A £1 billion investment to transform UK business transport has been welcomed by motor manufacturers and company leaders.

The UK government has announced the scheme to speed the roll out of electric vans and trucks.

The Zero Emissions Truck and Van Grants and the Depot Charging Scheme (DCS) aim to tackle two of the biggest barriers to businesses making the switch – upfront costs and access to charging.

The government added global fuel price uncertainty is challenging for businesses, and these grants will support industry to switch to electric, helping to reduce exposure to fuel price uncertainty.

The truck grant will offer savings of up to £81,000 off the heaviest zero emissions trucks, covering up to 40% of the cost. The van grant will continue to offer discounts of up to £5,000 off the cost of electric vans.

On top of that, businesses and public authorities could save up to £1 million, covering up to 70% of the cost, when installing charging infrastructure for vans, coaches, and eHGVs, thanks to a £170 million boost to the government’s Depot Charging Scheme.

The aviation, maritime and decarbonisation minister Keir Mather, said the aim was to drive growth and move towards the UK’s net zero ambitions.

“This £1 billion investment cuts cost for British businesses, supports jobs, cleans up our roads, and gives operators protection against shifting global fuel prices,” he added. “The logistics sector is the backbone of the UK economy, worth £170 billion and supporting 2.7 million jobs. We are helping them expand and decarbonise their fleets whilst saving them cash, driving growth up and down the country.”

The new funding comes after the government announced an £18 million uplift in January to slash up to £120,000 off the cost of green lorries, making it cheaper for businesses to go electric.

Businesses backed the move.

Lee Holmes, transport and logistics director at Wren Kitchens and Bedrooms, said: “Government investment gives businesses like Wren the confidence to accelerate fleet decarbonisation while maintaining operational stability, even in periods of economic uncertainty.

“With this support, we’ve brought a number of 44-tonne e-trucks into our fleet alongside a rapid charging infrastructure, reducing our reliance on traditional fuels and strengthening resilience and reliability against ongoing market volatility.”

Julian Bailey, Head of Group Transport at M&S, added: “In 2021, we set ourselves the ambitious target of becoming a net zero business across our value chain by 2040. Since then, we have made some great progress, which includes the onboarding of 24 battery electric vehicles across our transport fleet.

“We welcome this investment which serves as a reminder of the importance of the logistics sector in the UK and its role in decarbonisation.”

Motor manufacturers also backed the funding.

Mike Hawes, SMMT chief executive explained: “Confirmed longer term funding for zero emission vans and trucks, along with support for depot charging, is hugely welcome. Transitioning this sector depends on operator confidence to invest and government support is the clearest sign that ZEVs are the right choice.

“To accelerate the transition, however, such that ambitious mandated van sales targets are met and the ZEV truck market moves beyond its infancy, these measures must be complemented by enablers such as grid connection prioritisation, dedicated commercial vehicle charging infrastructure and regulation that reflects the diversity of operators’ uses and requirements.”