Vehicle asset funders will need manufacturers support for carbon zero vehicles, says Close Bros.

Vehicle financing businesses will need the support of the vehicle manufacturers in developing new funding solutions to aid the journey to carbon zero, Close Brothers’ head of national accounts and ESG, Andrew New, told delegates at the recent Logistics UK 'Delivering decarbonisation' conference in London.

In a candid presentation, New was explaining the challenges the finance sector is facing as it seeks to support the logistics industry on its decarbonisation journey. “Funders are in a similar position to most in the sector,” he said. “Everything we thought we knew [about asset funding vehicles] is obsolete as we shift to electrification of trucks. It is essential the finance community steps forward and supports the sector, but the cost and uncertainty is enormous.”

Plotting the future residual values of carbon zero trucks was virtually impossible, he added, “we have no idea what the five-year value of these vehicles will be.”

Moving forward, New said the finance sector would require early manufacturer support to prime the market, whether that was through buybacks or support for enhanced end of term balloon payments. “No funder will take the sole risk without support,” he said, while also adding the traditional funding approach was changing, with pay per use emerging as a new model. “This will require collaboration between the energy provider, vehicle OEM and the funder,” he concluded.

For an extended review of the presentations and topics covered at the 'Delivering decarbonisation' conference see