North Carolina Laws and Incentives

Listed below are the summaries of all current North Carolina laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

North Carolina's National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the North Carolina Department of Transportation (NCDOT) to submit an EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office by August 1, 2022, describing how the state intends to distribute NEVI funds. Plans must be established according to NEVI guidance.

For more information about North Carolina’s NEVI planning process, see the NCDOT NEVI website.

Alternative Fuel Vehicle (AFV), Idle Reduction Technologies, and Diesel Retrofits Funding

The Clean Fuel Advanced Technology (CFAT) project provides grant funding to reducing transportation-related emissions in nonattainment and maintenance counties for National Ambient Air Quality Standards. A project that is adjacent to these areas may also be eligible for funding if the project will reduce emissions in eligible counties. For more information, including current requests for proposals, see the CFAT website.

Point of Contact
Rick Sapienza
Clean Transportation Program Manager
North Carolina Clean Energy Technology Center, North Carolina State University
Phone: (919) 515-2788
resapien@ncsu.edu

Alternative Fuel and Idle Reduction Grants

The North Carolina Department of Environment Quality (DEQ) provides grants to repower, replace, and convert eligible on and off road vehicles and equipment to alternative fuels and fuel efficient technology. Equipment must be U.S. Environmental Protection Agency or California Air Resources Board verified. For more information, including a list of eligible technologies, see the DEQ Diesel Emission Reductions Grants website.

Point of Contact
Jill Vitas
Environmental Engineer
North Carolina Department of Environmental Quality
Phone: (919) 707-8424
jill.vitas@ncdenr.gov

High Occupancy Vehicle (HOV) Lane Exemption

Qualified plug-in electric vehicles, dedicated natural gas vehicles, and fuel cell electric vehicles may use North Carolina HOV lanes, regardless of the number of occupants. This exemption expires September 30, 2025. (Reference North Carolina General Statutes 20-4.01 and 20-146.2)

Plug-In Electric Vehicle (PEV) and Fuel Cell Electric Vehicle (FCEV) Emissions Inspection Exemption

Qualified PEVs and FCEVs are exempt from state emissions inspection requirements. Other restrictions may apply. (Reference North Carolina General Statutes 20-4.01 and 20-183.2)

Alternative Fuel Tax Exemption

The retail sale, use, storage, and consumption of alternative fuels is exempt from the state retail sales and use tax. (Reference North Carolina General Statutes 105-164.13)

Biodiesel Tax Exemption

An individual who produces biodiesel for use in that individual's private passenger vehicle is exempt from the state motor fuel excise tax. (Reference North Carolina General Statutes 105-449.88)

Alternative Fuel and Alternative Fuel Vehicle (AFV) Fund

The North Carolina State Energy Office administers the Energy Policy Act (EPAct) Credit Banking and Selling Program, which enables the state to generate funds from the sale of EPAct 1992 credits. The funds that EPAct credit sales generate are deposited into the Alternative Fuel Revolving Fund (Fund) for state agencies to offset the incremental costs of purchasing biodiesel blends of at least 20% (B20) or ethanol blends of at least 85% (E85), developing alternative fueling infrastructure, and purchasing AFVs and hybrid electric vehicles. Funds are distributed to state departments, institutions, and agencies in proportion to the number of EPAct credits generated by each. For the purposes of this program, alternative fuels include 100% biodiesel (B100), biodiesel blends of at least B20, ethanol blends of at least E85, compressed natural gas, propane, and electricity. The Fund also covers additional projects approved by the Energy Policy Council. (Reference North Carolina General Statutes 143-58.4, 143-58.5, 143-341, and 136-28.13)

Natural Gas Vehicle (NGV) Weight Exemption

A vehicle primarily powered by natural gas may exceed the state's gross vehicle weight limits by a weight equal to the difference between the average weight of the vehicle with the natural gas tank and fueling system and the average weight of a comparable vehicle with a diesel tank and fueling system. The NGV maximum gross weight may not exceed 82,000 pounds. (Reference North Carolina General Statutes 20-118)

