Unlocking Capital for Zero Emission Trucks

Investment Rating - The report does not explicitly provide an investment rating for the zero-emission truck (ZET) industry, but emphasizes the need for innovative financing solutions to accelerate market growth and adoption in India [9][11]. Core Insights - The trucking sector in India is responsible for 34% of CO2 emissions and transitioning to ZETs is essential for achieving net-zero targets, offering benefits such as reduced emissions and lower logistics costs [9]. - Access to affordable financing is identified as a critical lever to accelerate the transition to ZETs, as current financing products are limited and often come with higher interest rates compared to diesel vehicles [10][11]. - The report highlights successful global examples of financing solutions in markets like China, Europe, and the United States, which accounted for 95% of new electric trucks sold worldwide from 2020 to 2023 [12][28]. Overview of ZET Finance Landscape in Key Global Markets - The United States, China, and Europe are the leading regions for ZET sales, utilizing a combination of government grants, tax incentives, and innovative business models to support ZET financing [34]. - In the U.S., tax incentives and concessional loan programs are in place to promote ZET manufacturing and purchases, while California has launched a Zero-Emission Truck Loan Pilot Project to provide loan guarantees [36][45]. - Europe benefits from the European Investment Bank's concessional loans and various national programs that support ZET purchases and charging infrastructure [37]. - China has implemented a range of policies, including direct subsidies and tax benefits, to promote ZET manufacturing and purchases [38][39]. Financial Solutions for ZETs - The report identifies three key financial solutions: risk-sharing facilities, ZET insurance products, and mobility-as-a-service (MaaS) [30][31]. - Risk-sharing facilities, such as loan guarantees, can enhance creditworthiness and reduce lender losses, thereby facilitating access to low-cost financing for ZETs [43]. - ZET insurance products are essential for protecting truck owners from unforeseen risks, but they are currently more expensive than diesel truck insurance [62][64]. - The MaaS model allows fleets to lease ZETs along with additional services, effectively distributing ownership risks and lowering market entry barriers [89][90]. Case Studies and Global Best Practices - The report examines successful case studies from California's Zero-Emission Truck Loan Pilot Project, which provides loan guarantees to small fleet operators, and highlights the importance of public-private partnerships in financing ZETs [45][60]. - In China, innovative insurance solutions and regulatory measures have been implemented to address high insurance costs and improve the availability of ZET insurance products [66][78]. - The report emphasizes the need for India to adapt these global best practices to its unique market conditions to build a thriving ZET market [18][42].