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Consulting firm Gladstein, Neandross & Associates (GNA),
based in Santa Monica, California, has helped vehicle fleet
operators, original equipment manufacturers (OEMs), infrastructure
providers, and technology developers secure more than $1 billion in
funding in the advanced transportation technology and alternative
commercial fuel arenas. New infusions of federal and state funding
are accelerating the fleet transition.
In this Q&A, Net-Zero Business Daily by S&P
Global Commodity Insights speaks with GNA Senior Vice President and
Partner Joe Annotti about strategies for seeking funding, what
funders are looking for, and where opportunities are growing.
Net-Zero Business Daily: What types of companies or
organizations come to Gladstein, Neandross &
Associates?
Annotti: GNA's resume of end-user clients and
partners comprises some of the largest and most aggressive and
progressive alternative fuel vehicle adopters and promoters. Our
clients run the gamut from fleet operators and governmental
organizations to nonprofits and environmental groups. Our services
really span and support a wide range of organizations involved in
commercial transportation.
Net-Zero Business Daily: What help are they
seeking?
Annotti: More and more fleet operators are
either pursing internal sustainability goals or preparing for
regulatory compliance. The $1 billion in transportation incentive
funding that GNA has secured for such clients has led to the
purchase of over 8,600 medium- and heavy-duty vehicles and nearly
230 charging and low-emission fuel stations. GNA has also secured
funding for numerous pre-commercial projects that have helped OEMs
and technology developers secure much needed RD&D [research,
development and demonstration] funding.
GNA also helps with ambitious, integrated projects like the Joint Electric Truck
Scaling Initiative in Southern California, which will be
deploying 100 battery-electric trucks on drayage and regional haul
routes. This world-class project will be the largest of its size
worldwide and will establish the precedent for how fleets can
deploy ZEVs [zero-emission vehicles] at-scale.
Net-Zero Business Daily: Tell us about Gladstein,
Neandross & Associates.
Annotti: GNA works with business, government,
and communities to expand markets for environmentally friendly
products and services. Scouting and securing access to public
grants, incentives and other funds to assist the technology
research, development, and deployment has been a critical element
of our and our client's success over the years.
Our company brings a 28-year history and a team of approximately
80 professionals with in-depth technical, legislative, policy,
marketing, outreach, and market development expertise in the
advanced transportation technology and alternative commercial fuel
arena. While we have enjoyed a wide range of success on several
different projects on behalf of our clients, we are especially
proud of our grant writing and resource procurement efforts. GNA
has been involved in the development and passage of legislation and
policies that have resulted in hundreds of millions of dollars in
grant funding being directed to vehicle and equipment deployment,
and fueling infrastructure development.
Net-Zero Business Daily: Is now a good time to get
funding for clean transportation?
Annotti: Never better! There's funding in every
state and at the federal level for a wide range of
projects—vehicle deployments, infrastructure, fuel production,
etc. In particular, we're seeing a lot of activity from a subset of
states, including California, Texas, New York, New Jersey, and
Pennsylvania. Those states have major metro areas with more traffic
and thus are aggressively prioritizing emission reductions,
including via both vehicles and infrastructure because they are
mandated to meet goals for criteria pollutants including ozone
attainment and NOx attainment.
We are at a moment in time when incentives are key to help clean
vehicle technologies get closer to price parity with baseline
technologies such as diesel, and funding agencies know incentives
are critical to market penetration of clean vehicles, which we need
to see at-scale as we make progress towards a more sustainable
transportation sector.
Net-Zero Business Daily: On the consumer level,
battery-electric vehicles (BEVs) reached
a record 6% of new car sales in the US in the fourth quarter of
2021. Do you see funding opportunities for fleets to transition to
BEVs?
Annotti: There is an upward trend for BEVs and,
increasing, oil prices are surely helping drive consumer interest.
While GNA doesn't engage in the light-duty car segment, we are
seeing similar trends in the medium- and heavy-duty space in which
we specialize. There are several drivers of this trend, but none
more important than sustainability and regulations. More and more
companies are making commitments to sustainability goals, which
most often focus on GHG reductions. These companies control huge
volumes of freight, so the implications of these sustainability
goals on transportation is enormous.
The other side of the coin is the regulatory landscape. Key
regulations like the Advanced Clean Trucks Rule in California are
going to make a huge impact on the transportation landscape, as it
[and others like it] mandate increasingly stringent ZEV sales
goals.
With those twin drivers in place, we see the availability of
funding and the need for it at an all-time high. Funding agencies
are putting out solicitations for BEVs, but the incremental cost
for BEVs is still relatively high compared to other clean
transportation technologies, so the agencies realize incentives are
needed to assist new technologies. Also related to BEVs, funding
from utilities is increasing across the nation, which can take many
forms including fleet-friendly charging rates, demand charge
waivers, or infrastructure incentives and rebates.