Bond Exemption for Small Biofuels Suppliers

Fuel blenders or suppliers of ethanol or biodiesel are not required to file a bond with the North Carolina Department of Revenue when the expected motor fuel tax liability is less than $2,000. (Reference North Carolina General Statutes 105-449.72)

Utility/Private Incentives

Electric Vehicle (EV) Time-Of-Use (TOU) Rate - Edgecombe-Martin County EMC

Edgecombe-Martin County Electric Membership Corporation (EMC) offers a TOU rate to members that own an EV. Eligible customers who sign up for the TOU rate will also receive a $200 bill credit. For more information, including application requirements, see the Edgecombe-Martin County EMC EV Rates website.

Electric Vehicle (EV) Time-Of-Use (TOU) Rate and Credit - Piedmont Electric Membership Corporation

Piedmont Electric Membership Corporation (PEMC) offers a TOU rate to members that own or lease an EV. Eligible customers who sign up for the TOU rate will receive a $50 bill credit. Customers may also receive an additional $50 bill credit for the purchase of an EV. For more information, including eligibility requirements, see the PEMC EV TOU Rate and EV Incentives websites.

Electric Vehicle (EV) Charging Station Rebate – Cape Hatteras Electric Cooperative (CHEC)

Cape Hatteras Electric Co-Op (CHEC) offers a bill credit of $100 to residential customers who install a Level 2 EV charging station. For more information, including how to apply, see the CHEC Electric Vehicles website.

Electric Vehicle (EV) Charging Rate Incentive – Cape Hatteras Electric Cooperative (CHEC)

Cape Hatteras Electric Co-Op (CHEC) offers time-of-use (TOU) electricity rates to residential customers that own or lease a EV. For more information, see the CHEC Electric Vehicles website.

EV Charging Rebate and Time-Of-Use (TOU) Rate - Randolph Electric Membership Corporation (EMC)

Randolph EMC’s Electric Vehicle Utility Program (REVUP) offers residential customers a rebate of $500 for the purchase of qualified Level 2 electric vehicle (EV) charging station. Rebates are available to the first 50 applicants on a first-come, first served basis. REVUP also offers a TOU rate to residential customers that own or lease a plug-in electric vehicle. For more information, including eligibility requirements, see the REVUP website.

Electric Vehicle (EV) Rebate and Time-Of-Use (TOU) Rate - Roanoke Electric Cooperative

Roanoke Electric Cooperative offers a TOU rate to residential customers that own or lease a EV. Members pay a flat fee of $50 per month for a Level 2 charging station and up to 450kW of electricity. In addition to the discounted rate, the first 10 participants will receive a $1,000 rebate. For more information, see the EV Program website.

Electric School Bus and Infrastructure Rebate - Duke Energy

Duke Energy offers school districts a rebate for the purchase of electric school buses and to host utility-owned charging infrastructure. For more information, including eligibility requirements, see the Duke Energy Park and Plug website.

Multifamily Electric Vehicle (EV) Charging Station Pilot Program - Duke Energy

Duke Energy offers free EV charging station equipment, installation, maintenance, warranty, and network connection services to residents of multifamily dwellings through the Park & Plug Program pilot program. Participation is limited and available on a first-come, first-served basis. For more information, see the Duke Energy Multifamily Location EV Charging website.

Electric Vehicle (EV) Charging Station Rebate - Energy United

Energy United offers residential customers a $500 rebate for the installation of a Level 2 EV charging station. For more information, including how to apply, see the Energy United Appliance Rebate website

Electric Vehicle (EV) Charging Station Rebate - Surry-Yadkin Membership Corporation (SYEMC)

SYEMC offers residential members a rebate of $500 to purchase an EV charging station. For more information, see the SYEMC Member Rebates website.

