Q&A – Zero-emission delivery is possible for retailers – here’s what’s needed

With more than 1200 electrical vehicles now up and running in 150 locations globally, Himanshu Raj, Global Sustainable Mobility Leader at Ingka Group shares the latest updates on the target and lessons learned so far. The interview was done in collaboration with the World Economic Forum.

Q: How do the needs of customers in different regions and markets impact the vehicles and solutions you use?
A: Already today, we are using over 30 different solutions depending on needs in the specific region. For example, in parts of Italy and Germany we deliver to our customers on electric cargo bikes because it is efficient to do so in narrow and congested streets. Cargo bike deliveries are faster, cost effective and most important zero emission. It has flexibility with choosing shorter routes and avoiding delays due to the search of parking spaces. We often work with different partners; in Italy the work is done together with a social delivery partner. Another local example is Australia, where we recently started delivering via electric tuk tuk to trial and test. These will benefit cities like Sydney for example where there can be congested roads. And in Paris, we are delivering via boats on the river Seine. In India, we reach our customers via electric three-wheelers across seven cities, including Mumbai, Bengaluru, Hyderabad.

IKEA recently announced it had been using and piloting solar-powered cargo e-bikes. What would be needed to scale delivery further for Ingka Group?
Ingka Group is now evaluating how we can implement and use these new e-bikes in some countries. What we have found is a key to success of initiatives such as this, is to let each country evaluate and trial based on local market needs and local regulations. There is no one size fits all solution, and we will continue to trial and develop new and innovative solutions.  Investing in innovations and technologies like zero emission vehicles (BEV/FCEV), digital tools, charging infrastructure, and autonomous vehicles is needed to scale up decarbonizing urban freight deliveries in the future.

One thing we have benefitted from is our investments to support our transition to zero emission deliveries. Our investment arm, Ingka Investments has made a number of investments in companies. This has included partnering with local last-mile delivery providers in countries like the US and Canada, where we invested in GoBolt and in China with DST. Both these companies use a range of EV fleet vehicles.

Overall – how does Ingka Group (IKEA) work with reducing climate footprint?
As part of our People & Planet Positive strategy, IKEA has made a commitment to become climate positive by 2030 and net-zero latest 2050. As the biggest retailer in the IKEA franchisee system, Ingka Group has an important part to play when it comes to reducing the IKEA climate footprint. Key actions include consuming 100% renewable electricity in our operations; introducing a more plant-based food offer; offering zero emissions home deliveries and EV charging; providing circular services; and enabling and encouraging customers to live more healthy and sustainable lives by offering products and services to support them in living within the boundaries of our planet. In February 2023, we were pleased to report that Ingka Group had reduced its total climate footprint across our value chain (scope 1, 2 and 3 emissions) by 13.6% from our baseline financial year 2016.

Tell us how the ‘Zero Emission Delivery target has impacted delivery since it was made?

More than 1200 electrical vehicles are now up and running in 150 locations globally. Already in 2019 Shanghai became the first city where 100% of our home deliveries are transported by EV vehicles and today, we have 100% zero-emission home deliveries in 17 cities including Amsterdam, Vienna, Glasgow, Nice, Oslo, Shanghai and nine other major cities in China. Regarding larger vehicles, we are amongst the first movers. This also includes forklift trucks and shunting trucks used in our operations. We require all new vehicles to be zero emission or electric wherever feasible.

When Ingka becomes fully zero emission for delivery in 2025, how will it be different?
As per various technical studies, demand for urban last-mile delivery is expected to grow by 78% by 2030, leading to 36% more delivery vehicles in the world’s top 100 cities. We are working towards 100% zero emission delivery in 2025 because it aligns with our vision to create a better everyday life for the many people. It supports in creating cleaner cities and in the long-term lower’s costs. It’s also essential in order to provide a good service and remain relevant for customers, we need to meet them where they are and that’s in the cities.

Himanshu Raj, Global Sustainable Mobility Leader at Ingka Group

What are the main challenges you face regarding sustainable last mile delivery?                                            

There are some key barriers many retailers face in scaling these initiatives. lack of electric vehicle model suitable for our type of products (home furnishing) and technological limitation for our operations with driving range in remote areas and extreme weather conditions. To overcome this, we have decided to collaborate with car manufacturers to support the development of new EV,

There is also a lack of public charging infrastructure, which needs to be addressed by businesses and governments alike. At IKEA we are continuously working with different solutions all over the world and we also invest in expanding our own charging infrastructure. Ingka Group now provides access to EV charging stations in all our stores where parking is provided. 

Another barrier is limiting regulations, for instance not allowing delivery drivers in some countries like Sweden to drive EVs under same conditions as diesel vehicles due to increased weight of EV battery packs plus delivery loads. We believe in collaboration and working together with our partners like World Business Council for Sustainable Development, Climate Group and C40 Cities in ramping up decarbonizing of transport operations. We call on all industry partners and city and national governments (leaders) for pushing decarbonizing transport agenda for a sustainable and healthier future.

If other companies want to go zero-emission for delivery, what advice would you give them to help them be successful?
Do not wait for the perfect solution and start implementing today. There is no one solution that fits all, and it is okay to try and fail. Effective collaboration is the key, finding the right partners for your local needs. As a global set-up, we cannot move with same pace everywhere, scale-up where you can with impact and continue pushing the barriers in other markets. So, keep innovating and moving.

This interview Q&A was done in collaboration with the World Economic Forum. You can read the full version here on the We Forum blog.

Read more about Ingka Group’s sustainability performance and commitments in the new Annual & Sustainability Summary report.

About Ingka Group

With IKEA retail operations on 31 markets, Ingka Group is the largest IKEA retailer and represents about 90% of IKEA retail sales. It is a strategic partner to develop and innovate the IKEA business and help define common IKEA strategies. Ingka Group owns and operates IKEA sales channels under franchise agreements with Inter IKEA Systems B.V. It has three business areas: IKEA Retail, Ingka Investments and Ingka Centres. Read more on www.Ingka.com.