The Commonwealth Government controlled Clean Energy Finance Corporation (CEFC) has revealed it is is working with o truck maker, the Volvo Group, in a bid to to accelerate the electrification of the Australia’s trucking fleet with a $70 million financing package.
CEFC says that the innovative program shows how fleet operators can work with manufacturers and financiers to accelerate the transition to electrification.
The Corporation says that reducing some of the financial risk associated with new technologies like such as Battery Electric Trucks (BET), as well as offering competitive finance discounts will help lower the premium associated with this new technology.
It says that sharing the risk will align lenders, manufacturers and end customers in building momentum to help decarbonise the transport sector.
CEFC’s executive director, Richard Lovell said that the finance package is targeting heavy-duty battery electric trucks (HD BEVs), as a way of tackling Australia’s substantial transport-related emissions.
Key features of the CEFC finance package include support for an interest rate discount of up to 0.5 per cent for eligible Volvo customers to enable them to lease medium and HD BEVs and install EV charging infrastructure, as well as offering finance for what it describes as an innovative ‘residual value support mechanism’, which it claims will reduce operating lease costs and support the future value of HD BEVs.
“Our economy relies on the logistics and freight sector to transport goods right around the nation, and with other sectors of the economy continuing to decarbonise, transport is expected to become our largest source of emissions as soon as 2030,” said Lovell said:
“Switching to battery electric trucks is an important opportunity for freight operators and businesses to show real leadership on the path to net zero emissions, while managing a growing freight network and a stronger economy,” he said.
“This innovative transaction demonstrates how fleet operators can work with manufacturers and financiers to accelerate the transition to electrification,” said Lovell.
“Reducing some of the financial risk associated with new technologies like BETs, and offering a competitive finance discount, helps lower the premium associated with this new technology and shares the risk by aligning lenders, manufacturers and end customers in building momentum to help decarbonise our transport sector,” he added.
Volvo Group says it has committed to manufacture Volvo electric trucks at its Waco production operation in Queensland as part of its broader sustainable manufacturing plans.
The company says it has produced more than 80,000 trucks since it began manufacturing at Wacol in 1972
Volvo Group Australia president and CEO Martin Merrick said the announcement of the finance comes at a critical time for Australia’s net zero ambitions.
“We know the cost of entry is a significant hurdle to overcome for many of our customers wanting to take the first steps towards implementing electric transport solutions in their businesses,” Merrick said.
The managing director of Volvo Financial Services, David McGuire said the program is designed to make the transition more affordable, allowing more of our customers to take that first vital step towards a fossil-free future for the benefit of all Australians.
“I have no doubt that working with the CEFC will act as a key enabler that will help drive the uptake and adoption of heavy electric vehicles,” McGuire said.
David Bertini, who is the director of sales and market development at Volvo Financial Services said that leadership today means driving real change.
“This new work with CEFC will help lead the industry’s shift to lower-emission freight across Australia. Our customers are ready to make the transition, and this initiative significantly expands where that’s possible,” Bertini said.
Zero and low emissions trucks can be two to four times more expensive to purchase than a diesel truck for the same task and while it is common for operators to lease heavy trucks, the high cost of BEVs and uncertainty about their depreciation rate compared to diesel equivalents is reflected in lower residual value expectations and increased leasing costs.
Transport accounts for up to 22.3 per cent of Australia’s national emissions, and is the fastest growing source of emissions.
Road transport makes up 84 per cent of all transport emissions and BETs represent a substantial opportunity to decarbonise the sector, but current sales are insignificant.
Up to o 30 June last year, the CEFC claims it has directly committed more than $200 million in electric vehicle related projects since its inception, to help decarbonise Australia’s transport sector.
Investments have included backing Australia’s first electrified bus fleet and increasing EV infrastructure with JET Charge. The CEFC has also helped finance more than 15,000 electric vehicles, exceeding $1 billion in value, including third-party capital through its co-finance programs.
