Electric fleets offer a great opportunity to significantly reduce emissions, but the transition from fossil-fueled trucks to electric vehicles (EVs) is still in its infancy in Canada. The road transportation sector alone accounts for 21% of Canada's total greenhouse gas emissions, so decarbonizing the transport sector is critical to achieving the federal government's ambitious climate commitments.
The challenge is that electrifying truck fleets requires support from a whole ecosystem of actors – from getting the right manufacturer and project developer, to accessing proper financing.
That's why Vancity Community Investment Bank (VCIB) is providing a $3.2-million loan to Vancouver-based Seven Generation Capital (7Gen) to acquire ten electric trucks and the required EV fast chargers. It will then lease those trucks to GoBolt, a growth logistics firm that offers secure storage and e-commerce fulfillment to big retailers.
While similar business models have been used to finance things like solar panels, this loan is one of the first of its kind in Canada for EVs. "It makes all the difference for businesses looking to make the switch to clean energy", explains VCIB’s Head of Clean Energy Deal Structuring, David Berliner.
“A company like 7Gen can become a one-stop shop for electrification, creating a very compelling business model that makes it a lot easier for more customers to make the switch,” he says. “Financing is the fuel that’s required for those business models to work.”
This EV fleet is estimated to reduce CO2 emissions by 4,140 tonnes over the trucks’ seven-year lease period, which accounts for an annual reduction of 491 tonnes compared to trucks using internal combustion engines.
7Gen's service model and VCIB’s specialized financing reveals a new business model that can facilitate Canada’s EV fleet transition.
“To make these projects work, we need a lender who’s pragmatic and willing to work with us to figure out the details,” says Frans Tjallingii, 7Gen’s CEO. “Financing is not just about the money, it’s about value alignment and finding a financing partner who shares your goals.”
As part of the Vancity Group, VCIB is committed to becoming net-zero by 2040 across its lending portfolio. “Our partnership with 7Gen aligns with our climate commitment, provides cost savings, and will advance cleaner transportation systems in Canada,” says David.
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