Electrifying last-mile delivery

In 2020, vehicles with a gross weight between 3.5 and 7 tonnes recorded an 11% market share in 2020, making last-mile delivery trucks, such as parcel delivery vehicles, one of the most significant heavy-duty vehicle segments by sales volume in Europe. In the last couple of years, e-commerce has witnessed a 15% growth, showing no signs of stopping. This means last-mile delivery trucks represent a vital segment of the transport sector to electrify.
In this study the total cost of ownership (TCO) of last-mile delivery battery-electric trucks (BETs) is quantified and compared to existing diesel truck fleets. The study also provides policy recommendations to overcome the cost-gap between battery-electric trucks and diesel trucks.

The study presents the following findings:

1. With the purchase premiums currently available, it is possible for battery-electric trucks for last-mile delivery to reach TCO parity with diesel trucks in most of the European cities considered in this study.

However, without these premiums, economic viability relative to diesel trucks would not be reached until the second half of the decade.

Graph showing the years when battery-electric trucks achieve total cost of ownership parity with diesel trucks in various cities. Without subsidies (grey trucks): Paris 2027, Berlin 2028, Rome 2027, Amsterdam 2028, Warsaw 2028, London 2029. With subsidies (green trucks): Paris 2023, Berlin 2024, Rome 2023, Amsterdam 2024, Warsaw 2024, London 2025.
Source: Electrifying last-mile delivery | ICCT

2. To reduce the truck’s purchase price gap relative to its diesel counterpart, it can help to adjust the battery size to a truck’s daily mileage and route-level energy needs.

A primary driver of the higher TCO of battery-electric trucks relative to diesel trucks, is the truck retail price. This is especially due to the larger size of the batteries.

3. Powertrains driven by batteries are more energy efficient.

This results in lower energy consumption per km than diesel trucks. It makes their TCO less sensitive to charging costs variation than diesel trucks’ sensitivity to the increase in diesel fuel price. This means that the time needed for battery-electric and diesel trucks to reach TCO parity is more sensitive to changing diesel fuel prices than to electricity prices.

A graph compares total cost of ownership parity for battery-electric and diesel trucks in six cities. Icons show the parity for 2021 average and March 2022 diesel and electricity prices. Parity is achieved earliest in Amsterdam and latest in London.
Source: Electrifying last-mile delivery | ICCT


The main findings in this analysis lead to the recommendation of a set of policy measures to help reduce the TCO gap between battery-electric and diesel trucks and stimulate the early market uptake of last-mile delivery battery-electric trucks:


1. Implement a bonus-malus tax scheme to finance purchase incentives for zero-emission trucks.

This tax scheme would impose an additional tax on the registration of new diesel trucks based on their CO2 emissions, which could be used to fund the purchase incentive for battery-electric trucks. Ideally, the bonus-malus tax scheme would be budget-neutral and should be updated annually, to consider the actual TCO gap between the two types of trucks.


2. Impose emissions charges on all diesel vehicles entering low- and zero-emission zones.

The TCO gap can also be reduced by an emissions charge ranging from €2/day to €4/day for six days a week per diesel-powered heavy-duty vehicle. This would allow battery-electric trucks to reach TCO parity before 2025.


A chart showing the total cost of ownership for battery-electric and diesel last-mile delivery trucks from 2022 to 2030 in Paris, France. Battery-electric trucks' costs decrease significantly over time, while diesel trucks' costs increase due to emissions charges.
Source: Electrifying last-mile delivery | ICCT

3. Encourage smart charging infrastructure deployment at urban logistics depots.

Requirements for equipping new and renovated depots with charging points for commercial vehicle charging should be included in The European Energy Performance of Buildings Directive. The Alternative Fuel Infrastructure Regulation should include requirements to set up smart charging infrastructure at commercial depots with public access. Additionally, grid integration of the charging equipment in depots needs to be addressed in local urban planning, for example as part of the European New Urban Mobility Framework.


4. Require grid operators to set time-varying network tariffs that consider available grid capacity.

Charging costs for urban depots are driven by network costs. This is often caused by tariff design that is not representative for the actual state of the grid. To help battery-electric truck fleet operators optimize their fleet charging strategies and minimize the related costs, time-varying network tariffs should be introduced that change based on rising and
falling electricity demand on the grid.

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