Electric trucks are steadily moving from pilot projects to mainstream city logistics. A new report by C40 Cities, the University of Exeter, Arup and Laneshift argues that cities can accelerate this transition by combining regulation, charging infrastructure and long-term policy certainty.
Their central message is compelling: electrification reaches a “tipping point” only when three conditions come together—affordability, accessibility and attractiveness. Achieving total cost of ownership (TCO) parity alone is not enough.
Meeting climate ambitions
The report rightly points out that heavy-duty vehicles account for less than 10% of the commercial fleet but roughly a quarter of transport-related CO₂ emissions. With freight demand expected to more than double by 2050, cities cannot meet their climate ambitions without decarbonizing urban freight.
The report demonstrates that coordinated action between national governments, regions and cities is far more effective than isolated measures. National governments should reduce purchase costs, while cities create predictable operating conditions through zero-emission zones, charging infrastructure and procurement policies.
Cities can play a decisive role in accelerating the adoption of electric trucks, but cost parity alone is not enough. Zero-emission freight only reaches a market tipping point when affordability, accessibility and attractiveness improve simultaneously.
Coordinated policies, regional charging corridors and collective procurement can shorten the path to TCO parity. Regulatory measures such as zero-emission zones, preferential access and charging infrastructure consistently outperform subsidies alone. Cities including Shenzhen, Mexico City and Rio de Janeiro demonstrate that ambitious local action can accelerate electrification, even ahead of national policy.
Another valuable insight is that regulation often has a stronger impact than subsidies. Once the market has matured, clear long-term mandates, such as zero-emission zones or fleet requirements, provide greater investment certainty than temporary grants. Cities such as Amsterdam, Rotterdam, Shenzhen and São Paulo demonstrate that access regulations can accelerate fleet renewal when operators know years in advance what the future rules will be. Predictability is often more valuable than generous but short-lived subsidy schemes.
The report also emphasizes the importance of charging corridors, municipal charging hubs, grid planning, and the integration of charging requirements into zoning and building regulations. These are all sensible recommendations. Without reliable charging infrastructure, fleet electrification simply cannot scale.
The business model of transport companies
However, the report underestimates one critical issue: the business model of transport companies. Most urban freight operators do not purchase trucks because governments discourage them from doing so. They invest when customers are willing to pay for the additional costs and risks. Many transport companies operate on razor-thin margins of two to four percent. An electric truck may offer a lower lifetime TCO under ideal assumptions, but it also requires substantial upfront investment, depot charging, grid upgrades, planning adjustments and operational changes. Those risks are carried almost entirely by transport operators, while many shippers continue to award contracts primarily on price.
The lack of a level playing field
This brings us to a second missing element: the lack of a level playing field. The report assumes that regulation automatically creates fair competition between diesel and electric fleets. Reality is more complicated. In many European markets, companies investing heavily in zero-emission vehicles still compete directly with operators using fully depreciated diesel trucks. Unless procurement practices reward lower emissions or governments internalize environmental costs consistently, first movers continue to face competitive disadvantages.
TCO and energy parity
Perhaps the largest omission concerns electricity prices. The report acknowledges that electricity prices influence TCO and even identifies Milan as an example where high electricity costs significantly delay TCO parity. Yet this factor deserves much greater attention. Electricity is not a minor operating expense—it is becoming one of the dominant variables in the economics of electric freight.
Transport companies increasingly face:
- volatile wholesale electricity prices;
- high network tariffs;
- demand charges for peak consumption;
- congestion-related restrictions on grid connections;
- differences between public and depot charging costs.
A difference of only a few eurocents per kilowatt-hour can determine whether an electric truck generates a profit or incurs a loss over its lifetime. Stable and affordable electricity pricing may therefore be just as important as vehicle subsidies.
The report briefly discusses preferential electricity tariffs in cities such as Delhi and Maharashtra and highlights smart charging and time-variable network tariffs in Amsterdam and Germany. These examples deserve far more prominence because predictable energy costs directly influence financing decisions. Banks, leasing companies and fleet operators all require confidence that energy prices remain competitive throughout the truck’s economic life.
The role of shippers
There is another issue that deserves greater emphasis: the customer. The report focuses primarily on governments and fleet operators, while the shipper (the party creating transport demand) is largely absent. Yet the transition will only accelerate when retailers, manufacturers, construction companies and public authorities are willing to include zero-emission transport in procurement criteria and accept the associated costs. Without demand-side commitment, transport companies remain responsible for financing a transition that benefits society as a whole.
The report nevertheless makes an important contribution. It convincingly demonstrates that cities have far greater influence over freight decarbonization than many policymakers assume. Long-term regulation, coordinated governance, charging infrastructure and public procurement can all accelerate market adoption.
A viable commercial business model.
But reaching a genuine tipping point requires one additional ingredient that receives too little attention: a viable commercial business model. Electric trucks will not become mainstream simply because cities introduce zero-emission zones. They will become mainstream when transport companies can earn a sustainable return on their investment, compete on equal terms with diesel operators and purchase electricity at predictable and competitive prices.
In the end, the transition will be decided not only by policy, but by the economics of every kilometer driven.
Walther Ploos van Amstel.