Electric Vehicle (EV) Infrastructure Support

North Carolina utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.

Laws and Regulations

Public Utility Definition

A person who uses electric vehicle supply equipment to resell electricity to the public for the purposes of fueling an electric vehicle is not considered a public utility. (Reference North Carolina General Statutes 62-3).

Zero Emission Vehicle (ZEV) Requirements

State-owned vehicle fleets must prioritize ZEVs in the purchase or lease of new vehicles and use ZEVs for agency travel when feasible. The Department of Administration (Department) developed the North Carolina Motor Fleet ZEV Plan (Plan). The Plan identifies the types of trips for which ZEV-use is feasible, recommends infrastructure necessary to support ZEV use, and develops ZEV procurement options and strategies. The Department provides information about each agency’s ZEV acquisitions and miles driven by vehicle type annually. For more information, see the Department’s Climate Change & Clean Energy: Plans & Progress website.

(Reference Executive Order 80, 2018)

Medium- and Heavy-Duty Zero Emission Vehicle (ZEV) Deployment Support

California, Colorado, Connecticut, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington (signatory states) signed a memorandum of understanding (MOU) to support the deployment of medium- and heavy-duty (MHD) ZEVs through involvement in a Multi-State ZEV Task Force (Task Force).

In July 2022, the Task Force published a multi-state action plan to support electrification of MHD vehicles. The action plan includes strategies and recommendations to accomplish the goals of the MOU, including limiting all new MHD vehicle sales in the signatory states to ZEVs by 2050, accelerating the deployment of MHD ZEVs, and ensuring MHD ZEV deployment also benefits disadvantaged communities.

For more information, see the Medium- and Heavy-Duty ZEVs: Action Plan Development Process website.

Zero Emission Vehicle (ZEV) Support

The North Carolina Department of Transportation (DOT), in coordination with the Department of Environmental Quality, developed a ZEV Plan to guide ZEV adoption in North Carolina and increase the number of ZEVs in the state to at least 80,000 by 2025. The ZEV Plan provides guidelines for establishing state-wide vehicle corridors, installing charging stations and other infrastructure, and incorporating best practices for increasing ZEV adoption. For more information, see the DOT’s Climate Change & Clean Energy: Plans & Progress website.

(Reference Executive Order 80, 2018)

Zero Emission Vehicle (ZEV) Deployment and Emissions Reductions Goals

North Carolina established the following goals to reduce statewide greenhouse (GHG) emissions:

  • GHG emissions must be at least 50% below 2005 levels by 2030;
  • Achieve net-zero emissions by 2050;
  • Register at least 1,250,000 zero emission vehicles (ZEVs) by 2030; and,
  • Increase the share of new passenger vehicle sales to 50% ZEVs by 2030.
To meet these goals, the North Carolina Policy Office must conduct a GHG emission analysis by January 8, 2023, that evaluates potential pathways for achieving net-zero GHG emissions across the state by 2050 and interim targets.

(Reference Executive Order 246, 2022)

Clean Transportation Plan

The North Carolina Department of Transportation (DOT) must develop and submit a state-wide Clean Transportation Plan (Plan) by April 7, 2023, to meet North Carolina's emission reduction and zero emission vehicle (ZEV) goals. The Plan must recommend actionable strategies for decarbonizing the transportation sector by:

  • Increasing ZEV availability, sales, and usage to levels beyond current market projections;
  • Reducing statewide vehicle miles traveled;
  • Investing in clean transportation infrastructure;
  • Increasing equitable access to clean mobility options;
  • Increasing availability of non-vehicle transportation modes; and,
  • Transitioning registered vehicles to zero- and low-emission fuels.
The Plan must also include considerations for transitioning medium- and heavy-duty vehicles to ZEVs, as directed by the state’s participation in the Multi-State Medium and Heavy Duty Zero Emission Vehicle Memorandum of Understanding.

