TDEC Seeks Second Round of Medium-Duty and Heavy-Duty Vehicle Projects Under Volkswagen Settlement

The Tennessee Department of Environment and Conservation (TDEC) has released its second solicitation for medium-duty and heavy-duty vehicle projects under the Volkswagen Diesel Settlement Environmental Mitigation Trust.

The trust is for eligible projects that reduce emissions of nitrogen oxides. Under this solicitation, $4.3 million is available from the trust. Earlier this year, TDEC announced 22 entities receiving $18.9 million in grants for medium- and heavy-duty vehicle projects.

The grant program, managed by the TDEC Office of Energy Programs, will provide financial assistance to public, nonprofit, and private fleets in Tennessee to replace eligible medium-duty and heavy-duty vehicles with alternate-fuel (propane, natural gas, hybrid) or all-electric vehicles. Fleets may also apply to repower eligible vehicles with alternative-fuel or all-electric engines or drivetrains.

"Replacing older diesel vehicles and engines with alternative fuel options will reduce air pollutants, which threaten public health and the environment," TDEC Commissioner David Salyers said. "We look forward to the results of these projects in improving air quality in our state."

Medium-duty and heavy-duty vehicles eligible for replacement or repower include 1992-2009 engine model year:

• Class 4-7 Local Freight Trucks with a Gross Vehicle Weight Rating (GVWR) between 14,001 pounds and 33,000 pounds;
• Class 8 Local Freight Trucks and Port Drayage Trucks (GVWR greater than 33,000 pounds) used for port drayage and/or freight/cargo delivery; and
• Class 4-8 transit, shuttle, and school buses (GVWR greater than 14,001 pounds) used for transporting people.

Applicants are limited to one application each with a maximum replacement or repower request of 15 vehicles, with a maximum grant request of $3 million for all-electric projects and $1.5 million for all other fuel types. All terms and conditions of the program, including associated funding caps, are outlined in an application manual, accessible here.

Applications and supporting documentation must be submitted electronically via the TDEC online grants management system, which may be accessed at tdec.smartsimple.com.

Applications must be received by 4 p.m. CDT on Friday, Aug. 21. TDEC will announce awards after conducting a comprehensive review and evaluation of all complete and eligible grant applications. Grant contracting efforts will occur shortly thereafter. View more information regarding the Medium- and Heavy-Duty Vehicles Grant Program.

TDEC hosted and recorded a virtual application workshop following the release of the first-round solicitation in 2025, which applicants will be required to view prior to submitting a proposal. The workshop provides guidance on the application process and program terms and conditions, including project eligibility, timelines for implementation, and reporting requirements.

View additional information on the VW Settlement and to sign up for the email list.