Electric vehicles are becoming more accessible as major manufacturers roll out new models. HSBC is helping drive change on this front by supporting automakers like China's Geely, which is ramping up production of electric vehicles.6 Geely's commercial vehicle arm, Farizon, plans to roll out an electric truck in 2024.
The US Inflation Reduction Act (IRA), signed into law last year, will also boost the EV market with its inclusion of tax credits for clean vehicles – up to US$7,500 for light- and medium-duty vehicles and US$40,000 for heavy-duty trucks. The European Commission in February proposed stricter emissions limits for heavy-duty vehicles, including a 90% emissions reduction by 2040, relative to 2019 levels.
But there are hurdles. While improvements in battery technology are allowing the electrification of bigger vehicles across longer distances, the lack of charging infrastructure is hindering the mass adoption of electric fleets. Charging electric vehicles also takes more time than filling a tank with diesel, which can lead to lower margins for delivery companies by forcing delivery vehicles off the road for longer periods.
The good news is that investment in electric charging infrastructure is growing rapidly. HSBC is supporting companies like ChargePoint and Blink Charging on their expansion of global EV charging networks, while major logistics businesses are installing their own chargers at their distribution centres.
Easier access to charging points would not only make operating electric vehicles more practical, but can also allow for the use of smaller batteries, which would make them considerably cheaper.