Making Electric Dreams Possible: Why We Invested In Einride
How Einride drives road freight decarbonisation and prepares us for an autonomous future.
Trucking has no option but to move forward. Road freight transportation accounts for 7% of all man-made greenhouse gas emissions and that number needs to drop, fast. Regulators from Amsterdam to California are banning diesel trucks and shippers like Nike and H&M are committed to carbon-neutrality. The change is real and there will not be a U-turn.
But to decarbonise trucking, we can’t just yell at the hauliers to ditch diesel. Electrification already makes clear environmental sense, but electric vehicles, or EVs, have to make financial and operational sense too. And that is tricky to achieve.
This is the core proposition of Einride, Maersk Growth’s newest investment and our biggest ever, part of a funding round worth $110 million. A Swedish startup founded in 2016, Einride has already made media headlines for its autonomous electric truck but the main reason we invested is more immediate: their ability to make the move away from carbon possible and help companies electrify their operations.
In the wake of the Paris Agreement, EVs are seen as a crucial way for companies to meet their commitments.
Among road freight experts and operators there are still varying predictions around the feasibility of different technologies, realistic timelines and ultimate winners. However, what has become clear is that EV is seen as one of the major long term solutions to green road logistics which can oftentimes be operated cost competitively today.
So, why don’t we see more electric trucks on our roads today? The short answer: Because electric transportation is hard.
It’s a different animal: Electric trucks are more complex to manage than diesel trucks. For starters, they have very different cost structures: Purchasing costs are much higher but fueling is much cheaper and depreciation is much dependent on battery lifetime. Predicting total-cost-of-ownership on a per-mile basis and monitoring it throughout a truck’s lifecycle can be overwhelming.
Additional operational complexities: To ensure cost-competitiveness, maximum asset utilisation is required but EV fleets pose challenges that were unknown in the diesel days. A diesel truck can simply drive up to a gas station and refuel within minutes whereas EVs should slow charge as much as possible to extend battery lifetime. To avoid idle time, drivers must be able to switch between vehicles during their shifts and/or utilize chargers while (off)-loading. Further, suitable charging infrastructure must be in place and fluctuating electricity prices need to be taken into consideration.
Inapplicable incumbent structures: Most transport companies are open to innovation and ready to embrace new technology, but they were built on diesel trucks. To manage an electric fleet effectively, centralised planning and execution are necessary, and a holistic, totally new operating system is required.
Einride: Transition from electric dreams to electric avenues
Einride was founded by former Volvo director Robert Falck in 2016 who has since then been able to attract an outstanding, tech-savvy executive team that is composed of OEM veterans, tech company leaders, and operational executors.
The company is a one-stop-shop for shippers to remove the barriers to electric transport and make sustainable change happen. It virtually takes its customers by the hand and enables an EV transition towards a jointly defined ambition level via a 3-step approach:
1. Digitize: Quantify the potential and identify ‘no regret’ moves
As a starting point, Einride pulls all the transport data from the shipper’s various systems into its Freight Mobility Platform. With this information, the platform conducts a detailed assessment taking freight needs, hardware specifications and charging infrastructure into account: It maps the usage of trucks, drivers and chargers to maximise utilisation. In-built algorithms identify the best routes for EVs, coordinate driver change-overs and suggest the best times to charge. On this basis, a business and environmental case is made which determines where, how and when EVs should be rolled out.
2. Electrify: Put EVs on the road
Einride doesn’t simply provide advice to its clients, it takes full responsibility for operating a shipper’s entire EV operation. Once the Freight Mobility Platform is activated, Einride ensures that the required infrastructure is in place and activates its transportation-as-a-service offering. Shippers are not left alone with hardware purchases, staff training and operational efficiency because Einride handles the day-to-day execution of transportation. The required EV fleet is provided by Einride (OEM-agnostic) and the Freight Mobility Platform orchestrates the execution which is done via carrier partners. Over time, insights from operations are fed into the planning algorithms which leads to further optimisation. Meanwhile, the shipper can track all ongoing operations via a dedicated portal and make decisions on that basis.
