In conjunction with the Clean Energy Finance Corporation (CEFC), Volvo Financial Services has unveiled a new offering tailored specifically for the group’s battery electric vehicles (BEVs).
The $70 million finance package, backed by the CEFC, aims to lower the cost of BEVs for businesses of all sizes. Zero- and low-emissions trucks can be two to four times more expensive to purchase than a diesel truck for the same task.
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.
To address this, Volvo’s supported operating lease, known as the “Electric Ready Lease”, has been designed to encourage adoption and uptake of zero-emissions heavy vehicles. Key features of the lease include:
> An interest rate discount of up to 0.5 per cent for eligible Volvo Trucks’ customers to lease medium- and heavy-duty electric trucks including leasing of EV chargers; and
> Finance for residual value support to reduce operating lease costs and support the future value of the Volvo electric trucks under lease.
Volvo Group Australia President and CEO Martin Merrick says: “The announcement of this 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.”
Volvo Financial Services Managing Director David McGuire adds: “This 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.”
CEFC Executive Director Richard Lovell says that while other sectors of the economy continue to decarbonise, transport is expected to become Australia’s largest source of emissions as soon as 2030. Currently, transport accounts for up to 22.3 per cent of Australia’s national emissions – with road transport making up 84 per cent of all transport emissions.
“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 says.
“This innovative transaction demonstrates how fleet operators can work with manufacturers and financiers to accelerate the transition to electrification.
“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.
“Sharing the risk aligns lenders, manufacturers and end customers in building momentum to help decarbonise our transport sector.”
Volvo Group Australia has committed to manufacture Volvo electric trucks at its Queensland production facility as part of its broader sustainable manufacturing plans. The company has produced more than 80,000 trucks since it began manufacturing at Wacol in 1972.