Net-Zero Business Daily: Can you share a couple of
"lessons learned" from the hundreds of organizations you've
supported?
Annotti: Fleet operators can very easily get
overwhelmed by the sheer volume of funding opportunities. At any
given point, GNA's team is tracking over 500 different incentive
programs across the US and Canada. That can be very daunting to
newcomers in the incentives space. Thus, we advise a refined,
targeted approach to start. Understand the landscape, find the
right fit on a couple early projects, and secure funding early.
With that initial grant experience secured, our customers have a
much better awareness of the funding process and can expand their
review of additional programs.
Net-Zero Business Daily:How do you
help an organization find the appropriate scale of a project that
meets its goal and capabilities, but also fits existing funding
opportunities?
Annotti: Organizations of all sizes apply for
funding, and so funding applications can be modest, such as a fleet
operator simply trying to purchase a few electric transit vans,
while other organizations are trying to roll out a large, national
fleets of Class 8 trucks. In some cases, there are funding
carve-outs for specific types of operators, such as with California's HVIP funding
[Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project]
in which they have set aside funds for small fleet operators.
Success depends on understanding the many funding sources, the
goals, and targets for those programs, and then applying for the
ones best matched to your specific project and goals.
Net-Zero Business Daily: What are common mistakes to
avoid?
Annotti: Applicants often underestimate the
resources needed to apply for grant funding. Even the most
straightforward of voucher incentive programs, like HVIP in
California or NYT-VIP in New York, can take dozens of hours of
staff time to assemble the required documentation. We've seen
plenty of projects fall by the wayside because the required
signatory was unavailable on application day! It's the little
things that most regularly derail grant applications.
Net-Zero Business Daily: It seems like more funding is
available now than ever before. If so, does that help
newcomers?
Annotti: Yes, the level of funding and the
number of programs, and the dollar amounts in those programs are
increasing. Access for newcomers depends on the program; for
example, some of the more competitive funding programs favor those
applicants with experience in deploying alt fuel or zero emissions
projects. You'll compete better if you have experience with these
technologies. But newcomers are benefitting from overall increases
in infrastructure and truck funding.
In some regions, utilities will help smaller fleets with fewer
resources in the funding application progress. One we're very
familiar with is Southern California Edison (SCE)'s Transportation
Electrification (TE) Advisory Services Grant Assistance
Program, which helps medium- and heavy-duty fleets apply for
competitive funding opportunities to reduce the cost of purchasing
EVs, with a focus on hands-on support for small and mid-sized
commercial fleets. The rationale is that state and local grants for
EVs are often a complex and highly competitive process that most
small fleets can't afford. SCE's Grant Assistance Program connects
fleets with dedicated funding experts to walk them through this
process step-by-step, ensuring they apply to the right funding
program and that their application is complete and competitive, at
no charge.
It bears mentioning that many utility companies also are
providing incentives that pay for charging infrastructure
installation, which can be a relatively straightforward funding
source to tap.
Net-Zero Business Daily: What's the typical range of
matching funds that is expected?
Annotti: For vehicles, funding usually maxes
out at the price delta between the cost of a baseline vehicle, such
as diesel, compared to the cost of a clean vehicle technology. So,
effectively the "match" is the cost of the baseline vehicle, in
many scenarios. For infrastructure, 50% match is a typical number.
Projects that provide more cost share or lower costs will be more
competitive in the eyes of the funding agency.
Net-Zero Business Daily: What are good resources for
more information?
Annotti: GNA's Funding 360 program is a great
resource, of course. You can also sign up to receive information
from listservs that the funding agencies use to communicate their
programs, which announce when funding or application opportunities
will open up. There will also be a funding workshop at ACT Expo
coming May 9-12 in Long Beach, California.
Net-Zero Business Daily: How does the future look for
funding?
Annotti: The future is bright for clean
transportation incentives. [In the US,] we have a very robust $3
billion annual market for clean transportation incentives—and
that is BEFORE the
2021 Infrastructure Investment and Jobs Act funding is
accounted for. Moving ahead in 2022, we're going to see an
aggressive jump in funding for the infrastructure components of
zero-emissions projects. The trucks and buses will continue to see
healthy investments, but government agencies are increasingly
upping the ante on the infrastructure side of clean transportation
projects.
Net-Zero Business Daily: What would you like to see to
make obtaining and using clean transportation funding even
better?
Annotti: We would like to see long-range
trucking receive more funding focus. A very large percentage of
emissions and miles traveled are from long-haul trucks, which do
not follow geographic boundaries, but agencies often place
geographic restrictions on operations, such as a requirement that
90% of the operations for a funded truck must be in a particular
state. Those trucks aren't being transitioned to clean technologies
because the grant funding generally isn't geared to wide
geographies. Telematics are widely used now and can increasingly be
a solution to provide the agencies with data so they know truck
travel patterns and can disperse grant funding accordingly, and
that may help address this opportunity on a larger scale.
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