Tennessee Laws and Incentives

Listed below are the summaries of all current Tennessee 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 (6)
• Utility / Private Incentives (20)
• Laws and Regulations (15)

State Incentives

Tennessee's National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the Tennessee Department of Transportation (TDOT) to submit an annual EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office of Energy and Transportation (Joint Office), describing how the state intends to distribute NEVI funds. The submitted plans must be established according to NEVI guidance.

For more information about Tennessee’s NEVI planning process, see the TDOT Plan website. To review Tennessee’s NEVI plan, see the Joint Office State Plans for EV Charging website.

Vehicle Emissions Reduction and Electric Vehicle (EV) Charging Station Project Funding

The Tennessee Department of Environment and Conservation (TDEC) provides funding for the repower or replacement of Class 4-8 school, shuttle and transit buses, Class 4-7 local freight trucks, and Class 8 local freight trucks and port drayage trucks, with alternative fuel or all-electric models. Alternative fuels include, but are not limited to, compressed natural gas, propane, and hybrid electric technologies. TDEC also provides funding for light-duty EV charging infrastructure. Private, public, and non-profit organizations, including state, local, and tribal governments, are eligible for funding.

In partnership with the Tennessee Valley Authority (TVA), TDEC also provides funding for the Fast Charge TN Network, which supports the deployment of direct current (DC) fast charging stations. Eligible applicants include TVA-served Local Power Companies whose service territory is located along corridors.

The grant programs are funded in part by Tennessee’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including funding availability, see the TDEC Project Solicitations and Fast Charge TN Network websites.

Natural Gas Station Property Tax Reduction

Any public utility, commercial, or industrial property certified to fuel natural gas vehicles may not be valued for property tax purposes at more than 30% of its total installed cost. The Tennessee Department of Environment and Conservation must certify that the station uses compressed or liquefied natural gas for the purpose of fueling motor vehicles and displaces more than 6,000 gallons of petroleum annually.

(Reference Tennessee Code 67-5-601 and 67-4-2004)

Methanol Tax Exemption

Methanol sold for use as a motor fuel that is not blended with gasoline, diesel, other fuels, or petroleum products is exempt from gasoline and diesel fuel use taxes.

(Reference Tennessee Code 67-3-419)

Idle Reduction Weight Exemption

Any motor vehicle equipped with qualified idle reduction technology or other emissions reduction technology may exceed the state gross or axle weight limits, by 550 pounds or the maximum amount allowed by federal law, whichever is greater, to account for the weight of the technology. The additional weight may not exceed the weight of the idle reduction unit. The vehicle operator must also be able to demonstrate that the technology is fully functional.

(Reference Tennessee Code 55-7-203)

Natural Gas Vehicle (NGV) and Electric Vehicle (EV) Weight Exemption

NGVs and EVs may exceed the state’s gross and axle vehicle weight limits by up to 2,000 pounds (lbs.). The NGV and EV maximum gross vehicle weight may not exceed 82,000 lbs. This exemption applies on all interstate highways.

(Reference Tennessee Code 55-7-203)

Utility / Private Incentives

Appalachian Power Company - Tennessee

Appalachian Power Company is an investor-owned utility (IOU) that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Appalachian Power Company website.

Residential Incentives

Non-Residential Incentives

Bolivar Energy Authority - Tennessee

Bolivar Energy Authority is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Bolivar Energy Authority website.

Residential Incentives

Non-Residential Incentives

Chicasaw Electric Cooperative - Tennessee

Chicasaw Electric Cooperative is a cooperative that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Chicasaw Electric Cooperative website.

Residential Incentives

Non-Residential Incentives

Columbia Power & Water Systems - Tennessee

Columbia Power & Water Systems is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Columbia Power & Water Systems website.

Residential Incentives

Non-Residential Incentives

Covington Electric System - Tennessee

Covington Electric System is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Covington Electric System website.

Residential Incentives

Non-Residential Incentives

Cumberland Electric Membership Corporation - Tennessee

Cumberland Electric Membership Corporation is a cooperative that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Cumberland Electric Membership Corporation website.

Residential Incentives

Non-Residential Incentives

Dickson Electric System - Tennessee

Dickson Electric System is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Dickson Electric System website.

Residential Incentives

Non-Residential Incentives

Duck River Electric Membership Corporation - Tennessee

Duck River Electric Membership Corporation is a cooperative that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Duck River Electric Membership Corporation website.

Residential Incentives

Non-Residential Incentives

Duke Energy - Tennessee

Duke Energy is an investor-owned utility (IOU) that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Duke Energy website.

Residential Incentives

Non-Residential Incentives

Gallatin Department of Electricity - Tennessee

Gallatin Department of Electricity is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Gallatin Department of Electricity website.

Residential Incentives

Non-Residential Incentives

Knoxville Utility Board (KUB) - Tennessee

Knoxville Utility Board (KUB) is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Knoxville Utility Board (KUB) website.

Residential Incentives

Non-Residential Incentives

Lawrenceburg Utility Systems (LUS) - Tennessee

Lawrenceburg Utility Systems (LUS) is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Lawrenceburg Utility Systems (LUS) website.

