A pre-production version of the BrightDrop EV600 van being tested by FedEx, which plans to have an all-electric fleet by 2030.

FedEx tipped one more domino toward the move to zero emissions, announcing plans to achieve carbon neutrality by 2040 and electrify its vehicle fleet by 2030.

The company is setting aside $2 billion for an “initial investment” in three key areas: vehicle electrification, sustainable energy and carbon sequestration.

“We have a responsibility to take bold action in addressing climate challenges,” said Frederick W. Smith, chairman and CEO, FedEx Corp. “This goal builds on our longstanding commitment to sustainability throughout our operations, while at the same time investing in long-term, transformational solutions for FedEx and our entire industry.”

A date with carbon neutrality

By 2040, the entire FedEx parcel pickup and delivery fleet will comprise zero–emission electric vehicles, according to the delivery services giant. The effort starts with phased programs to replace existing vehicles. By 2025, 50% of FedEx Express global package pickup and delivery vehicle purchases will be electric, rising to 100% of all purchases by 2030, the company said.

FedEx hybrid delivery truck

The delivery giant also has been adding conventional hybrids to its US fleet.

FedEx has been using hybrid vehicles for more than a decade and rival UPS also has been moving towards reducing emissions from its delivery fleet. Approximately 1,000 of UPS delivery vehicles in the U.S. are now hybrids or battery-electric vehicles. UPS also recently unveiled plans to roll out 50 new midsize electric delivery trucks in Atlanta, Dallas and Los Angeles.

Amazon, which runs a large fleet of vehicles for package delivery, also has ordered thousands of new electric vehicles from Rivian. The United States Postal Service, which operates a massive fleet of delivery vehicles, plans to replace its existing fleet of right-hand drive Jeeps and other models with a fleet of new electric vehicles built by Oshkosh Defense.

Partnering with General Motors

GM’s newly launched subsidiary, BrightDrop, which will offer new electric first-to-last-mile products, from ePallets to a fully electric commercial delivery vehicle, is partnering with FedEx Express. The delivery company plans to test two BrightDrop vehicles.

FedEx experimented with other all-electric vans, including this Nissan NV.

Starting late this year, BrightDrop will begin delivering the first of those two products to FedEx, with a number of other cargo fleet operators also ready to place orders, according to Pam Fletcher, the Detroit automaker’s head of global innovation.

FedEx is scheduled to get the first 500 BrightDrop vans by year end, thousands more later on. During Barra’s Tuesday morning CES keynote, FedEx Express Regional President Richard Smith emphasized why the use of new technology, especially the EP1 droids, will be critical.

The pandemic has led to a rapid acceleration of e-commerce, he said, noting that forecasts call for 100 million packages to be shipped daily by 2023, three years sooner than was originally expected and “we don’t expect to see it go back” to prior rates once the pandemic ends.

Other automakers offering products

Ford Motor Co. plans to roll out a dedicated battery-electric vehicle for commercial customers. It recently introduced its all-electric Transit van, available in three different sizes. The company is basically the top dog in the segment. However, it’s not alone as Mercedes-Benz, Nissan and others are also making moves in the market.

Not only are vehicle manufacturers under pressure to clean up emissions but users, such as package delivery services, also are facing increasing restrictions on where they can drive. A growing list of cities only allow electric vehicles in their commercial centers, Carlos Tavares, Stellantis CEO observed this week.

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