Major international retailer Walmart announced in late September that it aims to replace all of the fossil-fuel vehicles in its logistics fleet with ones that use zero-emission powertrain technologies by 2040. This plan will create additional demand for tens of thousands of electric trucks and tractors over the next two decades if it is carried out in full.
Facing the growing crisis of climate change, Walmart recently laid out a path to zero emission for all parts of its operations, including logistics. The goal is to have the company align with the emission targets of the Paris Agreement 10 years ahead of the implementation schedule established under the same accord. The Paris Agreement wants to attain a “carbon-neutral world” by 2050, whereas Walmart wants to attain zero emission for its facilities, vehicles, and equipment by 2040.
As one of the world’s largest and most profitable companies, Walmart currently has around 11,200 store locations worldwide, an e-commerce platform, and a 24-hour delivery service. Its logistics fleet travels a total of around 1.1 billion kilometers annually. The reduction in air pollution and greenhouse gases would be enormous if all vehicles in this fleet are electrified.
Responding to the calls for more sustainable practices, Walmart has been steadily reducing its carbon footprints in the recent years. The company continues to improve the fuel efficiency of its conventional trucks. It also ordered 40 units of the Tesla Semi between 2017 and 2018. The Tesla Semi is an electric long-haul truck that is currently under development.
▲ The steps that Walmart has taken to achieve carbon neutrality by 2040 raise the question of whether meeting this ambitious goal will be beneficial or detrimental to the company’s revenue performance.
The effects of Walmart’s decision to adopt zero-emission trucks extend beyond just the creation of additional demand in the EV market. Walmart is a partner of Electrify America, which is one of the largest EV charging network in the US. As of now, Electrify America has already installed more than 120 ultra-fast charging stations at Walmart’s store locations. Deeper collaboration between this global retailer and EV infrastructure developers could set the foundation for the electrification of logistics services in the US.
Besides transitioning to EVs, Walmart is gradually eliminating carbon emissions in other parts of its operations. According to its zero-emission strategy, Walmart will be sourcing electricity exclusively from renewable generation for powering its stores, warehouses, and other facilities by 2035. Meeting this objective will require the company to ramp up the installation of solar panels and green energy equipment at its service points worldwide. At the same time, the company will have to purchase a significant amount of electricity from renewable energy projects such as wind farms. After all, there are more than 10,000 Walmart stores across the globe.
Since its establishment, Walmart has been criticized for incidences of non-compliance with environmental regulations and labor laws. However, its recent pronouncements and actions indicate that it is trying to align with the global shift toward carbon neutrality. The company is therefore worthy of some recognition for promoting the adoption of renewable energies and EVs.
(Image credits: Walmart.)