Cross-Country Assessment of Total Cost of Ownership for Light Commercial Vehicles: Insights from Italy and Pakistan

Achieving global carbon neutrality by 2050 requires active decarbonization efforts from both developed and developing countries, with the latter being responsible for most greenhouse gas (GHG) emissions. This study examines the potential of low-carbon mobility transitions, focusing on the electrification of light commercial vehicles (LCVs)—a rapidly expanding segment with high emissions in urban freight. While Total Cost of Ownership (TCO) analyses show electric powertrains to be cost-effective in developed markets, there is limited empirical evidence for developing economies. To address this gap in the research, this paper compares the TCO for electric LCVs (eLCVs) in Italy and Pakistan, representing contrasting stages of electric mobility adoption. Using a bottom-up model for Pakistan and robust datasets for Italy, this study assesses how macroeconomic conditions, tax structures, and policy frameworks shape lifecycle costs. The TCO assessment underscores a stark geographic divergence: in Italy, eLCVs (0.359 EUR/km) are currently 19.7% more expensive than their diesel counterparts (0.300 EUR/km). In contrast, Pakistan demonstrates favorable competitiveness for eLCVs, with a TCO of 0.119 EUR/km compared to 0.136 EUR/km for diesel equivalents. The analysis reveals stark contextual differences in cost components, infrastructure, annual distance travelled, and policy effects, highlighting the need for context-specific strategies. The findings offer practical guidance for policymakers and fleet operators, supporting more equitable and effective decarbonization strategies globally.