£1 billion to cut costs for businesses, drive growth and clean up UK roads

Businesses across the UK are being backed to roll out electric vans and trucks with £1 billion of funding – saving them cash, cleaning up millions of journey miles, and helping hauliers become more resistant to global price changes.

The Zero Emissions Truck and Van grants and the Depot Charging Scheme (DCS) aim to tackle two of the biggest barriers to businesses making the switch – upfront costs and access to charging.

Global fuel price uncertainty is challenging for businesses, and these grants will support industry to switch to electric, helping to reduce exposure to fuel price uncertainty.

The truck grant will offer savings of up to £81,000 off the heaviest zero emissions trucks, covering up to 40% of the cost. The van grant will continue to offer discounts of up to £5000 off the cost of electric vans.

On top of that, businesses and public authorities could save up to £1 million, covering up to 70% of the cost, when installing charging infrastructure for vans, coaches, and eHGVs, thanks to a £170 million boost to the government’s Depot Charging Scheme.

Aviation, maritime and decarbonisation minister Keir Mather, said: ‘This £1 billion investment cuts cost for British businesses, supports jobs, cleans up our roads, and gives operators protection against shifting global fuel prices.

‘The logistics sector is the backbone of the UK economy, worth £170 billion and supporting 2.7 million jobs. We are helping them expand and decarbonise their fleets whilst saving them cash, driving growth up and down the country.’

The new funding comes after the government announced an £18 million uplift in January to slash up to £120,000 off the cost of green lorries, making it cheaper for businesses to go electric, with companies like M&S and Wren Kitchens and Bedrooms taking advantage of funding to decarbonise their fleets and reduce operational costs.

Lee Holmes, transport and logistics director at Wren Kitchens and Bedrooms, said: ‘Government investment gives businesses like Wren the confidence to accelerate fleet decarbonisation while maintaining operational stability, even in periods of economic uncertainty.

‘With this support, we have brought a number of 44 tonne e-trucks into our fleet alongside a rapid charging infrastructure, reducing our reliance on traditional fuels and strengthening resilience and reliability against ongoing market volatility.’

Julian Bailey, head of group transport at M&S, said: ‘In 2021, we set ourselves the ambitious target of becoming a net zero business across our value chain by 2040. Since then, we have made some great progress, which includes the onboarding of 24 battery electric vehicles across our transport fleet.

‘We welcome this investment which serves as a reminder of the importance of the logistics sector in the UK and its role in decarbonisation.’

With the expansion of EV vehicles in the UK, it is also crucial to expand the country’s charging infrastructure and so the government is spending over £600 million to rollout hundreds of thousands of EV chargers, giving drivers the confidence they will be able to charge up whether at home, at work or on the go. This will build on the over 118,000 chargers already available.

Toby Poston, BVRLA Chief Executive, said: ‘The Depot Charging Scheme is playing a vital role in helping fleet operators and rental companies to install affordable, reliable charging infrastructure at their depots.

‘The vehicle rental sector faces one of the most challenging paths to decarbonisation, and this additional support for depot charging will play a major role in building confidence. It will encourage more rental operators – particularly SMEs – to electrify at scale, reduce costs, and contribute to the UK’s net zero goals.’

The SMMT says that the news is welcome  for businesses working to decarbonise HGVs, vans and coaches with the lates £38 million application window under the Depot Charging Scheme recognising a fundamental principle of the vehicle transition: operators cannot invest confidently in ZEVs without somewhere practical and affordable to charge them.

Support covering 60% of eligible charge point and civil costs, up to £1 million per organisation, will certainly help turn more fleet ambitions into investment decisions for those operators that have the resources available. Also positively, the multi-year programme shows government sees commercial vehicle infrastructure as a continuing priority rather than a one off intervention. A long term guarantee of financial support is one of the key market signals that operators need to begin the complex process of fleet decarbonisation planning.

However, the SMMT warns that funding alone isn’t the silver bullet to drive decarbonisation of heavy duty vehicles. A charger is only useful if there is ready electricity supply, so grid capacity and connection delivery must also urgently be treated as central considerations – not a time consuming and complex administrative challenge for operators to navigate. Government’s forthcoming announcement of the HGV charging strategy is important, therefore, as is the outcome of the HGV CO2 consultation which must reflect real world market realities.

In many cases, infrastructure support doesn’t remove the wider commercial challenge either as operators still need to make the business case stack up – which is tougher for SMEs who represent a majority of the market.

Different fleets also need different solutions. A van returning to base each evening presents a different charging requirement than a long distance HGV or a coach carrying passengers far from its depot. Over the longer term, depot investment must be matched by reliable and accessible enroute and destination charging, including for coaches, which are often overlooked.

The organisation continues – future grant rates are inevitably likely to fall as the transition gains momentum but, particularly for the heaviest vehicle markets, that is some time away. Getting the market ready requires a focus now on aligning funding with grid delivery and public infrastructure, creating a workable ecosystem that makes fleet decarbonisation a much easier consideration for the vast majority.

Aymeric Larcher, managing director, Renault Trucks UK & Ireland, commented:  ‘We very much welcome the government’s continued support for depot charging infrastructure. Installing the charging facilities needed to operate electric trucks represents a substantial investment, and for many operators, it is one of the main barriers to making the switch.

‘With more than 3500 Renault Trucks electric vehicles having collectively covered over 130 million kilometres in real world conditions, electric trucks are already proving themselves across a wide range of operations. But having the right charging infrastructure in place is as important as the right vehicle.  

‘This funding will help more businesses invest in the depot charging facilities they need, whether introducing electric trucks and vans for the first time or expanding their existing fleets. It is a positive signal to the industry and an important step in making electric trucks a more accessible commercial choice.’ 

Rhian Burrell, managing director, Vertellus, agreed: ‘The government’s continued funding for depot charging is welcome news and will help reduce the upfront investment required, making it easier for businesses to take the next step towards electric trucks and vans.

‘Through our EV Discovery Programme, we are already helping operators understand how electric trucks can work within their fleets. This additional support will help businesses build on this experience, with the charging infrastructure needed to support their operations.’

Simon Smith, CEO, Voltempo, said: ‘We welcome the government’s continued investment in depot charging for commercial fleets. It recognises the vital role logistics plays in the UK economy and the need to make the move to electric more affordable.  At Voltempo, we have already helped several operators install charging infrastructure from previous DCS rounds. But getting chargers in the ground is only half the story. Energy costs, grid connections and making better use of that infrastructure are critical to getting the economics right.

‘By bringing fleet demand together, we can secure cheaper, more predictable energy and help operators earn revenue from charging capacity that would otherwise sit unused.

‘Electric freight has to pay. Charging is at the heart of that equation. Get the economics right and fleet electrification becomes a commercial opportunity.’