Electrifying last-mile delivery: A total cost of ownership comparison of battery-electric and diesel trucks in Europe

Parcel delivery vehicles make up one of the most significant heavy-duty vehicle segments by volume in Europe, recording a market share of 11% in 2020. Their predictable schedules and relatively short routes make last-mile delivery vehicles a prime candidate for electrification. This study by the by the International Council on Clean Transportation and the Regulatory Assistance Project quantifies the total cost of ownership (TCO) of last-mile delivery battery-electric trucks (BETs) and compares it to existing diesel truck fleets in six major European cities. In addition, the study also provides policy recommendations to overcome the differential cost between battery-electric trucks and their diesel counterparts.

The study finds that battery-electric trucks for last-mile delivery can reach TCO parity with their diesel counterparts today in most of the European cities considered in this study with the purchase premiums currently available. Without these premiums, they would not reach economic viability relative to diesel trucks until the second half of the decade. The analysis also finds that adjusting the battery size to a truck’s daily mileage and route-level energy needs can help to reduce the truck’s purchase price gap relative to its diesel counterpart.

In addition, battery-electric powertrains are found to be less sensitive to changes in energy prices than diesel because they have lower energy consumption per km than diesel trucks. This makes their TCO less sensitive to charging costs variation than diesel trucks’ sensitivity to the increase in diesel fuel

Based on the main findings in this analysis, various policy measures could help overcome the TCO gap between battery-electric and diesel trucks and stimulate the early market uptake of last-mile delivery battery-electric trucks. These include implementing a national bonus-malus tax scheme to finance purchase incentives for zero-emission trucks, imposing emissions charges on diesel trucks entering low- and zero-emission zones, deploying smart charging infrastructure at urban logistics depots, and requiring the implementation of time-varying electricity and network tariffs.

Fact sheet: Electrifying last-mile delivery

Fiscal policies