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The European truck industry faces growing competitive pressure. Chinese manufacturers are scaling up electric truck production rapidly and expanding in the global market. European truckmakers commit to battery-electric vehicles, but production expands too slowly to win the race. Efforts to weaken EU CO₂ standards risk slowing the very transition essential for their long-term competitiveness, handing an advantage to their foreign counterparts.
Green finance still plays no meaningful role in steering the sectors’ transition.
Truck makers rely on conventional bank loans and standard bond issuance. These channels provide ample capital, but they come without climate conditions. Green bonds, by contrast, remain unattractive. From a corporate perspective, they impose strict earmarking, extra reporting and closer scrutiny, with no clear financial upside.
A key factor is the absence of a consistent “greenium”. Green bonds do not reliably offer lower borrowing costs. For manufacturers with high current emissions and transition pathways still off-track, green debt seems to provide little incentive.
Regulatory uncertainty reinforces this pattern. Ambiguity around future EU truck CO₂ standards and difficulties aligning activities with the EU Taxonomy criteria weaken investor confidence. In this context, demand for genuinely green instruments in the truck manufacturing sector remains limited.
Capital markets do not yet distinguish between leaders and laggards in the truck transition. This allows manufacturers to continue relying on conventional finance while avoiding the discipline of green instruments.
Recommendations
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Truck manufacturers should launch pilot green finance projects to scale Electric Vehicle (EV) capital expenditure and send a credible signal to investors. This requires significantly improved transparency and ESG disclosures, particularly on Scope 3 emissions and green research and development (R&D) spending, to demonstrate the robustness of their transition strategies.
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Investors and banks should strengthen incentives for electrification by providing lower yields for genuinely green projects and making their support conditional on the development and implementation of robust electrification strategies.
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EU policymakers should provide regulatory certainty for investors by confirming and strengthening truckCO₂ standards and maintaining ambitious EU Taxonomy criteria for green truck manufacturing. This would enable capital markets to accelerate the transition.
