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In the dynamic landscape of logistics and transportation, the shift towards sustainability has gained considerable attention, driven by new regulatory measures and the urgency to mitigate environmental concerns. The logistics sector is undergoing a substantial transformation with a significant move towards electric vehicles (EVs), especially electric trucks. To accelerate this transition, various governments across Europe have established financial incentives and subsidies, primarily focusing on battery-electric trucks. However, challenges remain in effectively implementing these subsidies to foster widespread adoption and industry-wide change.
EU-wide Policies on Electric Vehicles
Over the recent years, the European Union (EU) has been actively advocating for environmental sustainability in the transportation sector. Some of the EU’s incentives are designed to boost the adoption of electric vehicles, particularly trucks. These policies are not only driven by environmental concerns but are also intended to ensure a smoother transition for businesses adapting to new practices and technologies.
For instance, the European Green Deal, an ambitious policy initiative, aimed at achieving climate neutrality by 2050, places a lot of attention on transport, particularly heavy-duty trucks. With the help of this framework, substantial funding and research initiatives have been established to support the development and deployment of battery-electric trucks. The Clean Vehicles Directive also began to mandate a higher quota of zero-emission vehicles in public fleets, indirectly creating a broader market for electric commercial vehicles.
The Case of the United Kingdom
The ideal example of leading towards a greener future is the United Kingdom (UK). In the UK, the transition to electric vehicles is supported by various grants and tax incentives. For electric trucks, the government offers the Plug-in Truck Grant which reduces the cost of buying smaller trucks by 20% and larger trucks by up to £25,000. The maximum discount available for some small trucks is £16,000.
To be eligible for a grant of a smaller truck in the UK, the vehicle must:
- be between 4,250 kg and 12,000 kg gross weight;
- have CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity;
- be able to travel at least 96 km without any emissions.
Eligible vehicles currently include FUSO eCanter, Iveco eDaily, Magtec MEV75 (Incomplete), Paneltex Z75, and Tevva T7 – T133 (Incomplete).
To be eligible for a grant of a larger truck in the UK, the vehicle must:
- be heavier than 12,000 kg;
- have CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity;
- be able to travel at least 96 km without any emissions.
Eligible vehicles are Electra e-Compact, Electra e-Star 27-350, DAF CF Electric Tractor Unit, Dennis Eagle E-Collect RCV, Magtec IVECO ML180E25/FP (Incomplete), Mercedes-Benz eActros 300/400 4×2 (Incomplete), Mercedes-Benz eEconic (Incomplete), Renault Trucks D-Range, Volvo FE 6×2 (Incomplete), Volvo FH 4×2 Electric Tractor, Volvo FL 4×2 (Incomplete), and Volvo FM 4×2 Electric Tractor.
Furthermore, the UK government made sure that electric trucks benefit from lower taxes and exemptions from the congestion charge in London. As a result, these changes are making electric trucks an attractive option for logistic companies operating within urban centers.
Germany
Germany’s approach to electrifying truck fleets has been affecting multiple related fields, including direct subsidies, regulatory support, and significant investment in research and development. The country has recognized the crucial role of heavy-duty vehicles (HDVs) in its carbon emissions profile. To spur a significant shift in terms of sustainability in road transport, Germany has established targeted programs and incentives specifically designed to accelerate the adoption of electric trucks.
Germany’s efforts began with impressive financial incentives aimed at reducing the cost barrier of purchasing electric trucks. The Federal Ministry for Digital and Transport Infrastructure (BMDV) offers direct purchase subsidies through programs like the Electromobility Funding Guideline, which provides subsidies for electric vehicles, including trucks, that can cover up to 80% of the additional investment costs compared to conventional vehicles. Such initiative makes electric trucks a more attractive and realistic option for logistics companies.
Additionally, Germany has a subsidy scheme for setting up electric vehicle charging infrastructure targeting commercial fleets. The initiative aims to have 1 million public charging points available by 2030 and to invest more than €3 billion in charging infrastructure for cars and trucks by 2023. This program, part of the broader National Charging Infrastructure Strategy, helps logistic companies overcome one of the most significant issues when transitioning to electric trucking – the installation of necessary charging stations at logistic hubs and along major transport routes.
Germany also actively invests in research and development, recognizing the demand for innovation in the electric truck sector. The government partners with automotive manufacturers and technology companies with initiatives like the National Electromobility Development Plan. The plan focuses on advancing battery technology, electric drivetrains, and other key components essential for the practical implementation of electric trucks in commercial use.
