After last month’s $3.2-million EV fleet project financing deal with Vancouver-based 7 Generation Capital, Vancity Community Investment Bank says it is looking for more opportunities to help fund transportation’s transition to net-zero
Vancity Community Investment Bank (VCIB), a subsidiary of Vancity Credit Union, the largest community credit union in Canada, is setting its sights on providing innovative financing to help fuel electric vehicle fleet adoption.
In an announcement last month, VCIB partnered with 7 Generation Capital to finance the purchase and lease of 10 EV trucks and the required fast chargers for fleet users — in this case, logistics provider GoBolt.
VCIB has committed $3.2 million to the deal, its first in this space. Previous VCIB investments have gone into real estate, social and environmental issues, and clean energy.
David Berliner, VCIB’s head of clean energy deal structuring, says the bank specifically looks to provide loans to ideas that reduce carbon pollution and accelerate the transition to clean energy transportation.
“Right now, transportation is one of those sectors that’s rapidly going to decarbonize and needs to decarbonize,” says Berliner in an interview with Electric Autonomy Canada.
VCIB viewed 7Gen as an attractive company to fund because of its ability to offer a variety of services to clients.
7Gen helps companies convert diesel and gas-powered fleets to electric using an “EVs-as-a-service” model that provides vehicle leasing, installation, management and financing of charging infrastructure, and software to operate one’s EV ecosystem.
As well, according to a VCIB spokesperson, the relatively small loan is one that typically wouldn’t interest larger banks.
“We’re really excited to link up with them, understand what they’re doing, and start this first transaction which we hope is part of a larger partnership with them and part of a larger focus for Vancity financing clean transportation,” Berliner says.
Banking support for the EV industry
Berliner believes financial institutions have a critical role to play in addressing climate change.
In order to get to a net-zero transition, a variety of climate technology will need to be deployed.
Globally, he says, it will cost trillions of dollars to get there. So, with banks having financing expertise in different areas, Berliner views those institutions as collaborators who know how to successfully manage and scale clean energy tools such as EVs.
“Financial institutions know how to finance infrastructure, we’ve been financing roads, bridges, and hospitals for decades,” Berliner says. “We’ve already seen how when financial institutions get [into] sectors like solar or wind, they can rapidly scale up to be multiple $100-billion-a-year sectors.”
Despite the rise of EV vehicle registration in Canada, he views it as a sector that still has potential to grow, with support from lenders essential.
“We’re looking to do it with sectors that are less mature, but will need to rapidly scale over the next decade,” Berliner says.
“Electric transportation being one of those that are at the cusp of a massive growth rate.”
Benefits of an “EVs-as-a-service” model
7Gen’s all-encompassing fleet electrification package is part of an emerging business strategy that shifts the perception of the customer-supplier relationship.
Touted as “as a service,” this model changes the idea that companies not only supply a product but also facilitate and offer value in use.
7Gen, specifically, helps companies understand cost structures, EVs and chargers that will best suit their needs. Its services are offered through a singly monthly bill — dropping the upfront cost it would take to afford EVs.
Basically, 7Gen is paid to operate and manage the fleet network, and it works to help small and mid-sized businesses overcome initial challenges in electrifying their fleets.
Berliner views this as the best way to rapidly scale clean energy technology like EVs.
“If we look back at what allowed the cars in the Model T era to reach a more massive market was the innovation and financing,” he says.
“That the early car producers came up with the ability to offer credit, and turn a large, upfront, capital cost into ongoing monthly payments.”
Where is VCIB looking next?
In June, VCIB partnered with Accelerate, an alliance of Canadian companies in different sectors — from mining to mobility — that supports the development of a ZEV supply chain in Canada.
By partnering with Accelerate, VCIB hopes to play a bigger role in building a strong and integrated EV supply chain. The goal is that by looking at the full ecosystem — resources, labour, manufacturing — opportunities and challenges will be presented to guide plans on how to build a successful supply chain.
“If Accelerate is successful, they’ll be helping that sector all the way through the full supply chain and electric vehicle market,” Berliner says. “It’s going to be a cornerstone of building that market in Canada.”
As Accelerate speeds up the EV ecosystem in Canada, VCIB hopes that will lead to more projects for it to finance.
“[Accelerate] will lead to more opportunities for end users to have the [EV] transitions, there’ll be more education, case studies, vehicle options,” Berliner says.
Transportation plays a large role in greenhouse gas emissions. So, moving forward, Berliner says the bank is hoping to continue backing initiatives that spark fleet electrification.
“The transportation sector [accounts for] 27 per cent of Canada’s gas greenhouse gas emissions and fleets have the ability to rapidly decarbonize,” Berliner says. “We want to continue to finance those fleet electrification transitions.”