Laying out the roadmap for the future of last mile urban transport

The rise of e-mobility

The rise of e-mobility has been a hot topic for the better part of the last decade. The idea of the world’s vehicle fleet moving from internal combustion engine to battery electric has long been seen as a holy grail of sorts to environmentalist, scientists and economists around the world. In this regard, the writing is already on the wall – as battery prices continue to fall, and more governments take action to prioritize decarbonization, ICEs will give way to cleaner, more efficient battery powered vehicles.

As crazy as it may sound; however, the shift to electric propulsion may in fact be one of the least perceptible changes in the way we move goods and people throughout our cities. The opportunity to eliminate the massive carbon footprint associated with vehicle emissions would of course have a transformative impact on our society, but there is more and more evidence that this shift will occur concurrently with a number of developments that will fundamentally redefine how we move goods in our cities.

Dr. Jennifer Dungs

Dr. Jennifer Dungs invests in mobility innovations across Europe, leading the thematic field of Energy for Transport & Mobility at EIT InnoEnergy.

Changing customer demand has accelerated

One particular sector that is set to undergo massive change, driven by changing customer demands, a rethinking of our urban spaces, and the need to find new innovations in an already tight margin business, is last mile logistics.

At present, when looking at the costs associated with shipping goods, 50+% can be attributed to so called last-mile delivery. This presents a massive opportunity for companies in the space to develop new solutions and business models to not only improve efficiency, but deliver a better overall service. In fact, last mile logistics is ripe for customer-centric development, and right now we are in a time when the opportunity has perhaps never been greater to implement it.

The Covid-19 pandemic has accelerated behavioural change in a number of ways, one of which being a massive increase in the reliance on e-commerce. In December of last year, it was predicted we would see a 5-12% increase in online shopping for groceries and household goods – due to the Covid-19 crisis, we have instead seen a 56% increase in consumer goods, and a 70% increase in food purchased online. While these figures are not expected to be sustainable, it is estimated we may see rates normalize around 20% yearly growth in the near term before flattening out. This still represents an enormous increase, and an opportunity to innovate in the growing field.

One of the most immediately apparent changes brought on by Covid-19, in Europe in particular, has been the reimagining of our urban spaces.

As social distancing became the norm, and the effects of air pollution as a co-morbidity of Covid-19 emerged, many cities made changes to better accommodate its citizens, placing a renewed emphasis on biking and pedestrian infrastructure. In fact, 68 cities throughout Europe have already announced plans to physically transform their city centers, be it through expanding or increasing the number of bike lanes or limiting car traffic, and new announcements are coming weekly.



Ensuring profitability in an increasingly unpredictable market

A heightened uncertainty surrounding demand has placed the very idea of vehicle ownership in question, pushing many to consider the idea of “flexible ownership” (e.g. vehicle-as-a-service) or pay-per use models. This will allow companies to avoid lengthy commitments and ensure profitability in an increasingly unpredictable market. This model has already been adopted by major automakers such as Porsche and Mercedes-Benz, but has the potential to be truly transformative in the last mile delivery sector, allowing companies to increase or decrease their fleet in response to demand.

Although Covid-19 has increased demand in the sector, it has also decreased predictability, making vehicles as a service an important aspect of maintaining profitability in any situation.

When we look at the stark increase in e-commerce, paired with a high relative cost of last-mile logistics, it is immediately apparent that there exists a tremendous opportunity to innovate in the space.

Luckily, there are a number of companies who are already hard at work developing solutions to better serve our changing cityscapes. One of the most promising developments comes in the form of purpose-built, sustainable delivery vehicles; taking on drastically different form factors, while also enabling different business models than we are used to seeing.

Purpose built “last mile” vehicles

One company at the forefront of this shift is the EIT InnoEnergy backed ONO Motion, a Berlin based start-up whose pedal-assisted transporter is already being piloted and will soon launch into the European market. ONO’s fully modular solution aims to better navigate Europe’s changing cityscapes, while delivering greater efficiency and a better experience for customers. The vehicles have an ample 2.1 cubic meters of cargo space in a form factor that allows them to take advantage of the ever expanding network of cycle paths. Also worth noting, the compact design eliminates the costly and time consuming task of searching and paying for parking.



One of the most exciting aspects of ONO’s foray into the pedal-assisted transporter segment is its fully modular construction. In less than a minute, individual module units can be easily exchanged, allowing for the vehicle to adapt to best serve its task. Also equipped with swappable batteries and a 60 km range, ONO’s Pioneers edition pedal-assisted transporter, set to launch in Europe, is much more than just a fringe green alternative to delivery vans. Vehicles like these are designed to outperform and provide a significant CAPEX and OPEX savings compared to the incumbent ICE delivery vehicles they will quickly replace.

One of the most important metrics to measure success in last-mile logistics is drops per hour – a figure that can be greatly affected by worsening traffic and a lack of ample parking. Early studies on purpose-built vehicles such as e-cargo bikes have shown the possibility for efficiency increases of up to 30% in certain cases. This is largely due to their ability to utilize bike lanes, park on sidewalks, and circumvent traffic. All this is achieved while also having a considerably smaller carbon footprint than the traditional ICE delivery vehicles.

The unprecedented upheaval we have seen take place in the world economy due to Covid-19 has had devastating effects for both companies and individuals alike. It has also helped shine a light on inefficiencies and oversights that have existed for decades. The last mile logistics sector is finding itself more vital than ever before, becoming a central part of life in our cities. It is crucial for us to support the ambitious companies who are working hard to ensure the sector can best adapt to the new realities of our society. The increase in e-commerce will make it absolutely vital for last mile logistics to considerably cut emissions, while getting goods to customers quicker and more reliably – it is becoming more and more apparent that purpose-built vehicles offer us a way to achieve both of those tasks, while also protecting us from an increasingly unpredictable future.


An International Roundtable

EIT InnoEnergy and Greentown Labs

September 29th, 2020 – 9.30-12.30 EDT Register here

Join InnoEnergy and Greentown Labs on September 29th for an interactive virtual program of leading stakeholders to share trends and solutions in the fast-growing space of urban mobility – moving people and goods more cleanly and efficiently.

You will hear from European and US experts on market trends, including InnoEnergy’s co-founder, Elena Bou, Director of Innovation, based in Spain; and Thematic Field Leader, Dr. Jennifer Dungs, based in Germany; market makers such as global multinationals addressing last mile delivery logistics; and investors and startups from the US as well as some InnoEnergy-backed ventures such as ONO Motion, Kumpan, Scoobic, and Duckt.

Who Should Attend?

– Investors committed to mobility ventures and/ or opportunities to co-invest in Europe
– Corporate and Municipal customers looking for solutions to last mile urban logistics
– Startups in the US and Europe interested in meeting investors and/ or expanding to Europe
– Mobility and micro-mobility enthusiasts interested in the latest trends

About EIT InnoEnergy

EIT InnoEnergy is the largest sustainable energy accelerator and innovation ecosystem in Europe and recently opened its first US office in the Boston area to accelerate the bi-directional deployment of innovation and capital. InnoEnergy is a Terawatt Partner of Greentown Labs.

Interested in joining the event and learning more? Register here.