Roberto Cortes, Chief Executive of Volkswagen’s bus and trucks operation in Brazil, told Reuters that negotiations with Ambev had long preceded the new policy.

This month, the government of Brazil signed into law a minimum fare for freight to be paid to diesel truckers, which is now higher than the current market rate. Electric vehicles are exempt from the price minimums.

Ambev expects the 1,600 trucks will be delivered by 2023 bringing Ambev’s fleet to35 percent electric. According to the company companies it will save about 30,000 tons of carbon emissions per year.