By 2020 UPS plans that one in every four new last mile delivery vehicles purchased will be an alternative fuel or advanced technology vehicle. Additionally, UPS announced that 25 percent of the electricity it consumes will come from renewable energy sources by 2025. While UPS has been a leader in transitioning its ground fleet to alternative fuel vehicles, this step is an aggressive increase to its sustainability targets.
While UPS does include other alternative fuel technologies in its 2020 target, it is reasonable that given the details of the most recent announcements to assume the vast majority (if not all) of these vehicles will be electric. Simply based on the increasing total cost of ownership advantage of electric vehicles, it would not be surprising if UPS beats this target with electric vehicles alone. Additionally, UPS has recently pointed to a more electric focus, purchasing 50 full electric Workhorse delivery vans, and has placed a pre-order for 125 Tesla Semis, the largest pre-order to date.
Independently, UPS’ alternative fuel vehicle target and renewable energy targets are notable. However, it is worth thinking about the combined implications of these goals. Transitioning 25% of UPS’ 35,000 last mile delivery vehicles will have a significant impact on UPS’ total energy consumption. This new fleet of electric vehicles could consume 640,000 MWhs of additional electricity. 25% of this power will need to come from renewable sources to meet UPS’ coinciding renewable energy target. The most obvious source of renewable power for this use case is on or near site solar installations. Meeting the UPS 25% goal with solar would require over a 100 MW of solar generation projects to be installed – not bad If UPS were to meet 100% of their increased electricity need with solar, it would require $720m, or 400 MW, of upfront investment in solar development. For reference, UPS invested $18m in 2017 to install 10 MW of rooftop solar.
UPS exemplifies why it is important for organizations transitioning their fleets to electric vehicles to think comprehensively about their transition. Large EV fleets have significant power requirements; leveraging onsite renewable generation to meet this requirement can both materially lower operating costs and help organizations achieve their renewable energy goals.
Given the upfront investment required to achieve these savings is significant, companies and municipalities with large fleets must take the proper steps in planning their transition to use of electric vehicles.