Inspirations from the Global Leader: Getting to 100% Electric Delivery Vehicles

A new report series from Rocky Mountain Institute brings deep insights from the city with the highest rate of vehicle electrification in the world—Shenzhen, China—for full electrification of urban delivery and logistics vehicles.

Beijing China, October 29, 2020

Today Rocky Mountain Institute (RMI) launched a six-volume report series which explores the experience of the City of Shenzhen, China in addressing carbon emissions and air pollution through the electrification of its urban freight sector. Shenzhen is leading the world in electric vehicle adoption and the details of how it is moving towards 100% electrification hold lessons for cities around the world.

The topic of urban freight is more important today than ever before. Globally, light and medium freight vehicles account for nearly half of overall road freight CO2 emissions, and in 2015 an estimated 181,000 people around the world died due to the emissions from diesel vehicles.

The consequences of not addressing the potential health impacts of air pollution is growing even more severe, with new research showing that air pollution may increase our susceptibility to COVID-19 and associated outcomes. As a result, states, cities, and business and industry leaders around the world are looking for solutions on how to address the emissions and air pollution associated with buying and delivering goods to our homes and businesses.

Utilization of a vehicle is one of the biggest determining factors to wider adoption of electric vehicles over comparable internal combust engine vehicles in fleet and logistics applications. Therefore this report series—Putting Electric Logistics Vehicles to Work in Shenzhen—focuses on understanding the policies, charging infrastructure deployment, technology, and market development advances critical to achieving full utilization of electric logistics vehicles (ELVs). As the global leader in both EV and ELV adoption, Shenzhen served as the ideal geography for this deep-dive analysis.

The Putting Electric Logistics Vehicles to Work in Shenzhen series consists of the following reports:

• Summary Volume: Charting a Path to Fully Electrifying Goods and Logistics Delivery
• Background Volume: Setting the Stage for Full Utilization of ELVs in Shenzhen
• Policy Volume: Utilization Subsidies as a Lever to Accelerate the EV Market
• Infrastructure Volume: Enabling EV Utilization through Well-Planned Charger Deployment
• Vehicle Quality Volume: Identifying Pain Points in ELV performance That Reduce Utilization
• Business Model Volume: Improving Utilization of ELVs through Innovations in Business and Ownership Models

Each report contains specific insights based on the experience and lessons drawn from Shenzhen. And while every city and nation has specific circumstances, the analysis, in particular in the Summary Volume, has significant relevance to global leaders. This includes state and city governments, logistics delivery and retail goods industries, and the financial sector. The key insights from our work for these audiences include:

• Full logistics electrification is possible. Shenzhen’s experience shows that a rapid transition to the use of EVs in urban logistics is feasible and, with the proper policy framework, vehicle operators will rapidly electrify.
• Policy must evolve as logistics electrification progresses. As the low-hanging fruit of logistics electrification is picked, policy makers must be prepared to pivot towards harder use cases. Doing so will change how cities approach vehicle incentivization and infrastructure deployment. Being able to dynamically adjust policy to the needs of distinct market segments as they electrify is critical to success.
• Growing an ELV fleet is a necessary but insufficient condition for logistics electrification. Policy makers often set EV targets in terms of share of sales or share of fleet. Getting EVs into the hands of operators is the first step in full logistics electrification but not the only step. Cities must also ensure that ELVs are able to displace the use of fossil fuel vehicles.
• Encourage innovation and entrepreneurialism in the supporting ecosystem. ELVs present the market with new challenges and opportunities and enabling the market to meet those challenges is key to the success of logistics electrification. Cities can support innovation in multiple ways, including engaging with industry to support innovative pilots that support proof-of-concept for new approaches to logistics electrification.

“Electric trucks and vans can reduce air pollution and noise in low income neighborhoods, reduce carbon emissions from the city and, soon, reduce cost to the vehicle operator,” notes Dave Mullaney, lead author and principal at RMI. “As a result, cities globally are aggressively moving on the opportunity. However, uncertainty abounds in how cities can support the effective use of electric logistics vehicles. We hope that this series of reports, and the experience of Shenzhen with electric logistics vehicle deployment, can smooth the way for cities globally to achieve a smooth and fast transition to logistics electrification.”

If Shenzhen continues to vigorously promote the electrification of logistics vehicles and achieves 100% electrification by 2030, and a fully decarbonized grid by 2050, it can contribute as much as 6 million tons of CO2 emission reduction to the transportation sector. If scaled to cities across China, 100% logistics electrification can significantly contribute to the 12 billion tons of transportation sector CO2 emission reductions required to meet China’s carbon neutrality goal.

“Full electrification of the transportation sector is critical for China to achieve its carbon neutrality goal by 2060,” said Li Ting, managing director and chief representative of RMI China. “Shenzhen’s exceptional achievements on electrifying urban delivery vehicles will play a leading role to achieving 100% electrification of urban logistics and the broader transportation sector in China. Moreover, a deeper understanding of Shenzhen’s experience in EV and ELV deployment can also be a guidepost for other cities across the world aiming for a cleaner, carbon-neutral future.”

To read the full report, visit Putting Electric Logistics Vehicles to Work in Shenzhen.

Media Inquiries please contact:
Alexandra Chin, Rocky Mountain Institute
Telephone: +1 973-262-0002
E-Mail: achin@rmi.org

Notes to Editors

About Rocky Mountain Institute
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; the San Francisco Bay Area; Washington, D.C.; and in Beijing, People’s Republic of China. 

More information on RMI can be found at rmi.org or follow us on Twitter @RockyMtnInst.