Finance for Battery
Electric Trucks
Finance for BET
- Nearly all newly deployed commercial vehicles, including long-distance, heavy-duty trucks, require carefully tailored financial instruments. Future Battery Electric Trucks (BETs) may potentially offer lower total costs for specific applications. However, the emergence of a new suite of financial products aligning with updated cash flow needs will be imperative due to the higher initial expenditures for e-Trucks, higher costs associated with new charging infrastructure, and the ensuing lower operational expenses.
- During both the pilot and ramp-up phases, providing suitable financial products is essential to ensure success. These financial products becomes essential for the rapid growth of e-Trucks, as more than 90% of these trucks are owned and operated by relatively small fleet owners with fleets of 20 vehicles or less. Meticulous planning and productizing are required to generate the necessary cash flows and cost structures over the financing period.
- Specific financial products are required for the pilot phase, including Viability Gap Finance (VGF) for pilots and first loss risk coverage for lenders. Additionally, another set of financial products is needed for the subsequent economic ramp-up phase. Consequently, two distinct sets of financing solutions (including loans, VGF, and risk loss coverage) must be devised and provided to operators and Charging as a Service (CaaS) providers: one for the trial phase and another for the standard economic ramp-up phase.
- Owners or operators of these vehicles typically have established systems for compensating drivers, often centered around fuel allowances. Given that BETs do not rely on traditional fuel, it is crucial to develop an appropriate and innovative compensation model that operators or owners can offer to drivers.
