to volatile diesel prices, strengthening energy security.

Innovative Financing Examples States Can Build On

New Jersey and California illustrate two approaches to financing electric trucks: low-interest public loans and reserves that reduce lenders’ risk. 

New Jersey established its Zero Emission Vehicle Financing Program with a $25 million funding commitment to help electric truck buyers. The program offers low-interest loans with rates fixed for five years. Loans can cover up to 100% of eligible vehicle costs, easing the down-payment burden, and no payments are due and no interest accrues before the vehicle is delivered. In its first year, the program reserved $15 million for applicants from overburdened communities. Direct public lending programs like New Jersey’s require upfront capital, but loan repayments return that money to the state. 

California’s CalCAP Zero-Emission Heavy-Duty Vehicles program takes a different approach, offering repayment guarantees through “loan-loss reserves.” For each enrolled loan, the program contributes 25% of the loan amount to a reserve that the lender can draw on if a borrower defaults. The lender supplies the loan capital; the public contribution helps cover potential losses. An earlier CalCAP truck-replacement program illustrates the scale this approach can reach:  about $256 million in reserve contributions supported more than $3 billion in private capital investment, roughly $12 in lending for every reserve dollar.

Evidence from the energy efficiency sector suggests loan-loss reserves can mobilize private capital at low cost. A Lawrence Berkeley National Laboratory study of more than 52,000 residential energy-efficiency loans across four states found that losses averaged about 65 cents a year for every $100 lent, meaning that losses on these loans were relatively small. Those findings suggest loan-loss reserves could help states mobilize private investment in electric trucks at low public cost. And as with home energy-efficiency upgrades, lower energy bills can help borrowers repay their loans. 

The Next Step for Resale Guarantees

Loan guarantees directly protect lenders when borrowers fail to repay. RVGs address a different risk: a truck selling for less than expected. Because the truck serves as collateral, an RVG protects buyers against resale losses and reduces lenders’ potential losses at the same time.

Here’s how one might work: an electric truck buyer and a state-backed program agree on an expected resale value of $50,000 after five years. If the truck sells for $40,000 instead, the program pays the buyer an agreed share of the $10,000 gap.

That protection can lower costs long before a truck is ever resold. By absorbing part of the risk, a guarantee can give lenders and leasing companies the confidence to offer lower lease payments and better loan terms. It’s also efficient for public budgets: an RVG pays out only when a covered loss occurs, and states can cap how much they promise to cover, both per truck and across the program.

California is now exploring this approach. Senate Bill 1213, signed in September 2026, directs state agencies to study RVGs and other financing tools and report their findings by January 1, 2028.

Illustrative modeling by the Green Finance Institute and CALSTART suggests that an RVG could cut leasing costs by 12% while mobilizing $23 in private investment for every dollar set aside to cover potential claims.

Guarantees shouldn’t replace purchase incentives, though. The two address different hurdles: incentives reduce the purchase price, while guarantees can make the remaining cost easier to finance. Separate modeling from the Institute of Transportation Studies found that pairing purchase incentives with RVGs could achieve similar ownership costs with less public spending than incentives alone. That’s a strong case for designing the two together, rather than asking either to do the whole job. 

Putting Clean-Truck Financing to Work

States should use these tools as part of a broader electric truck strategy. Lower fuel and maintenance bills offer little help to a trucking business that cannot afford the truck in the first place. Innovative financing can help close that gap, putting electric trucks’ savings within reach of more businesses, especially owner-operators and smaller fleets that face the steepest financing barriers. The benefits extend beyond fleets: less diesel exhaust means better health for the people living, working, or going to school near truck routes. 

Well-designed financing policies, paired with purchase incentives, can help states mobilize private investment and stretch limited public funding further. States don’t have to start from scratch. They can build on existing programs and a growing body of research, helping more businesses save money and more communities breathe cleaner air.