One key element of the strategy is Transport, and how the policies and proposals included as part of the Net Zero Strategy will impact this sector. These key issues have and will be continue to be discussed in greater detail at COP26, as cars and LCVs are the major polluters of our towns and cities in terms of carbon emissions.
In this article, I’ll be discussing what this means for consumers and businesses within the manufacturing, leasing, automotive and asset finance sector.
Manufacturing of electric vehicles
The government has pledged to plug £620 million into zero emission vehicle grants and the infrastructure needed to extrapolate the benefits of zero emission travel. Many local authorities will insist on public transporters to reach net zero in the imminent future.
A major part of this will be the mechanics of residential charging. Service stations and some households have EV charging points, but in order for EVs to be fully rolled out across the UK, residents of all property types will need access to charging points. This had resulted in the accelerated implementation of legislation to safeguard users and to increase the requirements of builders and providers.
A further £350 million will be injected into the ATF (Automotive Transformation Fund) to help EV supply chains and electrification of vehicles.
This has led to a raft of opportunities for UK based asset finance lenders, some of whom will easily recover sales volumes lost in the pandemic. We are now seeing well versed and competent funders who understand the technology, the terminology and of course the legal targets that their customers need to hit.
Investment into road freight
The £20 million zero emission road freight trials proved to be successful, which has given the government a platform to build from. Three zero emission HGV technologies will be trialled at scale following the previous trial.
This will enable data to be collected and considered. With this, operational benefits can be analysed and infrastructure needs met.
The pace of change is arriving at a scale completely unthought-of. As technologies improve across the battery, hydrogen and bio fuel channels, there will be a considerable thirst for funding. That being said, such funders need to be well advised in terms of security, contractual provision and the legislative matrix that covers same.