California Finalizes Plan for $423 Million Share of VW Funds
The state earmarks $130 million for electric buses. The mitigation funding is expected to become available starting in early 2019.

California has earmarked $130 million of its VW mitigation funds to replace existing school, transit, and shuttle buses with electric models.

California’s final plan for its Volkswagen (VW) settlement funds includes $130 million to replace existing buses with electric models.
The earmark for new electric school, transit, and shuttle buses accounts for about 31% of the state’s total $423 million share of the VW Environmental Mitigation Trust. In all, the trust is providing states with $2.9 billion for projects to cut nitrogen oxide from large vehicles.
Before states can spend their share of the funding, they have to develop beneficiary mitigation plans and submit them to the trustee, Wilmington Trust N.A.
The California Air Resources Board (CARB) approved the state’s proposed mitigation plan at a public meeting on May 25.
“This is a landmark moment in the saga of Volkswagen’s environmental violations,” CARB Chair Mary Nichols said in a press release. “Over the next 10 years this plan will put in place not only tools to clean up VW’s excess emissions, but also to help achieve further reductions of smog-forming pollution for decades to come.”
On Thursday, CARB submitted its final plan to the trustee and announced that it had been posted online.
As previously noted in the proposed version of California’s plan, the $130 million for electric school, transit, and shuttle buses will include incentives of up to $400,000 for each battery-electric school bus, along with supporting infrastructure. For the school bus incentives, CARB staff recommended a minimum 5% match from the school district or other funding source.
According to the plan, half of California's electric bus funding from the VW trust will be made available when the program is established, and the second half will be provided at least two years later.
CARB said that the VW mitigation funding is expected to become available starting in early 2019.
According to the California mitigation plan, about 65% of the state’s fleet of more than 25,000 school buses are fueled by diesel. Close to 4,500 of the older diesel school buses are not equipped with diesel particulate filters or “are nearing the end of their useful life and need to be replaced with cleaner alternatives, such as zero-emission technologies,” the plan says.
Meanwhile, California’s plan for its total $423 million share of the VW Environmental Mitigation Trust also tabs funds to replace heavy-duty trucks and equipment and to reduce emissions at freight facilities, marine projects, and light-duty vehicle charging.
A state Senate bill passed last year mandates that a minimum of 35% of the mitigation investment benefit disadvantaged communities. CARB said that the approved plan invests about 50% of the available funds in those communities.
For all states, VW mitigation plan contacts and other information are available at the VW Settlement Clearinghouse, which was launched by the National Association of Clean Air Agencies and the National Association of State Energy Officials.
More Alternative Fuels

Alt-Fuel Moves: Fleets Power Up Beyond the Bus
See how districts are pairing electric buses with charging, solar, and V2G technology to cut costs, boost resilience, and unlock new fleet value.
Read More →
What the EPA’s Updated Clean School Bus Program Means for Fleet Electrification in 2026 and Beyond
A guide to the EPA’s evolving school bus grants, including how the Trump administration changed funding priorities and how school districts can prepare for future bus purchases.
Read More →A Solution Helping School Buses Charge Without Major Infrastructure Upgrades
Power Innovations International dishes on its EV charging technology designed to reduce infrastructure barriers, improve reliability, and support V2G applications for school bus fleets.
Read More →
New Eagle Launches All-in-One EV Control Platform
The new OpenECU NX3 platform integrates charging and vehicle controls into a single platform, with support for megawatt charging and vehicle-to-grid technologies.
Read More →
GreenPower Unveils New Heating Solution for Type A Bus
The all-electric bus manufacturer's new product aims to eliminate cold-cabin issues on its Nano BEAST zero-emission school buses operating in cold climates.
Read More →
Alt-Fuel Moves: Fleets Plug In for the Long Haul
School districts across the U.S. are moving electric school bus plans into operation, with new fleet deployments, charging infrastructure, and long-term electrification partnerships taking shape.
Read More →The Achilles Heel of School Bus Electrification: BetterFleet’s Take
BetterFleet’s managing partner discusses AI-powered EV fleet management, vehicle-to-grid challenges, and the real challenges in bus electrification today, from ACT Expo.
Read More →
You're On Your Own to Pick a Drivetrain [Op-Ed]
After years of federal pressure toward electric school buses, districts are suddenly being told to choose their own path. Let’s explore the risks, realities, and politics behind school bus drivetrain decisions.
Read More →Wattson: Thomas Built’s Largest EV School Bus Yet
Check in with Mark Childers on the new Wattson Type D electric school bus, featuring faster charging, expanded passenger capacity, and advanced safety technology.
Read More →The New Era of Electric School Buses: V2G, Bidirectional Chargers & More
The Mobility House discusses AI-powered charging, vehicle-to-grid technology, smart energy management, and the next phase of school bus electrification.
Read More →