Scandinavia
Known for its environmental initiatives globally, Scandinavia offers favorable incentives for electric trucks. For example, in Norway, electric trucks are exempt from purchase taxes and VAT, making them competitively priced against diesel trucks. In addition, Sweden has implemented a subsidy scheme that covers up to 35% of the cost of an electric truck. These impactful governmental policies reflect Scandinavia’s determination to create a sustainable transportation ecosystem.
Notably, Scandinavian countries are distinguished by the collaborative efforts among governments, industry stakeholders, and research institutions for aiming to accelerate the adoption of electric trucks. New policies across Scandinavia aim to create a cohesive and supportive environment for electric vehicles, including HDVs.
This collaboration across Scandinavian countries boosts the sharing of best practices, the development of cross-border infrastructure for electric charging, and the coordination of research on new technologies like wireless charging systems.
France
France has been active in promoting electric mobility through a combination of measures, such as national subsidies and local initiatives. These programs are aimed at commercial vehicles, including trucks. The French government offers a bonus, named the “ecological bonus,” which is applicable to light commercial vehicles and heavier electric trucks. This is great news for business owners and logistics companies as the bonus can reach up to €5,000, depending on the vehicle’s weight and emissions criteria.
Moreover, France developed a scheme that provides an incentive for replacing older, less environmentally friendly trucks with cleaner electric models. Travelling across France, you may discover that such regions as Île-de-France have implemented supplementary subsidies for businesses that choose to invest in electric commercial vehicles. These incentives can cover an additional percentage of the purchase price, making electric trucks an even more attractive option financially.
Evolution and Expectations for Policies & Incentives
Over the past years, the landscape of sustainable subsidies and incentives in Europe has evolved significantly. For instance, between 2015 and 2020, the EU increased funding for electric vehicle infrastructure through initiatives such as the Connecting Europe Facility (CEF) and Horizon 2020, which allocated billions of euros for sustainable transport projects. The European Green Deal, launched in 2019, further escalated efforts by setting ambitious targets for carbon neutrality by 2050, which included substantial funding and incentives for electric vehicles.
As the urgency to address climate change has intensified, so too has the scale and scope of these incentives. According to a 2022 report by the European Environment Agency, funding for EV infrastructure and subsidies for electric trucks have more than doubled since 2018, reflecting a significant policy shift towards decarbonizing the transport sector.
Looking ahead, it is expected that subsidies will not only persist but become more innovative. The European Commission’s recent proposal under the Fit for 55 package aims to cut emissions by at least 55% by 2030, suggesting mechanisms like carbon pricing and substantial direct investment in EV infrastructure as key strategies. These statements and strategic plans indicate a clear trajectory towards more comprehensive and inventive subsidy frameworks, designed to support the long-term viability and adoption of electric trucks across Europe.
Total Cost of Ownership & Long-term Financial Viability
One of the primary concerns regarding electric trucks has been their high initial purchase price compared to traditional diesel trucks. However, when considering the total cost of ownership (TCO), electric trucks increasingly present a smart alternative.
Subsidies significantly reduce upfront costs, and the lower ongoing expenses for maintenance and energy (electricity vs. diesel) further enhance their economic appeal. According to a report by the International Council on Clean Transportation (ICCT), electric trucks can achieve TCO parity with diesel trucks by the mid-2020s, largely due to these lower operational costs and available subsidies.
Over time, the costs are expected to be even more in favor of electric trucks. Battery prices are declining due to technological advancements and increased production scale, which directly reduces the purchase price of electric trucks. BloombergNEF’s 2022 Electric Vehicle Outlook report notes that battery pack prices have fallen 89% in the past decade and are expected to continue declining.
Embracing the Electric Future
The push towards an electric future in Europe is supported by a large scale of financial incentives and subsidies across nations. These efforts are expected to redefine transportation for a sustainable future. For companies in the logistics and transportation sectors, such as Girteka, subsidies not only promise substantial financial support but may also result in a lower total cost of ownership (TCO). This makes the transition to electric trucks a strategically and economically sound decision.
The evolving policies and technological advancements signify a promising horizon for the adoption of electric trucks. However, for the electrification of fleets and the adoption of electric cars to be truly effective, subsidies and financial incentives must be available across all of Europe. When some countries provide support for these investments while others do not, it can create disparities that reduce the feasibility of implementing electric trucks on a broader scale.