(Reference Executive Order 80, 2018, and Executive Order 246, 2022)

Volkswagen (VW) Settlement Allocation

The VW Litigation Environmental Mitigation Fund (Fund) is established as a special fund in the State Treasury, with the purpose of receiving funds allocated to the state as a beneficiary of the VW Environmental Mitigation Trust (Trust). The governor appointed the North Carolina Department of Environmental Quality (DEQ) as the lead agency to manage the Fund. DEQ will manage the Fund through five programs: a school bus replacement program, a transit bus replacement program, a clean heavy-duty on-road equipment program, a clean heavy-duty off-road equipment program, and a zero-emission vehicle infrastructure program. For more information, including open requests for proposals, see the final Beneficiary Mitigation Plan and the DEQ Volkswagen Settlement website. (Reference North Carolina General Assembly Session Law 2018-5, Section 13.11(a))

Autonomous Vehicle (AV) Committee and Regulations

The North Carolina Department of Transportation (NCDOT) established the Fully AV Committee to consider matters relevant to AV technology, review state motor vehicle laws, and make recommendations concerning vehicle testing, traffic rules and ordinances, and modifications of state laws. For more information, see the Automated Vehicles Roadmap for NC website.

Fully AV is defined as a vehicle equipped with an automated driving system that will not require an occupant to operate the real-time and tactical control functions of the vehicle at any time.

The operator of a fully AV is not required to be licensed to operate a motor vehicle. A person may operate a fully autonomous vehicle if the vehicle:

(Reference North Carolina General Statutes 20-400 through 20-403)

Alternative Fuels Tax

The state motor fuel tax on liquefied natural gas (LNG) is imposed based on the diesel gallon equivalent (DGE) and the tax on propane and compressed natural gas (CNG) is based on the gasoline gallon equivalent (GGE). For taxation purposes, one GGE of propane and CNG is equal to 5.75 pounds (lbs.) and 5.66 lbs., respectively, and one DGE of LNG is equal to 6.06 lbs. The North Carolina Department of Revenue will determine the equivalent rate for all other non-liquid alternative fuels. Certain exclusions apply. For more information, including current tax rates, see the Motor Fuels Tax Information website. (Reference North Carolina General Statutes 105-449.130 and 105-449.136)

Electric Vehicle (EV) Annual Fee

The owner of an EV that is exclusively powered by electricity must pay a fee of $130 in addition to any other required registration fees at the time of initial registration and annual registration renewal. (Reference North Carolina General Statutes 20-87)

State Highway Electric Vehicle (EV) Charging Station Regulations

The North Carolina Department of Transportation (NCDOT) may install and operate public EV charging stations at state-owned highway rest stops so long as it has developed a mechanism to charge EV charging station users a fee to recover the costs related to electricity consumed, processing the user fee, and operating and maintaining the EV charging station. NCDOT may consult with other state agencies and industry representatives to develop a cost recovery mechanism. (Reference North Carolina General Statutes 136-18.02)

Ethanol Blend Requirement

Suppliers that import gasoline for sale in North Carolina must offer fuel that is not pre-blended with fuel alcohol but that is suitable for future blending. Future contract provisions that restrict distributors or retailers from blending gasoline with fuel alcohol are void. (Reference North Carolina General Statutes 75-90 and 105-449.60)

Ethanol Blend Labeling Requirements

Pumps that dispense ethanol-blended gasoline available for purchase must be labeled with the registered brand name and the volume percentage, or blend level, of the ethanol. The labels must be affixed to the front panel of the pump in a position that is clearly visible to the vehicle driver. Graphics requirements apply. (Reference North Carolina Administrative Code Title 2, Chapter 42, Subchapter .0401 and North Carolina General Statutes 119-27.2)

