Advanced Transit Dynamics, Eaton and the Sacramento Municipal Utility District will each receive over $200,000 for projects.
Eaton will build a package delivery van using a hydraulic series hybrid system it has developed.
Similar systems have also been developed and tested by several other companies. UPS has been running several series hybrid vans for more than two years.
Advanced Transit Dynamics will show an active aerodynamic system installed on a class 8 tractor trailer designed to minimize drag.
The Sacramento project will use digester gases to consume some of the emissions from a stationary engine fueled by biogas.
Companies getting the grants must provide matching funds for at least half the cost of the project with at least 10 percent coming from the grant recipient.