Residential Incentives

Non-Residential Incentives

Memphis Light, Gas and Water - Tennessee

Memphis Light, Gas and Water is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Memphis Light, Gas and Water website.

Residential Incentives

Non-Residential Incentives

Middle Tennessee Electric - Tennessee

Middle Tennessee Electric is a cooperative that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Middle Tennessee Electric website.

Residential Incentives

Non-Residential Incentives

Mount Pleasant Power System - Tennessee

Mount Pleasant Power System is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Mount Pleasant Power System website.

Residential Incentives

Non-Residential Incentives

Nashville Electric Service - Tennessee

Nashville Electric Service is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Nashville Electric Service website.

Residential Incentives

Non-Residential Incentives

Springfield Electric Department - Tennessee

Springfield Electric Department is a municipal utility that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Springfield Electric Department website.

Residential Incentives

Non-Residential Incentives

Tennessee Valley Authority (TVA) - Tennessee

Tennessee Valley Authority (TVA) is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Tennessee Valley Authority (TVA) website.

Residential Incentives

Non-Residential Incentives

Tri-County Electric - Tennessee

Tri-County Electric is a cooperative that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Tri-County Electric website.

Residential Incentives

Non-Residential Incentives

Upper Cumberland Electric Membership Corporation - Tennessee

Upper Cumberland Electric Membership Corporation is a cooperative that operates in Tennessee. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Upper Cumberland Electric Membership Corporation website.

Residential Incentives

Non-Residential Incentives

Laws and Regulations

Electric Vehicle (EV) Fee

In addition to standard registration fees, EV owners must pay an annual fee of $100. Annual EV registration fees increase according to the following schedule:

Years	Annual EV Fee
2024 to 2026	$200
2027	$274
2028 and later	$274, adjusted for annual inflation

In addition to standard registration fees, hybrid electric vehicle (HEV) and plug-in hybrid electric vehicle (PHEV) owners will be subject to the following annual fees:

Years	Annual HEV and PHEV Fee
2024 to 2028	$100
2028 and later	$100, adjusted for annual inflation

Low-speed and medium-speed vehicles are exempt from the fee.

(Reference Tennessee Code 55-4-116)

Alternative Fuel Tax

Compressed natural gas (CNG) and liquefied gas used for operating motor vehicles on public highways are subject to excise tax of $0.21 and $0.22, respectively, imposed on a per gallon basis. For the purposes of this tax, the Tennessee Department of Revenue uses a CNG gallon equivalent factor of 5.66 pounds (lbs.) and a liquefied gas gallon equivalent factor of 6.06 lbs. Liquefied gas includes combustible gas that exists in the gaseous state at 60 degrees Fahrenheit and at a pressure of 14.7 lbs. per square inch, but does not include gasoline, diesel fuel, or CNG. Government agencies are exempt from this tax.

(Reference Tennessee Code 67-3-1101 to 67-3-1102 and 67-3-1113)

Autonomous Vehicle (AV) Operation Authorization

AVs may operate on public roads without a driver present in the vehicle if the AV meets the following requirements:

• It complies with all applicable Federal Motor Vehicle Safety Standards;
• It is capable of reaching a reasonably safe state in the event that the automated driving system fails; and
• It is registered in the state as an AV that can operate without any supervision by a driver

An AV is defined as any vehicle that is equipped with a technology that has the capability to operate the vehicle without the direct control of the driver.

(Reference Tennessee Code 55-8-202)

Natural Gas Measurement

Compressed natural gas (CNG) and liquefied natural gas (LNG) used for transportation must be sold in gasoline gallon equivalents (GGE) or diesel gallon equivalents (DGE) prescribed by the state, unless equivalent measures are established by the National Conference on Weights and Measures. According to current state law, one GGE is equal to 5.66 pounds (lbs.) of CNG. One DGE is equal to 6.06 lbs. of LNG.

(Reference Tennessee Code 47-26-914)

Utility District Natural Gas Fueling Station Regulation

Utility districts may own and operate natural gas fueling stations if the operation of the station is not franchised to another entity. This regulation does not prohibit private companies from owning or operating natural gas fueling stations within a utility district service area.

(Reference Tennessee Code 7-82-302)

Biofuel Blending Contract Regulation

Any provision in a contract between a fuel wholesaler and a refiner or supplier that limits or restricts the wholesaler’s ability to blend petroleum products with ethanol or biodiesel is null and void.

(Reference Tennessee Code 47-25-2004)

Public Utility Definition

Electric vehicle (EV) chargers that provide electricity exclusively for EVs are not considered public utilities within the Tennessee Valley Authority (TVA) service area. EV chargers located outside of TVA’s territory may be subject to different regulations. For more information, see the TVA EnergyRight website.

Supply of Petroleum Products for Blending with Biofuels

Petroleum product refiners and suppliers must make all grades of gasoline and diesel fuel available to any wholesaler in a condition that allows for the fuel to be blended with ethanol or other bio-based products and must be sold in Tennessee. In addition, gasoline products must be available with detergent additives in concentrations such that after the addition of ethanol, the final product meets or exceeds the lowest additive concentrations that the U.S. Environmental Protection Agency requires.

