Delivery giants Amazon.com, DHL and others are urging utilities, regulators and policy-makers to make the private sector’s transition to electric-vehicle fleets faster, easier and more affordable.
A report issued Tuesday from their Corporate Electric Vehicle Alliance argues that EV technologies are producing lower costs, greater range and faster charging, but inconsistencies remain that are slowing the conversion promoted by Amazon and other companies, many with significant renewable-energy pledges in recent months.
Among them, Amazon has said it is working toward using 100% renewable energy by 2030, including through an order of 100,000 electric delivery vans from a Midwest company, Rivian, which the online retailer took a $440 million stake in.
“Amazon’s order of 100,000 new electric delivery vehicles from Rivian, the largest order ever of electric delivery vehicles, will have a significant impact in reducing our carbon footprint and help us on our path to net-zero [emissions] by 2040,” said Ross Rachey, director, Global Fleet & Products, Amazon Logistics, in a release as part of the EV report.
The transportation sector is currently the largest and fastest growing greenhouse-gas-emitting sector in the U.S. economy by some measures. Transportation decarbonization is critical to addressing climate change in the U.S. and globally, the report says. Recent data from consultancy Rhodium shows that transportation shares the biggest-emitter designation with broader industry.
EVs, although not without their own limitations, are often seen as key to reducing greenhouse gas emissions. Backers note their cost savings on fuel and maintenance, freedom from reliance on volatile oil and gas prices CL00, +19.96% , improved passenger safety, enhanced company reputation and improved workforce recruitment and retention.
The cost of EV batteries has also decreased by as much as 80% in the last eight years, and further declines of up to 50% are expected in the next decade, putting upfront costs of many EVs below those of internal combustion engine vehicles by 2030.
Still, costs remain volatile and difficult to plan around from the electrical grid itself. The report urged greater flexibility from the electric utilities helping power EV fleets. The electricity demands from the fleets present an opportunity to shift load to off-peak times through smart technologies and managed charging, the report said. These approaches can increase grid efficiency and put downward pressure on electricity rates, and can be used to increase integration of renewable energy and energy storage on the grid.
Accordingly, many utilities have started to reexamine rate designs for fleets. As these new rates are determined, it is unlikely there will be one design that works best for all fleet operators, the report said. Utilities should strive to provide a range of rate options, potentially considering the fleet as a new rate class, the report said.
The Corporate Electric Vehicle Alliance, which was formed earlier this year with sustainable investing-advocate Ceres, based their report findings on a survey of firms with large transportation and logistics fleets. The report was commissioned by Ceres and trade group California Trucking Association, and funded by Amazon AMZN, +0.60% .
Trucking representation in California backed the report as the state has historically topped efforts away from fossil-fuel reliance elsewhere in the nation, and at the federal level. The Trump administration late last year revoked the state’s right to set its own emissions standards for automobiles.
“As operators of commercial medium and heavy-duty vehicles, California truck drivers have a unique set of needs that must be addressed to ensure any transition to EVs is as efficient, safe and cost-effective as possible,” said Shawn Yadon, chief executive officer for the California Trucking Association. “We are confident this report will communicate the perspective of our members and the trucking industry to the electric power sector so that we can work together to accelerate the use of commercial EVs.”
The report hits as the strain on deliveries tied to home quarantine during the COVID-19 pandemic shines a light on Amazon and others. Amazon topped $75 billion in sales in the first quarter as COVID-19 swept across the globe, but profit declined and the company said that it might lose money in the current period as it spends to keep up with demand and help its facilities test and clean for the coronavirus. A company blog says it has hired 175,000 people to keep up with quarantine delivery demand and is trying to focus on high-priority items including household staples and medical supplies.
“It’s encouraging to see that, even in light of the current challenges presented by the COVID-19 pandemic, companies continue to plan for fleet electrification. Given the opportunity electric vehicles provide companies to both lower greenhouse gas emissions and reduce operating costs, it’s no surprise that many are eager to electrify their fleets — and fast,” said Sara Forni, senior manager of Clean Vehicles, and head of the Corporate Electric Vehicle Alliance at Ceres.
Amazon’s environmental track-record has historically drawn some criticism and accolades — particularly as it took over a greater share of delivered retail purchases in the nation and increasingly delivered goods on a faster timeline, even splitting orders for quicker delivery but more road time.
Tim Bray, a vice president at the company, said this week he quit his job at the online-retail giant to protest the firing of employees who spoke up about the conditions inside the company’s warehouses and its record on climate change.