Why Are EVs The Future For Last-Mile Delivery?

Originally published on Parcel & Post Technology International.
By Tomek Gać and Marek Różycki

Just few years ago, zero-emission deliveries in cities did not exist at any scale. They were only possible via bicycle couriers, which, of course, were limited the capacity of the backpack. Then at the beginning 2011, things started to change. The first popular EV (electric vehicle) — the Nissan Leaf — reached dealerships and heralded the start of new era. But it wasn’t really ideal for courier deliveries.

Soon, electric versions of other popular small commercial vehicles like the Renault Kangoo Electric or Nissan eNV200 came. However, at that time, there was little wider knowledge of EVs amongst last-mile experts or even amongst fleet managers. It was only over the next few years and with the growth in new models and companies producing zero-emission vehicles — including America’s Tesla — that has led to increased awareness of the potential of EVs in the last mile.

In 2012, when the Tesla Model S went on sale and “real” users could physically convince themselves what the electric drive is capable of, few would have believed that we would be writing an article about the potential for last-mile deliveries like this one. But things are changing, and changing fast.

External factors

Increasingly, low-emission zones in cities like London and Berlin, or other state and local regulations, will gradually force fleet companies to deploy more and more electric vehicles. This is supplemented by price subsidies and even free charging in some cities.

The growing environmental awareness of urban communities will give rise to pressure from customers, both courier and postal services, but above all directly to online stores where they make purchases. This is already often seen among health food stores or other organic products. It is only natural that the customer ordering such products is more likely to do shopping in the store, which gives the possibility of zero-emission deliveries, especially if it does not cost more.

EVs are just better for noise levels and air quality in the city centers where millions of people live and work.

Internal factors

But on top of the external benefits, EVs offer other advantages. A typical EV will have far fewer parts than a traditional combustion vehicle. In the powertrain system of a typical gas or diesel car, there are over 2,000 moving parts, whereas EVs have only 20–30. That means much lower maintenance costs.

Perhaps more importantly, a typical charge cost (where free charging is not available) will be a fraction of fuel costs and can be as low as 20% of fossil fuel costs.

Finally, EVs can be more comfortable for drivers on short distances because they’re quick to start, virtually silent, and smooth to drive. Full power is accessible from 0 km/h. All these features show EVs are perfect for urban driving.

So why is the last mile not yet all electric?

There are also some obstacles, both subjective and objective.

The most important one is related to relatively higher prices of electric vehicles compared to their traditional counterparts. Typically, this will be 50%. Having said that, more and more countries are offering or even carriers are offering subsidies of as much as 30%, which can compensate for part of this difference while helping to bring down public health costs — air pollution is a leading cause of premature death.

Another issue concerns insufficient charging infrastructures — few cities have sufficient charging points to give proximate access today. But this is more of an issue for private use cases in which people have no possibility to charge at home or at work. 

Finally, and most importantly, there is very little availability of suitable electric delivery vehicles, especially at the lower priced end of the market. Today, only a few models are available to a limited extent in Europe and the USA. The StreetScooter Work, owned by DHL, has several shortcomings, such as no possibility of fast DC charging and a loud and poorly finished cabin, but the parent company is still planning to increase its number this year from 9,000 to 15,000 at a cost of about €40,000 ($45,000) each.

The French Post (La Poste) uses Renault Kangoos. However, like the Nissan eNV200, these are quite small vehicles — about 4 m³ (141 ft³) of cargo space — and not adapted to the expectations of fleet managers in a typical CEP company. Compare that with the Nissan Voltia’s 8m³ (282ft³) cargo space. DPD France (a 100% subsidiary of La Poste) is now testing over 100 of these vehicles. Similar tests of the Voltia are being run by DHL France in Paris.

But watch this space, a new wave of improved electric delivery vehicles is coming. Currently, selected large companies can already test (or buy in small quantities) slightly more expensive German last-mile EVs, the  Mercedes eVito and Volkswagen eCrafter. These vehicles have the advantage of being supported globally by major car producers, with a dense service network and long-term relations with fleet managers. Some more or less successful Chinese EVs have been available for some time, and while the price is very attractive, not all offer reliable quality or have full EU homologation.

Conclusion

Taking into account the growing social awareness and billion-dollar investments by automotive companies into battery technology, we believe that it isn’t a question of “if” but “when” EVs become the powerhouse of last-mile deliveries. Those who start learning about them now will be in prime position to take advantage of this change when it comes.

Marek Różycki is managing partner at Last Mile Experts, specializing in CEP and e-commerce last-mile advisory.

Tomasz Gać advises clients such as courier companies on implementing EV fleets, drawing upon his vast experience as a business owner and consultant in the sector. He is a PRO Partner at Last Mile Experts.

Images via Nissan & Mercedes