Propane Dealer License

A propane dealer is defined as any person, firm, or corporation that sells or otherwise deals in propane. Every dealer must be registered with the North Carolina Board of Agriculture (Board). A dealer must obtain and maintain a general liability insurance, a bond, or equivalent protection for the public. The dealer must be able to provide verification of insurance within 10 days of the Board's request. Additional requirements apply. For more information, see the Standards Division website. (Reference North Carolina General Statutes 119-54 and 119-56)

Biodiesel Warranty Requirement

All new state government diesel vehicles must have a manufacturer's warranty that allows the use of biodiesel blends of 20% (B20) in the vehicle. This requirement does not apply if the North Carolina Department of Administration determines that there is no vehicle available that is suited for the intended use and that has a manufacturer's warranty allowing the use of B20. (Reference North Carolina General Statutes 20-351.11, 136-28.15, and 143-341)

Biodiesel Requirement for School Buses

Every school bus capable of operating on diesel fuel must be capable of operating using blends of at least 20% biodiesel (B20). At least 2% of the total volume of fuel purchased annually by local school districts statewide for use in diesel school buses must be a minimum of B20, to the extent that biodiesel blends are available and compatible with the technology of the vehicles and the equipment used. (Reference North Carolina General Statutes 115C-240 and 115C-249)

Fuel-Efficient Vehicle Acquisition Requirements

When purchasing new state vehicles, the North Carolina Department of Administration must give purchase preference to vehicles with fuel economy ratings that rank among the top 15% of comparable vehicles in their class. (Reference North Carolina General Statutes 143-341)

Alternative Fuel Vehicle (AFV) Acquisition Goal

North Carolina established a goal that at least 75% of new or replacement state government light-duty cars and trucks with a gross vehicle weight rating of 8,500 pounds or less must be AFVs or low emission vehicles. (Reference North Carolina General Statutes 143-215.107C)

Alternative Fuel Use and Fuel-Efficient Vehicle Requirements

State-owned vehicle fleets must implement petroleum displacement plans to increase the use of alternative fuels and fuel-efficient vehicles. Reductions may be met by petroleum displaced through the use of biodiesel, ethanol, other alternative fuels, the use of hybrid electric vehicles, other fuel-efficient or low emission vehicles, or additional methods the North Carolina Division of Energy, Mineral and Land Resources approves. (Reference Session Law 2013-265, Section 19.5(a))

School Bus Idle Reduction Requirement

All local boards of education in North Carolina have adopted idle reduction policies prohibiting school buses from idling unnecessarily on school grounds or warming up for longer than five minutes. For more information, including a sample policy and administrative procedure, see the North Carolina School Boards Association Reduced Idling Materials website.

Plug-In Electric Vehicle (PEV) Definition

A PEV is defined as a vehicle that:

  • Does not have the ability to be propelled by gasoline
  • Draws electricity from a battery with a capacity of at least four kilowatt-hours and is capable of being charged from an external source
  • Has not been modified from the original equipment manufacturer power train specifications
  • Has a gross vehicle weight rating of 8,500 pounds or less
  • Has a maximum speed of at least 65 miles per hour
  • Meets applicable requirements in Title 49 of the U.S. Code of Federal Regulations, section 571.
(Reference House Bill 211, 2019 and North Carolina General Statutes 20-4.01)

Electric Vehicle Performance Dashboard

The North Carolina Department of Transportation (DOT) will report all-electric vehicle, hybrid electric vehicle, and plug-in hybrid electric vehicle registrations on its performance dashboard. Data will include the number of monthly new registrations, monthly registration renewals, and the cumulative number of new registrations. For more information, see the DOT REPORT Program website. (Reference North Carolina General Statues 136-18.05, Section 29.14)

Electric Vehicle (EV) Charging Station Purchase Policy for Dealerships

Original equipment manufacturers (OEMs) may not require or coerce dealerships to purchase or lease EV charging stations unless the dealership is selling that OEM’s electric vehicles. Dealerships are not required to offer public charging or purchase more EV charging stations than reasonably necessary. (Reference House Bill 403, 2021)