Just a week after we announced our non-binding Letter of Intent to acquire a 51% shareholding in Tembo 4×4 e-LV, the Australian government has unveiled an incentive plan for businesses investing in new electric vehicle (EV) fleets.
Uncertainty around the economic impacts of coronavirus led Treasurer Josh Frydenberg to announce in March that the government would delay releasing its budget until 6 October. And on Monday, with just over a week to go, The Sydney Morning Herald published an article stating the budget would include a $74.5 million package to help businesses trial new vehicle technology.
The funding will cover EVs, as well as hydrogen and biofueled fleets. It applies to acquiring the vehicles as well as installing charging infrastructure at workplaces across Australia.
Incentives will encourage businesses to invest in environmentally friendly fleets
These incentives coincide with our strategic pivot into the commercial EV market, starting with our investment in Tembo. The Netherlands-based company specialises in battery-electric and off-road vehicles, and has a global customer base across the mining, government services, game safari and humanitarian aid sectors.
Our chairman and CEO Kevin Chin called the acquisition a ‘win-win outcome for both parties’, especially given the growing interest in electric vehicles from our customer base.
‘There are over 700 active customers in our Aevitas business unit, many of whom have significant light commercial vehicle fleets powered by high cost diesel,’ he said. ‘The economic case for electrification is already compelling.’
This news only reinforces our commitment to a 3-pronged, EV-centred strategy, which will include:
- EV and battery leasing
- EV battery second life applications
- critical power retrofits at sites like warehouses and depots) to optimise EV battery charging.
The SMH article notes that EV advocates have been calling for these incentives to encourage businesses, and the government itself, to invest in more environmentally friendly fleets. For the government, this could include such vehicles as armored cars, police cars, ambulances and inspection vehicles, which Tembo already provides as part of its turn-key solutions.
An EV investment will bring significant operational cost savings over time
According to Tembo, making the switch to electric vehicles means a customer will:
- reduce its carbon footprint and produce zero emissions
- spend less on maintenance, including oil changes, and clutch and gearbox repairs
- experience less vehicle downtime thanks to a specially designed battery that lasts up to 10 years.
All of these contribute to significant operational cost savings.
These savings were confirmed by Ernst & Young, which analysed the industry for the Electric Vehicle Council, the national body representing EVs in Australia. They found that EV technology would give the government a net revenue benefit of $137 a vehicle each year – or nearly $9,000 over a 10-year span.
‘The rational thing for government to do,’ the Council’s CEO Behyad Jafari told the SMH, ‘would be to pull out all the stops to encourage transport electrification.’
We’re excited to be a part of that transformation.