Strategies to increase the profitability of electric vehicles in urban freight transport

Abstract

Electric vehicles (EVs) address the challenges global megatrends impose on freight transporting companies in urban areas. EVs decouple transport costs from depleting oil reserves and are free of tailpipe emissions. They are, technically, suitable for urban transport tasks which are often characterized by short, preplanned tours and enable battery charging-or changing-at the depot. Despite these promising potentials, electric urban freight transport is still a niche market. The literature suggests the main obstacle for mass usage is the high purchase price, since profitability is considered the most important factor by nearly all companies. A descriptive statistical analysis of urban freight initiatives deploying EVs in the European North Sea Region identifies two current trends, and clusters profitability concepts of good practice examples in Europe. The study suggests that one trend is to deploy slow and light electric vehicles such as electric cargo bikes, scooters or heavy quadricycles, often combined with micro-consolidation hubs. In the second trend, medium heavy electric trucks substitute conventional vehicles in last mile logistics. Here, concepts that fully exploit the strengths of EVs to increase their productivity reach profitable operations. These include: (i) reducing the capital investment for EVs, (ii) increasing the kilometre range to benefit from low operational costs, (iii) capitalizing on the vehicles’ sustainable image and (iv) exploiting of new business opportunities. The findings have implications for policy makers and companies, and they encourage the use of EVs in freight transport to abate freight transport-related emissions.