Ferronordic receives government funding in Germany of up to 23 MEUR for investments in electric trucks, Ferronordic GmbH, press release.

Ferronordic receives government funding in Germany of up to 23 MEUR for investments in electric trucks, Ferronordic GmbH, press release.

The Federal Ministry of Digitalization and Transport has awarded Ferronordic a grant of up to 23 MEUR for the investment of up to 117 electric trucks. Ferronordic plans to use subsidized electric trucks from Volvo and Renault Trucks to grow its electric truck rental business and sustainable transportation solutions.

In 2022, Ferronordic established a separate subsidiary in Germany, Ferronordic e-Rental GmbH, which focuses on the rental of electric trucks, chargers and the development of sustainable transportation solutions. This was part of Ferronordic’s strategy to develop expertise in the operation and management of fleets of electric trucks and construction machinery, including charging and upgrading the charging infrastructure. Over time, the goal is also to find opportunities to provide transportation and construction services based on electric vehicles and machines.

Ferronordic e-Rental has received funding of up to EUR 23m from the Federal Ministry of Digitalization and Transport for investments in electric trucks. The amount will be used to buy up to 117 electric trucks in the next 12 months. The final amount of the subsidy depends on how many electric trucks are ordered from Ferronordic. The condition for granting the subsidy is that Ferronordic e-Rental GmbH remains the owner for at least four years and achieves a minimum annual use of the vehicles.

The total value of the 117 electric trucks (before subsidies) is around 40 MEUR. Once the trucks are purchased, funding should be received by 2026 at the latest. Ferronordic will work with its suppliers and financial partners to achieve the best financing solution for sustainable transport. The used trucks will be owned by Ferronordic e-Rental and will be added to Ferronordic’s fleet of electric trucks for rental and sustainable transport.

Funds received will be fully used to reduce the rental price of electric trucks, thus making the transition to zero-emission transportation more attractive to our customers. We expect that the total cost of ownership of electric rental cars will be lower than the equivalent cost of diesel rental cars in most applications.Says Patrick Holm, Managing Director at Ferronordic e-Rental.

The purchase of the electric truck is supported by the Federal Ministry of Digital Affairs and Transport as part of the government funding program “Vehicles and Climate-friendly Business Infrastructure (KsNI)”. The sponsorship program is coordinated by NOW GmbH. Applications are approved by the Federal Office of Transport and Mobility. The goal of the program is to reduce CO2-inefficient commercial vehicles and expanding the charging infrastructure for electric trucks in Germany. The program aims to cover 80 percent of additional investment costs for electric vehicles and infrastructure.

Lars Corneliusson, CEO of Ferronordic, comments:

This is an important step for our electricity rental business. Volvo Trucks and Renault Trucks are pioneers and market leaders in battery electric trucks. We work closely with our partners and customers to develop sustainable transport solutions. The federal government’s funding program will contribute to the transformation of the travel industry. This will open up opportunities throughout the value chain and help our communities and environment. We are very excited about the possibilities that electric trucks offer. “.

The impact on Ferronordic’s income, cash flow and balance sheet depends on the size and duration of the investment. The company will provide further disclosure of these developments as more details of Ferronordic’s grant program and investment plans become available.