Search Federal and State Laws and Incentives

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Acquisition Requirements

A minimum of 75% of state government and educational institution fleet light-duty vehicles purchased must be HEVs or bi-fuel or dedicated AFVs. Vehicles must meet or exceed the federal corporate average fuel economy standards. Certified law enforcement pursuit vehicles and emergency vehicles are exempt from this requirement. The New Mexico Energy, Minerals and Natural Resources Department may grant additional exemptions based on the availability and suitability of vehicles, as well as fuel availability and cost.

(Reference New Mexico Statutes 13-1B-1 through 13-1B-7)

Alternative Fuels Tax

Alternative fuels subject to the New Mexico excise tax include propane, compressed natural gas (CNG), and liquefied natural gas (LNG). The excise tax imposed on propane is $0.12 per gallon, and the excise tax imposed on CNG and LNG is $0.133 and $0.206 per gallon, respectively. A gallon is measured as 3.785 liters of propane, 5.66 pounds (lbs.) or 126.67 standard cubic feet of CNG, and 6.06 lbs. of LNG. Alternative fuel purchased for distribution is not subject to the excise tax at the time of purchase or acquisition, but the tax is due on any alternative fuel at the time it is dispensed or delivered into the tank of a motor vehicle. Alternative fuel distributors must be licensed by the state. For tax forms and instructions, refer to the New Mexico Taxation and Revenue Department website. (Reference New Mexico Statutes 7-16B-1 through 7-16B-10)

Alternative Fuel Definition

Alternative fuels are defined as natural gas, propane, electricity, hydrogen, fuel mixtures containing not less than 85% ethanol or methanol, and fuel mixtures containing not less than 20% vegetable oil, or a water-phased hydrocarbon fuel emulsion in an amount not less than 20% by volume. Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and meets current ASTM pure biodiesel (B100) standards. (Reference New Mexico Statutes 13-1B-2 and 57-19-27)

Neighborhood Electric Vehicle (NEV) Access to Roadways

A NEV is defined as a four-wheeled electric motor vehicle that has a maximum speed of at least 20 miles per hour (mph) but not more than 25 mph and complies with the federal requirements specified in Title 49 of the Code of Federal Regulations, section 571.500. NEVs may only be used on roads with speed limits of up to 35 mph, though NEVs may cross roads or highways with greater speed limits at intersections or permitted crossing points. A local authority or the New Mexico Department of Transportation may prohibit the operation of NEVs on any road under its jurisdiction if the governing body determines that the prohibition is necessary in the interest of safety. (Reference New Mexico Statutes 66-1-4.12 and 66-3-1103)

Biofuels Production Tax Deduction

The cost of purchasing qualified biomass feedstocks to be processed into biofuels, as well as the associated equipment, may be deducted in computing the compensating tax due under the New Mexico Gross Receipts and Compensating Tax Act. For the purpose of this incentive, biofuels include ethanol, methanol, methane, and hydrogen. (Reference New Mexico Statutes 7-9-98)

Alternative Fuel and Advanced Vehicle System Manufacturing Incentive

The Alternative Energy Product Manufacturers Tax Credit provides credit against combined reporting taxes (gross receipts, compensating, and withholding) for qualified manufacturers of alternative energy products, including hydrogen and fuel cell vehicle systems, and electric and hybrid electric vehicles. The credit is limited to 5% of qualifying expenditures, and manufacturers must fulfill job creation requirements to be eligible. Qualified manufacturers must apply for and receive approval from the New Mexico Taxation and Revenue Department before they may claim the credit. For more information, including eligibility and application details, refer to the Alternative Energy Product Manufacturers Tax Credit website. (Reference New Mexico Statutes 7-9J-1 through 7-9J-8)

Biodiesel Blend Mandate

All diesel fuel sold for use in on-road motor vehicles to state agencies, political subdivisions of the state, and public schools must contain at least 5% biodiesel (B5). All diesel fuel sold to consumers for use in on-road motor vehicles is mandated to contain at least B5. As of October 12, 2022, the biodiesel blend mandate is suspended through April 15, 2023. (Reference New Mexico Statutes 57-19-27 through 57-19-29)

Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption

Any vehicle or combination of vehicles equipped with idle reduction technology may exceed the state's gross and axle weight limits by up to 400 pounds (lbs.) to compensate for the additional weight of the idle reduction technology. 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 lbs. (Reference New Mexico Statutes 66-7-410)

Biodiesel Blending Facility Tax Credit

A tax credit is available for up to 30% of the cost of both purchasing and installing equipment used to produce biodiesel blends containing at least 2% biodiesel (B2). The tax credit is limited to $50,000 per facility and is claimed against gross receipts tax or compensating tax. Individuals or organizations must apply for and obtain a certificate of eligibility from the New Mexico Energy, Minerals, and Natural Resources Department before claiming the credit. The credit may be carried forward for four years from the date of the certificate of eligibility. For more eligibility and application details, refer to the Biodiesel Blending Facility Tax Credit website. (Reference New Mexico Statutes 7-9-79.2)