(Reference Tennessee Code 47-25-2003)

Ethanol Blend Specifications

Ethanol-blended gasoline sold in the state must meet ASTM Standard D4814.

(Reference Tennessee Code 47-18-1304)

Biodiesel and Ethanol Definitions and Retail Requirements

Commercial biodiesel stock used for biodiesel blends must be at least 99% biodiesel (no more than 1% diesel fuel) and meet ASTM Standard D6751. Biodiesel blends must meet ASTM Standard D975. Biodiesel blends made available for public use at retail locations may not exceed 20% biodiesel (B20), and biodiesel blends containing more than 5% biodiesel (B5) must be labeled as a biodiesel blend at the pump.

Ethanol is defined as nominally anhydrous ethyl alcohol that meets ASTM Standard D4806. Ethanol blends made available for public use at a retail location must be labeled accordingly (e.g., E85).

(Reference Rules of the Tennessee Department of Agriculture 0080-5-12-.01, 0080-5-12-.02, and 0080-5-12-.03)

Alternative Fuel and Fuel-Efficient Vehicle Acquisition and Use Requirements

The Tennessee Department of General Services must ensure that at least 25% of newly purchased passenger motor vehicles procured for use in areas designated as ozone nonattainment areas are all-electric vehicles (EVs), hybrid electric vehicles (HEVs), natural gas vehicles (NGVs), or propane powered vehicles, provided that such vehicles are available at the time of procurement. If these vehicles are not available, conventional gasoline vehicles achieving an average fuel economy of at least 25 miles per gallon (mpg) may satisfy the requirement. In areas not designated as ozone nonattainment areas, at least 25% of newly purchased passenger motor vehicles must be EVs, HEVs, NGVs, propane powered vehicles, or conventional gasoline vehicles achieving an average fuel economy of at least 25 mpg. For non-passenger vehicles, state fleets must make a reasonable effort to purchase at least 5% of these vehicles as natural gas or propane vehicles.

State fleets must make every effort to ensure that 100% of newly purchased motor vehicles are energy-efficient vehicles. Energy-efficient vehicles are defined as passenger vehicles that use alternative fuels, as defined by the Energy Policy Act of 1992; HEVs; conventional gasoline vehicles achieving an average fuel economy of at least 25 mpg; or vehicles powered by ultra-low sulfur diesel achieving an average fuel economy of at least 30 mpg. Additionally, state agencies should use ethanol and biodiesel in appropriate state-owned vehicles whenever possible and support the development of biofuels fueling infrastructure.

The Tennessee Department of General Services must inventory the state’s passenger vehicle fleet and prepare annual progress reports that outline the fleet’s cost savings, pollution avoidance, and petroleum displacement.

(Reference Tennessee Code 4-3-1109)

Biofuel Quality Inspection and Testing

The Tennessee Department of Agriculture may inspect and test ethanol and methanol under the Kerosene and Motor Fuels Quality Inspection Act of 1989.

(Reference Tennessee Code 47-18-1306 and 54-1-136)

Propane and Natural Gas Liability Immunity

An individual or entity that supplies, handles, transports, or sells propane or natural gas at a retail station is immune from civil liability if incorrect use of the fueling equipment causes injury or damage. To be immune, the fuel provider must exercise reasonable care of the equipment and take reasonable steps to warn the customer of the hazards associated with misuse of the equipment.

(Reference Tennessee Code 29-34-202 and 29-34-207)

Compressed Natural Gas (CNG) Permit

CNG dealers must apply for and obtain a permit from the Tennessee Department of Revenue (Department). The permit authorizes the dealer to collect and remit taxes on CNG delivered to motor vehicles by means of a dispenser with meter capability. The permit will remain valid as long as the dealer provides timely reports and remits taxes when due, or until surrendered or cancelled. All CNG meters and dispensers are subject to inspection and verification by the Tennessee Department of Agriculture’s Weights and Measures enforcement provisions.

A CNG vehicle user must apply for and obtain a CNG user’s permit from the Department unless the user purchases CNG from a dealer through a metered dispenser.

For more information, see the Department’s CNG Tax Return for Dealers fact sheet and the Motor Fuel Taxes website.

(Reference Tennessee Code 67-3-1119 and 67-3-1120)

Low- and Medium-Speed Vehicle Access to Roadways

A low-speed vehicle is any four-wheeled electric vehicle, excluding golf carts, that achieves speeds of at least 20 miles per hour (mph) but not more than 25 mph. Low-speed vehicles may access roadways with speed limits of up to 35 mph. A medium-speed vehicle is any four-wheeled electric or gasoline vehicle that has a maximum speed of over 30 mph, but not more than 35 mph. Medium-speed vehicles may not operate on interstate highways or on any road or street that has a posted speed limit greater than 40 mph. Low- and medium-speed vehicles must comply with the safety standards in Title 49 of the Code of Federal Regulations, section 571.500.

(Reference Tennessee Code 55-8-101 and 55-8-191)