Transitioning New Jersey to Alternative Energy Vehicles

An article published last year entitled, “NJ Charges Forward with Electric Vehicle Network,” discussed the concerted efforts of New Jersey and several other states to develop a Northeast Electric Vehicle Network and promote alternative transportation fuels. The goal of this project is to encourage economic growth, maintain the region’s leadership in the area of clean energy, and reduce the region’s dependence on oil. Toward that end, two bills were recently introduced in the New Jersey State Legislature that would provide further incentive for New Jersey drivers to make the transition to alternative energy vehicles.

The first bill, A4000, proposes to authorize the use of constitutionally dedicated moneys to fund the conversion of certain diesel vehicles to compressed natural gas or electric vehicles. More specifically, the bill would permit the Department of Environmental Protection to provide a grant, upon proper application, to any owner of a regulated commercial bus, regulated solid waste vehicle, or diesel-powered school bus who chooses to convert their bus or vehicle to one that is powered by compressed natural gas or electricity. This is seen as a crucial step in New Jersey’s continued efforts to go green. “Transitioning individual and fleet vehicles off of petroleum and on to alternative domestic fuels is a critical step for all of us,” said Chuck Feinberg, Chairman of the New Jersey Clean Cities Coalition. “We need to do it not just for environmental reasons, but also for our economic security and energy independence.”

The second bill, A3500, proposes certain exemptions from the NJ sales and use tax for hybrid electric vehicles, compressed natural gas vehicles, and equipment used for refueling or recharging certain vehicles. Currently, only zero emission vehicles (ZEVs) are exempt from the sales and use tax under New Jersey law. Under this newly proposed bill, receipts from the sales of hybrid electric vehicles and the sales of vehicles fueled exclusively by compressed natural gas would be exempt from fifty percent (50%) of the tax imposed under the Sales and Use Tax Act. Furthermore, receipts from sales of equipment used for refueling or recharging such vehicles would be fully exempt from the tax imposed under the Sales and Use Tax Act. This last provision is an important step toward encouraging the infrastructure that is necessary to make widespread use of such vehicles practical and convenient for New Jersey drivers.

Taken together, these bills are intended to persuade New Jersey residents to consider transitioning to electric, or alternative energy, vehicles. This is no easy task. Despite many studies and government-sponsored websites that show fueling and maintenance costs to be cheaper in the long run for such alternative energy vehicles, many consumers continue to be dissuaded by the price premium of actually buying such a vehicle in the first place. Time will tell whether government initiatives, such as the bills recently introduced in the New Jersey Legislature, will be enough to convince consumers that the long term benefits of such alternative energy vehicles outweigh the costs.