Alternative Fuel Vehicles and High Occupancy Vehicle Lanes

High occupancy vehicle (HOV) lanes are available across thousands of miles in 20 states.1 Aiming to move people more efficiently, HOV lanes require that vehicles have a minimum number of occupants during peak traffic hours. Some HOV lanes have continuous regulations and may exempt certain vehicle types from the occupancy requirements.2 Often referred to as "carpool lanes," HOV lanes are open to carpoolers, buses, and motorcyclists in most areas. Some HOV lanes are accessible to certain inherently low emission vehicles (ILEVs), such as hybrid electric vehicles (HEVs) and alternative fuel vehicles (AFVs), regardless of the number of passengers. A number of states use HOV lane exemptions to encourage acquisition of certain vehicle types, like AFVs, to further reduce mobile source emissions. HOV lanes or roads open to single occupant vehicles for a fee, known as high occupancy toll (HOT) lanes or roads, may also provide toll discounts or even fee exemptions for ILEVs or AFVs.

Federal HOV Lane History

HOV lanes for passenger vehicles were developed as early as the 1970s to manage roadways and reduce fuel consumption by providing a dedicated lane for carpoolers to bypass commuting congestion. Several federal programs paved the way for states to implement HOV lanes. The Federal Highway Administration (FHWA) allowed state transportation agencies to spend federal funds on HOV lanes beginning in the 1970s, although it was not until a 1990 policy statement that FHWA began to encourage HOV lane development.3 The 1990 Clean Air Act Amendments authorized the U.S. Environmental Protection Agency (EPA) to restrict FHWA HOV lane funds to those states federally mandated to reduce air pollution and allowed these states to include HOV lanes in their state implementation plans.4 In 1991, the Intermodal Surface Transportation Act allowed these states to use Congestion, Mitigation and Air Quality (CMAQ) funds to develop new HOV lanes at the full federal cost-match ratio for highway infrastructure.5

Additional legislation has addressed HOV lanes. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users Act (SAFETEA-LU), enacted in 2005, allowed EPA to define single occupant low emission and energy-efficient vehicles permitted to use HOV lanes.6 The Moving Ahead for Progress in the 21st Century Act (MAP-21) replaced SAFETEA-LU in 2012 and extended relevant provisions, until being replaced by the Fixing America’s Surface Transportation Act (FAST Act) in 2015.7 The FAST Act extended the ability for public authorities to offer HOV access for low emission and energy-efficient vehicles, such as HEVs, through 2019, if the vehicles pay a toll. AFVs and plug-in electric vehicles (PEVs) may continue to be granted free or discounted access to HOV lanes through 2025.8,9 The specific vehicle models states choose to exempt has been informed by vehicle purchase trends and technology advancements to prevent significant HOV lane congestion.

State HOV Lane Regulations

Under current federal law, public authorities, such as states, may choose to exempt any type of PEV or AFV from HOV or HOT lane restrictions. HEVs are able to access these lanes via a reduced toll or program fee through 2019. State interpretation of this authorization varies—to promote certain fuels and technologies, many states allow only specific types of AFVs to use this exemption. Some states only exempt PEVs and allow HEVs discounted access, particularly those areas with limited alternative fuel infrastructure. Other exemptions apply to qualified natural gas vehicles (NGVs), propane vehicles, and fuel cell electric vehicles (FCEVs).

The identification method for eligible vehicles varies from state to state, with some using special license plates or decals that limit eligibility to in-state registered vehicles. Registration fees for decals and license plates also vary and may include annual or one-time fees. North Carolina and New Jersey, however, require no identification for eligible vehicles, which means qualified out-of-state vehicles may also use HOV lanes. New Jersey, however, does require eligible drivers to register HOT transponders if they want to receive a 10% toll discount.

The table below summarizes state HOV and HOT lane exemptions in place as of September 2015. See the Alternative Fuels Data Center’s State Laws and Incentives website for additional details.

State Exemption Type Identification Method Eligible Vehicles
ArizonaHOV ExemptionLicense PlateAFV (dedicated), PEV, HEV (restrictions apply)
CaliforniaHOV and HOT ExemptionDecalFCEV, NGV, PEV
ColoradoHOV ExemptionDecal and HOV Toll TransponderHEV
FloridaHOV ExemptionAnnual DecalHEV, ILEV
GeorgiaHOV and HOT ExemptionLicense PlateHOV: AFV, HEV, PEV
HawaiiHOV ExemptionLicense PlatePEV
MarylandHOV ExemptionDecal PEV
New JerseyPartial HOV ExemptionNoneHEV
New Jersey10% HOT DiscountToll Transponder RegistrationFuel economy greater than 45 mpg and meets California Ultra Low Emission Vehicle standards
New YorkHOV Exemption and 10% HOT DiscountSticker and Toll Transponder RegistrationHEV, PEV
North CarolinaHOV ExemptionNoneFCEV, NGV, PEV
TennesseeHOV ExemptionDecalILEV, Energy-Efficient, and Low Emission Vehicles
UtahHOV ExemptionDecal or PlateHEV, NGV, PEV, Propane
VirginiaHOV ExemptionLicense PlatesAFV (dedicated), HEV (depending on road)