3. Automatize: Phase-in autonomous vehicles
In the long run, road transportation will be increasingly autonomous. To get closer to that future, Einride has developed a Pod that is both electric and self-driving. As regulation eases up and technology advances further, these Pods are increasingly phased into operation which will lead to significant cost and efficiency improvements.
Ultimately, Einride not only offers clients the chance to reduce their C02 emissions by 94%; it provides financial savings over rival services on diesel.
The opportunity is huge!
As the massive global freight trucking industry pushes away from diesel, Einride is establishing valuable first-mover advantages.
Already, the team has attracted a string of renowned customers, including Coca Cola and Electrolux. Einride has helped Swedish vegan food supplier Oatly reduce its carbon footprint by 87% on selected routes in a single month, and trucks carrying its software will soon be travelling over 300km per day on behalf of supermarket giant Lidl.
Now, Einride is looking to expand. They plan to move into France, Britain, Germany and, crucially, the United States. Ultimately, the goal is truly global: Einride wants to be positioned as the EV operating system across shippers, partners and OEMs.
With the support of Maersk Growth and other fantastic investors and partners, we believe Einride can seize this opportunity.
But it’s not just about opportunity. It’s also about synergy.
Not only is this the biggest investment Maersk Growth has made to date, it’s also been carried out in close collaboration with our parent company to ensure a truly profound impact. Maersk has recently established a dedicated Decarbonisation Team headed by Morten Bo Christiansen working closely with Nikolaj Michael Pihl Kristensen, Global Head of Landside Transportation. Facilitated by our structured Value Creation Framework they have built a close working relationship with the Einride team and are ready to provide Rocket Fuel for the next steps of the partnership.
As Maersk moves towards a carbon-free future, we believe Einride can be an important and natural partner on this decarbonisation journey.
Nikolaj puts it well — “I am very excited by the investment in Einride and maybe more so about what it enables as we partner for a more sustainable transport system and environment”, and we couldn’t agree more.
As a company, Maersk recognises that a move away from carbon is necessary and inevitable. In fact, Maersk have already mapped out a carbon-reduction timeline for the whole company.
In parallel, Maersk is pushing ahead with plans for electric road transportation. In fact Maersk North America has already rolled out a fleet of EVs, and we are exploring the implementation of this technology in other parts of the business.
As we push towards carbon neutrality, both for ourselves and the wider world, Einride is a natural partner.
Together, Maersk and Einride can offer combined expertise to customers and help them design their new, decarbonised transportation networks. We believe that this can help and support all of us to understand the strategic choices we need to make, in order to have the best offering in a future, where our customers need us to play our part in delivering carbon neutral products — or as Nikolaj puts it:
“Einride’s cutting edge technology, operational experience and thought leadership will help us towards understanding how the future of landside transportation will shape up”.
At the same time, Einride will enable us to provide a joint sustainable offering to customers. Many of Maersk’s customers are looking to them for support on landside decarbonisation today, and as Nikolaj says,
“Investing in Einride is also investing in a partner that we want to bring into the dialogue with our most important customers and thereby help them evaluate how their future infrastructure could become more sustainable”.
With Einride, we can fill this gap; by leveraging our data across relationships, employee expertise and product offering, they can provide additional support to our customers in building sustainable supply chains.
We are truly excited about the potential of this partnership..
.. and Nikolaj summarizes it perfectly:
“The combination of Einride’s expertise, our customer portfolio and the Maersk Growth ABCDE places us in a unique position to have a profound impact on decarbonisation and that is certainly an opportunity worth investing in!”
We’re hugely excited to be part of this development as we work with Einride towards a greener future.
Right, enough talking: let’s go change the rules of trucking!
If you want to partner with Maersk Growth to build sustainable logistics systems and facilitate global trade, feel free to send your pitch to dealflow@maersk.com or reach out to any of the authors of this article.
