With the EV industry quickly evolving, the need for tailored financing for corporate fleet operators has become an area requiring innovation and development. Traditional lease financing products have not kept up with the pace of change, meaning they were no longer meeting the market demand. Leading EV battery makers are taking a leading position by implementing buyback programs which allow for financing of battery power packs at 100% of purchase price, marking a breakthrough in how EVs are financed.
EVs differ considerably from fossil fuel vehicles in that there is not yet a dependable residual value, due to the portability of the battery power pack. This has required a rethink in the lease financing space, with
MEG also announced increased EV revenue activities for 2020, due to the implementation of the new financing products enabling a faster time to market for fleet customers.
"We anticipate finalizing the structuring of the new financing products in Q4 of this year, with roll-out in Q1 2020, and an expectation for these products to impact our revenue activities from Q2 2020 onwards. We will continue with our existing EV financing programs through Q4 2019, and Q1 2020, so that we can deliver on the orders already underway, such as the Taxi orders for
MEG has also announced a clear focus on its areas of activity in the commercial EV industry, which are four distinct commercial vehicles types with supporting income streams: 1) Closed-area heavy commercial, in areas such as Mining, Airports, and Sea Ports; 2) Last-mile delivery light commercial; 3) Buses and Coaches; 4) Taxis. MEG focuses on commercial EV rather than passenger EV, as commercial EV is on an accelerated adoption path when compared to consumer EV adoption – which is expected to take between ten to fifteen years. Additionally, commercial EV represents a vastly higher portion of energy consumption.
The company has previously announced, among other deals, 500,000 commercial vehicle orders over 3 years which were acquired through its MEG stakeholder GCL. These order activities will form part of the those fulfilled under the new finance programs. MEG further anticipates its battery, sales, and financing activities to be the main revenue streams in 2020. Other activities, such as energy sales through pre-paid discount electricity purchasing and charging networks, will continue to develop in 2020. Currently, it sees significant innovation in the charging space which is improving the charging times when compared to existing charging apparatus. It is working with industry partners on the time to market, with indications suggesting early revenues commencing in the second half of 2020 and developing from that point forward.
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