Cost-Benefit Analysis of the Integration of Electric Semi Trucks to the Walmart Distribution Network within the United States

Abstract

Global warming is caused by greenhouse gasses blanketing and warming the earth. The UN has issued a special report saying that if global warming is not mitigated to 1.5 Celsius then there could be severe consequences including: flora and fauna extinction, coastal flooding, and severe droughts (un.org). Businesses and consumers are consistently become more environmentally aware, especially among younger generations. When cost-efficient, corporations will make adjustments within their business model to improve sustainability to capture more market share while additionally working to allow for their continue to be a positive future for younger generations. Walmart is an example of a company that has prioritized the customer by developing an incredibly cost-efficient supply chain that results in the customer receiving the best price. Current government subsidies and advances in electric vehicles have allowed for market opportunities to arise for Walmart to potentially make vast improvements within their distribution model. The market opportunity is to buy Tesla electric semi-trucks, charge them by using a Tesla Megacharger, and power them by either grid electricity or energy created by solar panels. This project results in a net present value of money saved of approximately $11,000,000 and $5,000,000 over a span of 30 years. This would also secure more fixed costs than variable costs because transportation prices would not rise with diesel. There are numerous challenges related to the adoption of an entirely new system, but with an approximate saving of 2,481,960 tons of CO2 by 2050, my study attempts to address and quantify various benefits and negatives associated with the change in systems.