The move to clean energy is on for commercial truck dealers, original equipment manufacturers and upfitters looking for opportunities to retain and gain a competitive advantage and meet environmental and sustainability goals. Electric vehicles are among the first sustainable energy initiatives in the transportation marketplace, and there are multiple benefits that make the move to electrification an attractive option. Specialty finance company Mitsubishi HC Capital America provided five key reasons why making the move to electrification makes good business sense.

“The complexity and rapidly shifting dynamics of commercial vehicle electrification can be daunting for companies to consider, but a careful review of EV market conditions and opportunities makes a compelling business case to make the transformation,” John Critelli, director of corporate development, mobility solutions and transportation finance at Mitsubishi HC Capital America, said. “We are pleased to provide these key considerations to help guide companies in their strategic decision-making.”

Key Reasons to Move to Electrification

1. Favorable costs. The costs associated with electrification will likely never be less expensive than they are currently. While battery pack prices are expected to decline over time, it is projected that infrastructure hardware, software and installation costs will continue to rise. In 2021, approximately 72% of vehicle applications had positive battery electric vehicle (BEV) total cost of ownership, and that number is forecasted to increase to 100% by the year 2030, according to a summary of findings from a report from ACT Research.
2. Market opportunity for BEVs. The market opportunity for dealers, OEMs and upfitters is massive. The global BEV market is anticipated to reach $300 billion by 2027, according to Global Market Insights, an increase from 2021 levels of $150 billion. In addition, according to Grand View Research, between 2021 and 2021, the EV market in North America will grow at a compound annual growth rate of 37.2%. While the overall BEV market has experienced a slowdown in demand during the COVID-19 pandemic, it has created unprecedented demand in the final mile industry. Customer preference for EVs, stringent emission regulations on fossil fuel-powered commercial vehicles and supportive government policies are once again fueling growth.
3. Market opportunity for charging infrastructure. Buying and selling BEVs is one thing; charging infrastructure is another. This equipment —often referred to as charging stations, EV chargers or EV supply equipment — supplies the electric power for charging vehicles. As demand for BEVs surges, so will the need to implement charging infrastructure sooner rather than later. Developing this infrastructure can be complicated and time consuming, and companies trying to tackle this on their own can find it overwhelming. Considering the logistical, technical and financing perspectives, getting charging infrastructure in place can take six to 18 months. The payoff possibilities are significant, and it’s important for dealers, OEMs and upfitters to start the process now while the incentives and rebates are in place to assist with the financial transition.
4. Incentives. It is important that companies contemplating the transition to EVs understand that there are two types of incentives available, one for charging infrastructure and one for the EVs themselves. Currently, the U.S. federal government offers a tax credit for EV charging hardware and installation costs covering up to 30% of the costs (maximum $30,000). Many state and regional authorities and utility companies also offer incentives. Altogether, in some cases, these programs can cover 50% to 100% of a full project’s cost. Programs are continually changing, though. Some may expire, and at the state level, it’s often a “first-come, first-served” situation. Moving ahead as soon as possible will allow dealers to leverage as many incentives as possible.
5. New revenue streams. For dealers, there is an additional opportunity, which is to become a certified charging reseller. Dealers can earn additional margins by providing ongoing service and support for charging infrastructure. Beginning the process now can help establish dealers as top providers of EV solutions in their markets.

“For companies researching, running numbers and struggling with when to start making the transition to EV, support and resources are available to ease the way,” Critelli said. “Mitsubishi HC Capital America’s Mobility Solutions has the market-leading capabilities, expertise and relationships, as well as fully-bundled financing solutions, to ease the transition into the next generation of trucks.”