Government backs Volvo with $70 million to make electric trucks more affordable in Australia

The Australian government will invest $70 million with Volvo Group Australia to accelerate the electrification of the nation’s trucking fleet with Australian-made electric trucks.

Australia’s minister for climate change and energy Chris Bowen says the funding, delivered through the government’s Clean Energy Finance Corporation (CEFC), will provide discounted finance and residual-value support to help more operators transition from diesel to locally built electric trucks.

The $70 million investment will support discounted financing to lease electric trucks, support to improve end-of-lease values, and support the installation of charging facilities at their depots.

“The Albanese Government is backing battery electric trucks in Australia while driving down costs for heavy electric vehicle and positioning us as a global leader in low emissions transport technology,” said Bowen.

“We want to give more Aussie businesses the opportunity to benefit from lower running costs of EV ownership.

“Australia is a country that runs on trucks, and with more and more Australians choosing to shop online, the switch to electric trucks could not come at a better time as we deliver on our climate ambitions.”

The announcement comes ahead of the planned start of local manufacturing of electric trucks at Volvo’s production facility in Wacol, Queensland.

Volvo Trucks announced earlier this year that it would for the first time begin manufacturing Australian-made heavy-duty electric trucks at its Wacol facility in 2026. With a full portfolio of electric heavy vehicles, Volvo Group Australia hopes to expand the nation’s manufacturing capabilities and accelerate the adoption of electric trucks.

And with transport currently accounting for around 22 per cent of Australia’s total emissions, decarbonising the country’s freight industry is vital, as road freight activity over the next 15 years is expected to increase by an estimated 40 per cent, which will in turn see the sector become the largest source of emissions by 2030 without continued action.

Zero and low emissions trucks can be two to four times more expensive to purchase than a diesel truck for the same task and despite their lower running costs the high cost of BEVs and uncertainty about their depreciation rate compared to diesel equivalents is reflected in lower residual value expectations, and increased leasing costs.

“This program is designed to make the transition more affordable, allowing more of our customers to take that first vital step towards a fossil-free future for the benefit of all Australians,”  Volvo Financial Services Managing Director David McGuire said.