Several factors are driving global interest in switching to electric construction equipment and vehicles. DLL’s asset finance experts offer advice on how manufacturers, dealers, and end users can make this change, and what benefits it could bring to their business.
Electrification in construction – why now?
Governments are increasingly introducing regulations regarding sustainability (for example, EU Taxonomy). This also includes policies and strategies for the establishment of targets for reduction of emission of greenhouse gases (European Green Deal). This is resulting in various businesses looking at ways to diversify their traditional IC (internal combustion) engine powered fleets with battery powered electric equipment instead.
In some cases, major European cities have specific initiatives and projects that require that any equipment used within urban construction projects has reduced emissions. Therefore, to win business, contractors need to do all they can to demonstrate that they are keeping emissions at necessary levels The choice of equipment is often the first place that these companies look to make that change.
Aside from these projects, many organisations are also implementing green objectives, often with targets specifically related to direct and indirect emissions. Adopting electric fleets is one way these businesses want to achieve their environmental goals.
Electric equipment offers advantages
Another driver for making the transition to electric equipment are the potential benefits they can bring to a site. Compared to IC equipment, electric machines often require less servicing and maintenance. This reduces the associated costs and helps support uptime on site.
An additional benefit of electric equipment is that reduced emissions at construction sites may support the health and safety of workers, as they don’t breathe any exhaust fumes.
Electric construction equipment is now reportedly tough enough to take on multi-shift construction operations, with the added benefit of simple battery charging or changing to keep fleets working. In the materials handling equipment sector, businesses may experience that in the long term, running costs for electric equipment can be lower. It is possible that electric construction equipment may lead to similar benefits.
Making the move
Investment in electric construction machinery is picking up pace. The shift to electric motive power has already taken place for many businesses in similar industries, such as materials handling, in recent years. Though widespread adoption is not yet in place in the construction sector, it is likely to be a case of ‘when’ not ‘if’ the move to electric equipment happens. Businesses should therefore consider their strategy now to be a first mover and ready for increasingly tighter regulations.
It's not a simple switch
However, moving to an electric fleet is not without its challenges. For example, most electric equipment has a higher initial cost, making it harder to buy assets outright. This may make the transition seem unattainable.
Likewise, electric equipment will require a new battery charging infrastructure. This also demands investment and will likely need reorganization of sites to install and accommodate charging areas.
This is an area still in its infancy, which also presents challenges. The rollout of electric construction equipment still has many unknowns and equipment technology will continue to develop. This can make it harder to get internal buy-in for the transition from stakeholders and equipment operators alike. It can also make it harder to secure loans or finance agreements to cover the investment from a bank.
The first step in transitioning to electric construction equipment
To overcome these barriers, it is key to have a reliable finance partner that can offer the flexibility of an operating lease, with fair market values at the end of the term. This helps to drive down monthly instalment payments helping make financing electric equipment more attainable.
With over 50 years in leasing, the DLL team is committed to building partnerships to accelerate sustainability in construction by providing a range of custom finance solutions globally.
As a finance partner, DLL can offer businesses the opportunity to electrify their fleets of equipment such as excavators, wheel loaders, dumpers, and more. Once the electric machines are available on the market, DLL can help businesses invest in these assets in an affordable way, with simple monthly instalment payments.
A tailored finance package from DLL can extend beyond the equipment asset. It also is also open to supporting investment in charging equipment or extra batteries for multi-shift operations. Funding for elements such as repair, maintenance, and insurance can be considered as part of the modular solution.
Though the electrification of construction sites is still in its early stages, DLL has the experience of the transition to electric equipment in other industries and can apply this expertise to businesses in the construction industry. Adapting and learning with the market as it changes enables DLL to provide the right solutions, while helping businesses manage costs.
Helping manufacturers and dealers stay competitive
In addition to offering opportunities to end users, such as construction contractors, DLL is prepared to support manufacturers and dealers as the industry transitions to electrics.
In partnering with DLL to provide finance solutions, vendors and distributors will have the ability to offer full support to their client base as they navigate this significant change. Being an innovative financing company, trying to explore and develop new financing solutions for electric equipment, is an important differentiator, enabling OEMs, dealers, and equipment suppliers to be more competitive and to secure new business.
Partner with DLL for sustainable construction finance
DLL is already talking to businesses about their strategies for moving to electrics and is ready to support future development projects. Get in touch to discuss your electrification strategy and how DLL can help you invest.
