Commercial EV Fleet Financing

Welcome to the Future of Electric Vehicle Financing

Electric vehicles (EVs) stand at the forefront of an eco-friendly transformation, yet access to the federal tax credits (45W) and residual value concerns pose significant barriers. Spring Free EV introduces “Residual Capital,” a groundbreaking financing solution designed to dismantle these obstacles, paving the way for the large-scale adoption of electric vehicles within your fleet or lease portfolio.

What Is EV Tax Equity Financing: Understanding Residual Capital

Residual Capital is a tax equity investment product crafted to ease the financial burden of electric vehicle acquisition. This innovative approach, developed in collaboration with leading tax equity structuring experts, effectively utilizes EV investment tax credits (ITC), making adopting electric vehicles more accessible for your business.

How Residual Capital Works

Drawing inspiration from traditional renewable energy projects and their financing structures (like solar and wind subsidies), where the renewable energy tax equity market contributes over $20 billion in total project financing, Residual Capital incorporates a similar approach for EVs.

Tax equity financing is a strategic financial mechanism that connects companies developing EV projects with investors seeking to monetize available tax credits, their tax liability, and other benefits. These investors, or tax equity investors, provide upfront capital for the development of EV fleets. In return, they receive a share of the renewable energy tax credits and other financial benefits, reducing their taxable income.

Tax Benefits For EV Fleets

Tax equity financing enables companies investing in EV projects to leverage various federal and state tax credits and incentives, reducing the overall project costs and accelerating their implementation.

1. Investment: Our fund provides the equity layer of a capital stack. In consumer terms, the equity layer is like the down payment. It protects the debt provider from residual value risk. The larger the equity layer, the greater the protection. Fleet operators often use their own corporate funds (corporate equity) to fill this layer. Residual capital can reduce or eliminate that requirement, which is often 10-20% of the cost of the vehicle. The remaining 90-80% of the cost can be provided by your fleet’s debt partner. We also have many partners who can provide capital.
   
   
2. Repayment: Lease payments are distributed to the debt provider and the tax equity provider. The clean energy project generates tax credits and benefits and these are distributed to our investors and project developers.
   
   
3. Residual Value and End of Term: At the end of the term, the residual value of the vehicle is shared between the debt provider and tax equity investor.