Alternative Fuel Tax Exemption

Alternative fuel distributed by or used for federal government, state government, or Indian nation, tribe, or pueblo purposes is exempt from the state excise tax. (Reference New Mexico Statutes 7-16B-5)

Biodiesel Tax Deduction

Entities and individuals that receive or manufacture and deliver biodiesel within the state for blending or resale are eligible for a tax deduction for the fuel. (Reference New Mexico Statutes 7-16A-10)

Biodiesel Blending Facility Loading Fee Deduction

In calculating the annual petroleum products loading fee, a facility owner may deduct the number of biodiesel gallons delivered to be blended into petroleum products. The total deducted amount must be documented in the tax return associated with the facility in a format the New Mexico Taxation and Revenue Department approves. For more information, see the Conservation & Preservation Tax Credits website. (Reference New Mexico Statutes 7-13A-5)

Regional Electric Vehicle (REV) West Plan

New Mexico joined Arizona, Colorado, Idaho, Montana, Nevada, Utah, and Wyoming (Signatory States) in signing the REV West memorandum of understanding (MOU) to create an Intermountain West Electric Vehicle (EV) Corridor that will make it possible to seamlessly drive an EV across the Signatory States’ major transportation corridors.

In 2019, the Signatory States signed a revised REV West MOU to update their EV corridor goals based on progress to date. Signatory States are committed to:

• Educate consumers and fleet owners to raise EV awareness, reduce range anxiety, and increase EV adoption;
• Coordinate on EV charging station locations to achieve a consistent user experience across Signatory States;
• Use and promote the REV West Voluntary Minimum Standards for EV charging stations and explore opportunities for implementing the standards in Signatory States;
• Identify and develop opportunities to incorporate EV charging stations into planning and development processes such as building codes, metering policies, and renewable energy generation projects;
• Encourage EV manufacturers to stock and market a wide variety of EVs within the Signatory States;
• Identify, respond to, and collaborate on funding opportunities to support the development of the plan; and
• Support the build-out of direct current fast charging (DCFC) stations along EV corridors through investments, partnerships, and other mechanisms.

The Signatory States maintain a Coordination Group composed of senior leadership from each state which meet on a quarterly basis and report on the above actions. For more information, see the REV West website.

State Emissions Reduction Strategy

The governor established the Climate Change Task Force (Task Force) to evaluate strategies to reduce GHG and criteria pollutant emissions in New Mexico, including potential low emission vehicle and ZEV standards. New Mexico will pursue GHG emissions reduction of at least 45% below 2005 levels by 2030. The Task Force developed a climate strategy with initial recommendations in 2019 and published a progress report in 2020. For more information, see the Task Force website. (Reference Executive Order 2019-003, 2019)

Public Utility Definition

An entity that is not a regulated utility that resells natural gas or electricity as motor fuel is not defined as a public utility. (Reference New Mexico Statutes 62-3-4)

Utility Electric Vehicle (EV) Support

By January 1, 2021, and upon request by the New Mexico Public Regulation Commission (Commission) thereafter, public utilities must file an application to the Commission to expand transportation electrification. Applications may include, but are not limited to, incentives to facilitate the installation of EV charging infrastructure, electrification of public fleet vehicles, EV charging rates, and customer outreach and education programs. The Commission may approve applications based on whether the proposed projects can be reasonably expected to improve the electrical system efficiency of the public utility, to increase access to electricity as a transportation fuel, including in low income and underserved communities, to reduce air pollution and greenhouse gas emissions, and to encourage consumer adoption of EVs. (Reference New Mexico Statutes 62-8)

Energy and Fuel Cost Savings Contracts

Government fleets may finance alternative fuel vehicles or related infrastructure through guaranteed utility savings contracts where vehicle operational and fuel cost savings pay for the capital investment. Guaranteed utility savings contracts must show that the cost savings resulting from the alternative fuel and infrastructure projects are equal to or higher than the annual contract payments. (Reference New Mexico Statutes 6-23-2 and 6-23-3)

Electric Vehicle (EV) Charging Station Funding

The New Mexico Environment Department (NMED) provides funding for eligible mitigation projects for nitrogen oxides (NOx) emissions. NMED may provide funds up to 100% of the cost to purchase, install, and maintain eligible light-duty EV charging stations. Additional requirements may apply.

The program is funded by New Mexico’s portion of the Volkswagen Environmental Mitigation Trust. For more information, visit the New Mexico Volkswagen Settlement website.

