Financing the change to alternatively fueled vehicles

Sep 9, 2022


More and more companies are looking to make the switch to fleets that utilize alternative energy sources. Whether electric or hydrogen fuel cell, they understand the importance of transforming their lorries, buses, last mile delivery vans, and other goods vehicles into a more sustainable fleet.

There are a variety of drivers behind the move to alternatively powered fleets with a growing number of companies needing to make substantial investments into their logistics solutions.

Financing sustainability in fleets
The increase in sustainability KPIs among businesses has necessitated large-scale investment in electric or hydrogen-powered assets in order to achieve sustainability targets in the coming years. However, some businesses have also realized the benefits of financing their investments in sustainable transport and fleet solutions, transforming their investment from a CAPEX to an OPEX solution.

Online supermarket Picnic turned to DLL in 2019 when it looked to expand its German operations and needed to finance its large fleet of electric delivery vehicles. This allowed Picnic to free up the capital that would otherwise be tied up in its fleet to be utilized in other areas of the business while maintaining its sustainable solution for delivering groceries.

Legislation drives sustainable fleet solutions
Legislation surrounding emissions restrictions has already been driving the transitions to sustainable energy sources for fleets, with more stringent emissions controls being adopted on a regular basis.

Certain areas are fast becoming emission-free zones, necessitating the move to electric or hydrogen-powered vehicles for those wishing to operate within these zones. This has also resulted in the need for infrastructure development, such as charging stations.

An example of this is the Dutch government’s declaration that all logistics transport with its cities is expected to be emission-free by 2025. Furthermore, 2030 will see a ban on the sales of ICE (internal combustion engine) vehicles with all road transport emissions-free by 2050.

Challenges facing sustainable fleets
Currently, the lack of adoption of sustainable fleets has largely been due to reasons such as limited range, high cost of fixed assets and lack of charging infrastructure. Additionally, the lack of full-scale adoption of sustainable fleets increases uncertainty regarding their resale value.

A company’s investment in a sustainable fleet can potentially represent a significant portion of its total investment, particularly for logistic service providers. Such a change in its largest asset base is not a trivial matter. However, this is where DLL’s expertise in fleet finance can assist businesses in finding the right financing option to suit their needs.

Partnering for a sustainable future
Whether driven by legislation or a desire to operate to certain environmental standards, DLL supports sustainable solutions and business models with a focus on marrying profitability for our partners with environmental and social benefits.

That is why DLL partners with electric commercial vehicle manufacturers. Examples of these partnerships include Xos Trucks, Inc., based in Los Angeles, California, and E-Trucks Europe. These financing partnerships will further enable the transition from traditional diesel trucks to electric, and this will expand as DLL continues to partner with more manufacturers globally.

The expertise to finance sustainable solutions
DLL has the experience and expertise to best support our partners and customers in their transition towards a zero-emissions fleet. Tailored finance packages cover investment in new vehicles as well as associated costs like charging infrastructure, tires, roadside assistance, telematics, repairs, and maintenance.

Our sophisticated, international view on asset costs, life cycles and associated residual values means we can offer flexible, up-to-date solutions including global master lease agreements spanning multiple countries, regions, brands, and asset types.

DLL also understands that flexibility remains crucial in all financing options as sustainable transport and logistics solutions rapidly evolve, with businesses needing continued financial support to invest in new solutions as they emerge.

Learn more about financing your sustainable fleet solution
Find out more about how DLL’s fleet equipment experts will customize financing solutions that help improve business performance and lower your total cost of operation.