Each year, hundreds of billions of packages are delivered across the globe. And in the entire journey of these parcels, it’s the very last leg – to a customer’s doorstep – that is the costliest and most time consuming. It’s what’s known as “the last mile challenge.”
Electric Vehicles (EVs) are emerging as a key component of how the last mile challenge is being solved. With lower fuel, labor and environmental costs, EVs offer a promising last mile solution.
What is the last mile challenge?
The last mile challenge (also called the last mile problem) refers to the inefficiencies, costs, and other difficulties connected with delivering a package from a warehouse to a customer’s residence or business. This final step in the delivery process is the most expensive and time-consuming part of the supply chain and can account for up to 53% of total shipping costs.
Crowded urban streets, failed delivery attempts, and consumers’ expectations for fast shipping make the problem especially hard to solve. But e-commerce continues to grow, with projections showing that 498 billion packages will be shipped in 2028.
This increasing volume is putting pressure on logistics companies to invest in last mile EV solutions that are both cost-effective and sustainable.
How are EVs helping tackle the issue?
Electric vehicles have the potential to be a game-changing solution to the last mile challenge. EVs offer lower emissions, reduce operating costs, and are quieter than traditional vehicles, and these factors make EVs an attractive alternative to fuel-powered delivery trucks.
Companies are also increasingly investing in EV charging infrastructure and smart logistics as part of their last mile solutions. Charging EVs efficiently is a critical piece of the puzzle but also comes with a number of remaining challenges.
The use of autonomous delivery vehicles
Autonomous electric delivery vehicles are shaking up last-mile logistics by reducing labor costs and improving delivery speed. Companies like Nuro and Starship Technologies have developed self-driving robots and electric vans that navigate urban environments with minimal human intervention.
In late 2024, Nuro expanded its autonomous delivery vehicle operations in the U.S. states of Texas and California. Nuro’s fully driverless vehicles are only for goods and packages – they don’t have seats, windows, steering wheels or pedals – but do have temperature-controlled storage units to transport food.
Starship Technologies brought one of its autonomous delivery robots to the UK Parliament in January 2025 as part of the company’s campaign for favorable UK regulation of autonomous vehicles. Starship CEO Ahti Heinla told Parliament: “We have thousands of robots delivering to neighborhoods in multiple countries. We’re using AI to solve the last-mile problem which is carbon-intensive and it’s expensive.”
These autonomous delivery vehicles use AI-powered navigation systems and real-time last mile tracking to ensure accurate and efficient deliveries. As countries and cities become more accepting of autonomous technologies, self-driving EVs can be expected to play an even bigger role in last mile solutions.
EV fleets to improve sustainability and consistency
Major logistics players including Amazon, FedEx, and UPS have added electric delivery vans to their fleets in order to reduce their carbon footprint and comply with stricter environmental regulations.
The use of EVs in last-mile logistics cuts down on greenhouse gas emissions and also lowers maintenance costs because EVs have 90% fewer moving parts than Internal Combustion Engine (ICE) vehicles. Additionally, companies can incorporate advanced last mile tracking technology to optimize route planning and minimize delivery times.
EV charging limitations for a last mile solution
Using EVs for last mile solutions does still face several challenges, particularly in last mile EV charging infrastructure. Many cities lack sufficient numbers of public charging stations, and installing private charging solutions can be costly for logistics companies.
Charging times also create a logistical hurdle. Unlike refueling a gasoline vehicle, which takes minutes, recharging an EV can take hours depending on the battery and charger type. But companies are working on solutions such as battery swapping and ultra-fast chargers to tackle these limitations and make EVs more practical for last-mile delivery.
Real-world examples of EVs in last-mile logistics
Many major companies have successfully integrated electric vehicles into their last-mile delivery strategies, including:
Amazon: The e-commerce giant began using Rivian electric delivery vans in 2022 and now has more than 20,000 across the U.S. and hundreds in Europe. Amazon says it aims to have 100,000 electric delivery vehicles on the road by 2030 and has also ordered more than 200 electric heavy goods vehicles (eHGVs) from Mercedes-Benz.
UPS: In 2024, UPS rolled out more than 100 new EVs in Paris, France and currently has over 600 electric vehicles making deliveries to customers in Europe.
DHL: Currently, just under 38% of DHL’s pick-up and delivery vehicles are electric with the goal of increasing this share to 60% by 2030.
FedEx: The company is working toward an all-electric pickup and delivery fleet, with the aim of carbon neutral operations by 2040. To accomplish this, FedEx is incorporating electric vehicles, e-cargo bikes, autonomous vehicles, and electric pallets.
By investing in EV last mile solutions, these companies are proving that last mile logistics can be sustainable and contribute to greener cities. Electric vehicles are an important part of how the last mile challenge is being solved, and while challenges remain, the future of last-mile logistics looks to be electric.
Interested in learning about other solutions being developed for the last mile challenge? Check out this article: The Last Mile Problem: Challenges and Innovative Solutions
