The adoption of electric vehicles has been rampant, and CBRE Investment Management expects the same trend for electric trucking (e-trucking) in advanced economies over the next ten years. The asset manager opines that trucking is a critical part of the logistics and transportation industry and a vital element of the global supply chain. According to CBRE, “It takes roughly an 8% increase in fixed facility costs to equal the impact of just a 1% increase in transportation costs.”

The asset manager understands that transitioning to e-trucking over the next decade will require a public-private partnership strategy. By country, China has the largest number of electric vehicles. However, CBRE points out that the US has most policies for e-trucking incentives at the state and local levels. In August 2022, the Inflation Reduction Act’s (IRA) incentives for heavy-duty trucks were introduced. Meanwhile, the State of California has also introduced a funding package for charging infrastructure.

CBRE then talks about China, where the focus is on financial incentives, unlike other countries that introduce emission-free zones and bans. At the same time, the asset manager informs that some Chinese local governments have begun to ban the sale of fossil fuel vehicles by 2030. In 2014, China introduced the New Energy Vehicle (NEV) purchase tax exemption policy. It is anticipated that the new energy policy will also include the electrification of commercial electric vehicles.

In Japan, the push for electrification is lower as compared to other developed countries, indicates CBRE. Still, the Tokyo Metropolitan Government is encouraging the replacement of service vehicles, buses, and cargo vehicles with EVs. The asset manager highlights that Yamato Transport, DHL Express, and Bollore Logistics Japan have begun to introduce green vehicles to their delivery fleet.

CBRE further talks about Australia, where the government provides subsidies and tax incentives for purchasing and running EVs. Australia’s first National Electric Vehicle strategy, released in April 2023, contains the details of the government’s long-awaited policies to boost the adoption of EVs.

The asset manager further states that logistics facilities with sustainable elements will be able to outperform, and older real estate stock will become obsolete. CBRE concludes by saying, “These assets will also be significant contributors to the sustainability of supply chains.”

View the complete report here.