Search Federal and State Laws and Incentives

High Occupancy Vehicle (HOV) Lane Exemption

Alternative fuel vehicles (AFVs) displaying the Virginia Clean Special Fuel license plate may use Virginia HOV lanes on specified areas of I-64, I-264, the Dulles Toll Road, and in the City of Alexandria, regardless of the number of occupants. For HOV lanes serving the I-66 corridor, only registered vehicles displaying Clean Special Fuel license plates issued before July 1, 2011, are exempt from HOV lane requirements. Only dedicated AFVs are eligible; see the Virginia Department of Motor Vehicles website for a complete list of qualifying vehicles. The annual fee for Clean Special Fuel license plates is $25 in addition to the prescribed fee for commonwealth license plates. This exemption expires September 30, 2025. For more information, see the Virginia Department of Transportation HOV Lanes website. (Reference Virginia Code 33.2-501 and 46.2-749.3)

Alternative Fuel School Bus and Fueling Infrastructure Loans

The Virginia Board of Education may use funding from the Literary Fund to provide loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)

Alternative Fuel Vehicle (AFV) Tax Reduction Authorization

Local governments may reduce personal property taxes paid on AFVs and low-speed vehicles. AFVs include vehicles that operate using natural gas, liquefied petroleum gas or propane, hydrogen, or electricity. (Reference Virginia Code 58.1-3506)

Alternative Fuel and Vehicle Tax

Alternative fuels used to operate on-road vehicles are taxed at a rate of $0.212 per gasoline gallon equivalent (GGE). Alternative fuels are taxed at the same rate as gasoline and gasohol (5.1% of the statewide average wholesale price of a gallon of self-serve unleaded regular gasoline). Refer to the Virginia Department of Motor Vehicles (DMV) Fuels Tax Rates and Alternative Fuels Conversion website for fuel-specific GGE calculations.

Alternative Fuel Provider License

Alternative fuel providers, bulk users, and retailers, or any person who fuels an alternative fuel vehicle from a private source that does not pay the alternative fuels tax must obtain an alternative fuel license from the Virginia Department of Motor Vehicles (DMV). For more information, see the DMV Fuels Tax Licensing website. (Reference Virginia Code 58.1-2244)

State Energy Plan

The Department of Mines, Minerals and Energy (DMME) is responsible for creating the Virginia Energy Plan (Plan) to assess the commonwealth's primary energy sources and recommends actions to meet state energy goals. The Plan must include policies to promote alternative fuel use, transportation electrification, efficient driving techniques, and reducing vehicle miles traveled. The Plan must assess statewide EV charging infrastructure and consider the impact of statewide policies, electric vehicle (EV) market projections, and statewide EV registration data to support the state’s 2045 net-zero carbon target in the transportation sector. The DMME must submit the Plan to the governor, the State Corporation Commission, and the General Assembly by October 1 of each year following the election of a new governor. For more information, see the Virginia Energy Plan website.

(Reference Senate Bill 1223, 2021, and Virginia Code 67-101 and 67-102)

Public Utility Definition

An entity that is not a public utility, public service corporation, or public service company that provides retail plug-in electric vehicle (PEV) charging services is not defined as a public utility and may sell electricity if the electricity is used solely for transportation purchases and the entity procured the electricity from an authorized public utility. The Virginia State Corporation Commission may not set the rates, charges, or fees for retail PEV charging services provided by non-utilities. (Reference Virginia Code 56-1.2:1 and 56-232.2:1)

Alternative Fuel and Hybrid Electric Vehicle (HEV) Emissions Testing Exemption

Vehicles powered exclusively by natural gas, propane, hydrogen, a combination of compressed natural gas and hydrogen, or electricity are exempt from the Virginia emissions inspection program. Qualified HEVs with U.S. Environmental Protection Agency fuel economy ratings of at least 50 miles per gallon (city) are also exempt from the emissions inspection program unless remote sensing devices indicate the HEV may not meet current emissions standards. For more information, including a list of HEVs that qualify, see the Virginia Department of Motor Vehicles Emissions Inspections website. (Reference Virginia Code 46.2-1177 through 46.2-1178 and 46.2-749.3)

Aftermarket Electric Vehicle (EV) Conversion Regulations

Any motor vehicle, other than a motorcycle, that has been modified to replace the internal combustion engine with an electric propulsion system must be titled by and registered with the Virginia Department of Motor Vehicles (DMV) as a converted EV. DMV converted EV registration requires certification by a Virginia safety inspector that the conversion to electric propulsion is complete and proof that the vehicle has passed a Virginia safety inspection. The inspector may charge a fee, not to exceed $40, in addition to any fee imposed for Virginia safety inspection. Converted EVs must be equipped with special equipment, including high voltage cables, a temperature monitoring system for traction batteries other than lead acid batteries, and labeling on three sides of the vehicle identifying it as "Converted Electric." For more information, see the DMV Titling a Converted EV website. (Reference Virginia Code 46.2-602.3, 46.2-625, and 46.2-1001.1)

Government Alternative Fuel Vehicle (AFV) Incentive

The Virginia Department of Mines, Minerals and Energy, in collaboration with the Virginia Department of Transportation, offers up to $10,000 to state agencies and local governments for the incremental cost of new or converted AFVs. To be eligible, vehicles must comply with Buy America provisions or qualify for a waiver from the U.S. Department of Transportation Federal Highway Administration, and must be garaged in areas of air quality nonattainment, as recognized by the federal Congestion Mitigation and Air Quality Improvement (CMAQ) program. For more information, see the Virginia CMAQ Incentive Program website.

