Newsletters

On 25 August, the International Transport Forum (ITF) released their new report, entitled Financing the Electrification of Heavy-Duty Vehicles. It examines the financial and regulatory challenges hindering the widespread adoption of electric trucks and buses. While electrification of urban buses has advanced rapidly—particularly in China and Europe—electric trucks and intercity coaches remain at an early stage due to higher upfront costs, uncertain residual values, and limited access to affordable financing, especially for SMEs. The report highlights that achieving total cost of ownership parity between electric and diesel heavy-duty vehicles is essential but not sufficient on its own; structural barriers, such as banks’ reluctance to finance e-HDVs due to perceived technological and market risks, must also be addressed.

Governments and financial institutions play a critical role in accelerating the transition. The report recommends targeted policy interventions, such as residual value guarantees (RVGs) and concessional loans, to reduce financial risks for lenders and operators. The report also emphasises the importance of innovative business models, such as trucking-as-a-service and battery-as-a-service, which decouple vehicle ownership from operations, reducing upfront costs and financial risks for smaller operators.

The fragmentation of the heavy-duty vehicle market, dominated by SMEs with limited financial resources, further complicates electrification efforts. Unlike urban buses, which often benefit from public sector funding or large-scale fleet procurement, trucks rely heavily on private financing, where SMEs face disproportionate challenges. The report notes that without coordinated policy support, including zero-emission zones, differentiated road tolls, and carbon pricing, the transition to e-HDVs will remain slow. Such measures not only incentivise adoption but also help distribute risks more equitably among stakeholders, including manufacturers, logistics companies, and financial institutions.

The ITF is hosting a “Ask the Author” webinar to discuss the report on 9 September at 14:30 CET. Registration is available via this link.

Source: International Transport Forum