State HOV lane programs have evolved as qualifying vehicle registrations have increased. States that led the way in adopting HOV lane exemptions for specific vehicle types, such as Arizona, California, and Virginia, found the incentive encouraged drivers to acquire HEVs and reached their maximum planned HEV quota earlier than anticipated. These states have already limited or eliminated HEV eligibility for some HOV roadways. The success in incentivizing HEV acquisition has led other states to review opportunities to add HOV lane exemptions for other vehicles, including AFVs. The Multi-State Zero Emission Vehicle (ZEV) Memorandum of Understanding, signed by eight governors in 2014, calls for lawful PEV use of HOV lanes in participating states, regardless of the number of occupants. As of September 2015, three of those states have HOV lane exemptions for ZEVs: California, Maryland, and New York.9

In states with shared toll transponder programs, such as E-ZPass, vehicles may have one transponder to use for multiple state HOT discount programs. This approach is already in place for the neighboring HOT discount programs for PEVs and high fuel economy vehicles with a registered E-ZPass in New York and New Jersey.

Non-financial incentives for AFVs are low or no cost measures states can use to support AFV market growth. HOV lane access is an incentive that has been quite popular with consumers. In a 2013 survey of California drivers, for example, 59% of those surveyed stated HOV lane access was extremely important or very important in their decision to purchase a PEV.10 The study noted that in California metropolitan areas, there is a direct correlation between HOV lane access and daily vehicle miles traveled (VMT) in HOV lanes. Respondents who face a longer mileage commute often ranked the HOV lane access as their chief reason for purchasing a PEV. A separate study in California concluded that existing HEV access to the HOV lanes maintained a faster average HOV lane speed by reducing neighboring congestion.11

Moving Forward

The number of HOV lanes allowing AFV exemptions continues to increase as states such as California and Virginia build new HOV and HOT lanes. With more states, including Connecticut, Massachusetts, and Oregon, pledging to evaluate ZEV exemptions, consumers in those regions may have additional incentives to purchase eligible vehicles. As more states evaluate non-financial incentives in the fact of limited state funding, efforts to promote AFV adoption via HOV and HOT lane incentives are garnering additional attention. Increased legislative support will depend heavily upon additional education aimed at both policymakers and consumers to explain the benefits of HOV access for AFVs as non-financial incentives.

The 2015 federal extension of HOV lane exemption programs on qualified roadways will allow states to adjust existing requirements, and will help shape future programs. States seeking relief from transportation emissions, as well as those that would like to incentivize AFV acquisitions, can build on the success of HOV and HOT lane programs to date. For states with overcrowded HOV lanes, the end of free HOV access for ILEVs and HEVs in 2019 will likely relieve congestion for AFVs and carpoolers, as seen in those states already phasing out HEV programs. States can achieve maximum program flexibility when developing and implementing customized AFV incentive programs with the ten-year extension for AFV HOV access.

1 A Compendium of Existing HOV Lane Facilities in the United States, U.S. Department of Transportation, 2008
2 Minimum passenger requirements and HOV hours vary based on location.
3 Leman, C., Schiller, P., and Pauly, K. Rethinking HOV – High Occupancy Vehicle Facilities and the Public Interest, Chesapeake Bay Foundation, 1993,
4 ibid.
5 ibid.
6 Cars and Light Trucks, U.S. Environmental Protection Agency, 2015,
7 Moving Ahead for Progress in the 21st Century Act (MAP-21), U.S. Department of Transportation, 2012,
8 Fixing American’s Surface Transportation Act (FAST Act, U.S. Senate, 2015
9 Eligible AFVs are defined as vehicles operating solely on methanol, denatured ethanol, or other alcohols; a mixture containing at least 85% methanol, denatured ethanol, or other alcohols; natural gas, propane, hydrogen, or coal derived liquid fuels; or fuels derived from biological materials. PEVs are defined as vehicles that are recharged from an external source of electricity and have a battery capacity of at least 4 kilowatt-hours.
10 Multi State ZEV Action Plan, 2014,
11 February 2014 Survey Results, Center for Sustainable Energy, 2014,
12 Jang, K., and Cassidy, M., Dual Influences on Vehicle Speeds in Special-Use Lanes and Policy Implications, Institute of Transportation Studies University of California, Berkeley, September 2011,