Public Entity Retail Plug-In Electric Vehicle (PEV) Infrastructure Authorization

Any state government entity, as well as any locality, public institution of higher education, or school boards, may operate retail fee-based PEV charging infrastructure on its property. A locality may restrict use to employees of the locality and authorized visitors and may install signage that details these restrictions. Retail fee-based PEV charging provided by state agencies must be offered at rates similar to those in competitive areas. PEV charging infrastructure access must be restricted to employees, students, and authorized visitors only during school hours, and must be accompanied by appropriate signage. (Reference Virginia Code 22.1-131, 56-1.2, 56-1.2:1, 56-232.2:1, and 2.2-614.5)

Transit Emissions Reduction Grants

The Virginia Department of Rail and Public Transportation’s (DRPT) Making Efficient + Responsible Investments in Transit (MERIT) program provides funding for capital improvement projects, including the purchase or lease of new plug-in electric or hybrid electric vehicles. Funding amounts vary based on the project type.

In addition, as part of the MERIT program, the Clean Transportation Voucher Program (Program) offers grants of up to 100% of the incremental cost for transit agencies to replace model year 2009 or older Class 7 and Class 8 diesel transit buses with all-electric buses and up to 100% of the purchase cost of associated charging infrastructure. Awards are capped at $500,000 per electric bus, including charging infrastructure. The Program is funded by Virginia's portion of the Volkswagen Environmental Mitigation Trust.

For more information, including program guidance and the application, see the DRPT MERIT website and the Virginia Department of Environmental Quality Volkswagen Settlement Agreements website.

Plug-In Electric Vehicle (PEV) Time-of-Use (TOU) Rate – Appalachian Power Company

Appalachian Power Company offers a TOU rate to residential customers that own a PEV. Eligible customers must have a meter that is capable of separately identifying PEV usage. For more information, including billing rates and additional service conditions, see the Appalachian Power Company Virginia Rates & Tariffs website. This service is experimental and only available until September 12, 2023.

Electric Vehicle (EV) Rebate Program Working Group

The Virginia Department of Mines, Minerals, and Energy in collaboration with the Department of Environmental Quality, Department of Taxation, and the Department of Motor Vehicles will convene a working group to evaluate the feasibility of an EV rebate program. The working group will:

• Review methods for structuring and administering an EV rebate program;
• Review funding options;
• Evaluate vehicle sales data in states that offer EV rebates,
• Identify metrics for evaluating an EV rebate program for incentives under $4,500, and;
• Recommend incentives for low-income individuals.

Electric Vehicle Supply Equipment (EVSE) Policies for Associations

Homeowners associations (HOAs) or condominium associations may not prohibit the installation of an EVSE for personal use within the EVSE owner’s designated parking space. HOAs may establish restrictions on the number, size, placement, manner of installation, and insurance requirements for the EVSE if it is installed on the exterior of the property or in a common area. HOAs are not liable for the EVSE.

Utility Company Electric Vehicle Supply Equipment (EVSE) Requirement

Utilities must establish electric distribution grid transformation projects that facilitate the integration of electrical facilities and infrastructure necessary to support EVSE. Utilities will petition the State Corporation Commission for program approval and will receive a final order within six months of the petition filing.

Electric Vehicle Supply Equipment (EVSE) Rebates - Dominion Energy

Dominion Energy offers rebates to multi-family, workplace, and transit customers for the purchase and make-ready costs of Level 2 and direct current (DC) fast EVSE. The total number of rebates and funding available are as follows:

Rebates are awarded on a first-come, first served basis. For more information, see the Dominion Energy Electric Vehicles website.

Regional Transportation and Climate Initiative (TCI)

Connecticut, Delaware, District of Columbia (D.C.), Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia signed a Declaration of Intent to create the TCI, a regional initiative to improve transportation, develop a clean energy economy, and reduce carbon emissions and air pollutants from the transportation sector. The signatory states and D.C. agree to explore and develop policies and programs that result in greater energy efficiency of regional transportation systems and reduce emissions. Additionally, states support the deployment of clean vehicles and fueling infrastructure, such as electric vehicle supply equipment, to maximize the economic opportunities and emissions reductions. For more information, see the TCI website.

Zero Emission Vehicle (ZEV) Sales Requirement and Low-Emission Vehicle (LEV) Standards

The Virginia Air Pollution Control Board (Board) may adopt the California motor vehicle emissions and compliance requirements specified in Title 13 of the California Code of Regulations and create an Advanced Clean Cars Program. These regulations may apply to new vehicles with a gross vehicle weight rating of up to 14,000 pounds and may require manufacturers to meet the greenhouse gas emissions standard and the ZEV production and sales requirements. This program must be applicable to vehicles by model year 2025.

(Reference House Bill 1965, 2021, and Virginia Code 10.1-1307.04)

Alternative Fuel Vehicle Grant Authorization

Local governments are authorized to establish a green bank to promote investment in clean energy technologies, including alternative fuel vehicles and related infrastructure. (Reference House Bill 1919, 2021)

Transportation Electrification Study

The State Corporation Commission (Commission) must propose policies to govern public, investor-owned electric utility programs and accelerate widespread transportation electrification in Virginia. The Commission must evaluate:

• Utility and public investments that complement private efforts to deploy electric vehicle supply equipment (EVSE), focusing on low-income, minority, and rural communities;
• Smart growth policies that can advance transportation electrification; and,
• Utility actions that can facilitate EVSE deployment and transportation electrification.

Utility Electrification Investment Recovery Requirement

Beginning July 1, 2021, costs incurred by investor-owned electric utilities associated with investments in transportation electrification may only be recovered through the utility’s rates for electricity generation and distribution. (Reference House Bill 2282, 2021)