Charged for change

The explosion of last-mile delivery is quietly transforming the light commercial vehicle (LCV) market. As e-commerce volumes surge and cities clamp down on emissions, fleet operators are re-evaluating what powers their LCVs – placing electric drivetrains firmly in the spotlight.

Mordor Intelligence, an online market research provider with a global reach, estimates that the LCV market size will grow from US$525.71 billion this year to US$707.17 billion by 2031. That’s a compound annual growth rate of 6.11% during the forecast period (2026-2031), the research provider points out in its piece “Light Commercial Vehicles Market Size & Share Analysis – Growth Trends and Forecast (2026 – 2031)”.

Regulatory push reshapes the market

“Starting mid-2025, Euro 7 mandates a significant reduction in real-world NOx emissions, requiring levels much lower than the previous Euro 6d-TEMP standards,” Mordor reports. “This change is expected to substantially increase diesel after-treatment costs, thereby reducing the price difference between diesel vehicles and battery-electric vans.”

It adds that China’s dual-credit system encourages manufacturers by offering additional credits for each zero-emission LCV sold, “driving an increase in new-energy vehicle production”.

Meanwhile, regulatory pressure is building across multiple jurisdictions. “The EPA’s Phase 3 greenhouse-gas rule, applicable to future model years, sets ambitious CO₂ reduction targets for light trucks, indirectly promoting a notable share of electric vehicles,“ says the research firm.

E-commerce fuels demand

The explosion in last-mile delivery is creating extraordinary demand for commercial vehicles. “In 2024, e-commerce transactions in the US reached a significant milestone, accounting for a substantial portion of total retail sales,” the report says. “Notably, even a small increase in this penetration translates to a considerable demand for additional vans or pickups.

“Fleet operators are now prioritising features such as low cargo floors for easier loading, side doors for convenient curb-side access and sufficient real-world range to support their duty cycles,” Mordor continues. “By mid-2024, Amazon had deployed a large number of electric delivery vans from Rivian, realising notable reductions in operating costs per mile compared to retrofitted diesel counterparts, due to diminished brake and transmission wear.”

Closer to home: SA’s electric opportunity

These global trends are beginning to resonate in South Africa, where 2026 represents a pivotal year for fleet electrification.

“2026 is the year when the economics of fleet electrification become more compelling than ever for a broader range of operators,” says Paul Plummer, Everlectric’s chief commercial officer. “The convergence of new vehicle classes, clearer operating economics and instability in fuel prices, including South Africa’s Electric Vehicles White Paper, creates a practical environment for last-mile and urban logistics fleets to begin electrifying the parts of their fleets that already make sense.”

He adds that most of the routes South African fleets run every week now sit comfortably within the economic break-even point for EVs. The urban environment, especially the last-mile market, is where EVs really come into their own.

“For years, adoption centred around one-tonne panel vans. However, the expected arrival of larger panel vans in 2026 gives fleet managers an electric option that meets their payload needs. New four-tonne-style trucks land directly in the urban distribution segment, where operating efficiency, maintenance intensity and uptime are critical considerations,” Plummer says. While these aren’t LCVs, it’s still terrific that electrification is becoming a viable option for South African operators.

“In parallel, the compact EV category is opening up new opportunities with total cost of ownership now competitive at monthly operating levels that were previously difficult to reach (now at around R10,000 per month). This unlocks the most significant untapped opportunity for technicians, sales reps and field-service teams who drive high kilometres on predictable routes. It is in this area that EVs decisively win on cost per kilometre,” Plummer emphasises. “Fleet managers can now electrify segments of their fleet that were simply impossible a couple of years ago.”

He adds that once owners analyse their vehicles’ route data, how far they travel and what they haul, deciding which segments of the fleet to electrify becomes more straightforward: “What often surprises fleet managers is how different things start to look once the data is analysed in detail. When you strip away assumptions and focus on actual telematics, weekly kilometre patterns, dwell time at depots and how loads shift across the day, it becomes obvious which parts of the fleet are ready to move and which are not.

Plummer says most fleets have a large proportion of routes that repeat almost exactly: “Those are the natural first adopters. Fleet managers will also start to see where an EV’s strengths matter – for example, high stop-start intensity during peak hours, drop-off zones and end-of-day charging back at the base. The point of this is to help identify the segments where the numbers already work. Once operators see that clarity for themselves, the hesitation usually disappears.

“From there, the question is how you want to take the first step. Some fleet managers prefer to own the vehicles outright. Others wish to have everything – for example, vehicles, charging, maintenance, insurance, electricity management and telematics – handled in one place so they can judge the economics without juggling multiple suppliers.”

He adds that either approach works, as long as the transition is adequately tested in a live environment: “A short pilot on real routes usually tells you more than months of theoretical modelling. Fleets that begin electrifying the right segments early benefit from more predictable operating costs and improved resilience to energy and maintenance volatility. Additionally, they will also be the first to see where electrification creates new efficiencies inside their networks.”

Plummer says this shift isn’t driven solely by fuel prices, which naturally move up and down over time. “Instead, it reflects a broader focus on total operating cost, uptime and control over energy and maintenance variables. Those who wait will find that the economics will begin to necessitate a change,” he elaborates.

“At this point, electrification becomes a pressure test of fleet data and of the ability to draw relevant insights from it,” he adds. “With the models arriving this year, the decision is no longer about taking a risk, but about recognising that a workable, commercial option now exists for the right routes and use cases.”

So, it would seem that local realities are starting to converge with global trends. Will South African fleets start to electrify the right routes now, or risk falling behind as operating economics and competition rapidly evolve?