Diesel Emission Reduction Funding

The New Mexico Environment Department (NMED) provides U.S. Environmental Protection Agency Diesel Emission Reduction Act (DERA) funding for heavy-duty on-road new diesel or alternative fuel repowers and replacements, as well as off-road all-electric repowers and replacements. Vehicles that qualify for replacement or repower include:

• Model Year (MY) 1992-2009 Class 8 local freight trucks and port drayage trucks;
• MY 1992-2009 Class 4-7 local freight trucks;
• MY 2009 or older Class 4-8 school buses, shuttle buses, and transit buses;
• Forklifts with greater than 8,000 pounds of lift capacity;
• Port cargo handling equipment; and
• High emissions diesel-powered or spark ignition airport ground support equipment.

For more information, visit the New Mexico DERA website.

Grid Infrastructure Development and Support

The New Mexico Department of Energy, Minerals, and Natural Resources will develop a grant program to support grid modernization technologies. Technologies include advanced metering infrastructure, energy storage systems, and electric vehicle charging systems. (Reference New Mexico Statutes 71-11-1)

Biomass Tax Credit

Dairy or feedlot owners may receive a tax credit of up to $5 per wet ton of agricultural biomass that is used to generate electricity or to make liquid or gaseous fuel for commercial use. (Reference New Mexico Statutes 7-2-18.26)

Electric Vehicle (EV) Charging Station Rebate – Powering New Mexico (PNM)

PNM offers residential customers a $300 rebate for the purchase of a Level 2 ENERGY STAR certified EV charging station. For more information, including eligibility requirements, see the PNM EV Discounts and Rebates website.

Electric Vehicle (EV) Infrastructure Support

New Mexico 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.

Electric Vehicle (EV) Charging Station Make-Ready Building Tax Credit

Commercial buildings may receive a tax credit of up to $1,500 for the purchase and installation of EV charging stations make-ready infrastructure, or up to $3,000 if the infrastructure is in an affordable housing building. To be eligible, buildings may not be larger than 20,000 square feet and must install wiring capable of supporting Level 2 EV charging stations at 10% of parking spaces. This tax credit is available for all taxable years prior to January 1, 2030. Additional restrictions may apply. (Reference New Mexico Statutes 7-2-18.32)

Residential Electric Vehicle (EV) Charging Station Rebates – El Paso Electric (EPE)

EPE offers residential customers a $500 rebate to purchase a qualified Level 2 EV charging stations and a $2,300 rebate for low-income customers to purchase and install a qualified Level 2 EV charging station. Low-income customers are households with income equal to or less than 200% of the federal poverty level. Eligible Level 2 EV charging stations must be ENERGY STAR certified, networked, and have Wi-Fi or cellular capabilities. For more information, see the EPE Residential Programs website.

Electric Vehicle (EV) Charging Station Rebate – El Paso Electric (EPE)

EPE offers commercial customers rebates for the installation of qualified Level 2 and direct current fast charging (DCFC) stations. Rebates are available in the following amounts:

Eligible EV Charging Stations must be UL2594 listed, ENERGY STAR certified, and have Wi-Fi or cellular capabilities. Additional eligibility requirements may apply. For more information, see the EPE Commercial Rebate Programs website.

Electric Vehicle (EV) Time-Of-Use (TOU) Rates – El Paso Electric (EPE)

EPE offers a TOU rate to commercial and residential customers that own or lease EVs. Eligible customers must be able to separately meter electricity used for EV charging. For more information, see the EPE EV Rates website.

New Mexico's National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the New Mexico Department of Transportation (NMDOT) 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) beginning August 1, 2022, describing how the state intends to distribute NEVI funds. The submitted plan must be established according to NEVI guidance.

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

Zero Emission Vehicle (ZEV) Sales Requirements and Low Emission Vehicle (LEV) Standards

New Mexico has adopted the California motor vehicles emissions standards and compliance requirements in the Title 13 of the California Code of Regulations. Manufacturers must meet the greenhouse gas emissions standard and the ZEV production and sales requirements, beginning with model year 2026. These regulations apply to new passenger cars, light-duty trucks, and sport utility vehicles. For more information, see the Road to Clean Cars New Mexico webpage.

(Reference New Mexico Environment Department Docketed Matters, EIB 21-66 (R) and New Mexico Administrative Code 20.2.91)

Residential Electric Vehicle (EV) Charging Station Program – Xcel Energy

The Xcel Energy EV Accelerate at Home program provides residential customers with a Level 2 EV charging station for a flat monthly fee. The fee covers EV charging station installation and maintenance by an Xcel Energy approved electrician. For more information, see the Xcel Energy Driving Toward an Electric Future website.

Residential Electric Vehicle (EV) Charging Station Rebate – Xcel Energy

Xcel Energy offers residential customers a rebate of up to $500 for the installation of a dedicated electrical circuit to support a Level 2 EV charging station. Income-eligible applicants may receive a rebate of up to $2,500. For more information, see the Xcel Energy Driving Toward an Electric Future website.

Electric Vehicle (EV) Time-Of-Use (TOU) Credit – Xcel Energy

Xcel Energy offers an annual credit of $50 for customers who charge EVs during off-peak periods. For more information see the Xcel Energy Driving Toward an Electric Future website.