Europe stands at a critical crossroads, facing a convergence of economic, geopolitical and environmental challenges. A pandemic-induced breakdown of supply chains, energy price shocks triggered by Russia’s invasion of Ukraine, and renewed American isolationism have tested Europe’s resilience and exposed its vulnerabilities.

Yet these same disruptions have also clarified the path forward. Resilience, economic competitiveness, and decarbonisation can no longer be regarded as parallel ambitions but as clearly interdependent imperatives. The path to a secure, prosperous, and sustainable Europe lies in a distributed, electrified, and intelligent energy system. The most pragmatic place to begin is transportation: the largest consumer of imported fossil fuels and one where scalable alternatives already exist.

While the shift toward electric vehicles is gaining traction in passenger cars, progress in commercial vehicles has lagged. With just 1% of the European truck fleet electrified, the road freight industry and the vital transportation infrastructure it forms are a dangerous liability.

The battle to electrify will be fought not on highways, but in depots, where fleets reside and where 80% of future charging sessions are expected to occur. These sites must accommodate 10–20 times their current electricity demand. First, they must secure massive new grid connections; then, they must manage electricity consumption smartly to stay competitive.

Solving this challenge will require unprecedented cooperation between the public and private sectors to scale distributed infrastructure, unlock investment through innovative financing models, and cultivate domestic software champions. It won’t be easy—but the potential reward is enormous: a Europe that is both energy-independent and globally competitive.

The Current Energy Playbook Is Broken

Europe imports 63% of its final energy demand and 80% of its oil used in transportation. Historically, European energy security has centered around import diversification—sourcing from many suppliers to avoid over reliance on any one source and maintaining multiple fallback options.

In the wake of Russia’s invasion of Ukraine, Europe quickly shifted imports to the U.S. in an attempt to secure energy supply and stop funding the Kremlin’s war chest. But the reality of a second Trump administration has shown that this strategy falls short.

Reliance on expensive, imported fuels has also damaged Europe’s competitiveness. Since 2022, industrial electricity prices have risen to more than double those in China or the U.S., pressuring manufacturers, export sectors, and the millions of European workers they employ.

In this context, shifting away from fossil fuel imports goes beyond the historical narrative centered around carbon reduction. It is a strategic infrastructure imperative—an effort to localize energy production and decouple European prosperity from geopolitical volatility.

Electrification as a Competitive Advantage

Like Europe, China lacks significant oil and gas reserves. But a decade ago, they responded decisively, diverting investment away from real estate into electrotechnology: research and development, supply chain, and manufacturing.

Today, we’re seeing the payoff. Renewable electricity generation is now the cheapest source of energy; advances in battery technology are addressing supply stability despite intermittent generation, and EVs are now viable and competitive alternatives for consumption.

China also offers the starkest picture of what’s possible for the future given these monumental breakthroughs. It now produces 30% of its electricity through renewables, more than 50% of cars sold are either fully-electric or plug-in hybrids, and over 14% of new trucks sold are electric or alternative solutions.

Most remarkable is the pace of the shift, and it's showing no signs of slowing. Just last month, CATL founder Robin Zeng predicted that over half of all new truck sales in China will be electric by 2028—just three years away.

Such bold predictions naturally invite skepticism. Yet a closer look reveals that electrification has crossed several inflection points, most notably on cost. Battery prices have fallen by almost 90% over the past decade, dramatically reducing the main cost differential between EVs and their internal combustion engine counterparts. As a result, the total cost of ownership for EVs is now at or near parity, or even superiority, across all major vehicle weight classes.

The driving force behind electrification is no longer virtue, but value.

Depots, The Critical Battleground

Here in Europe, the average depot will need 10–20 times its current power capacity to support a fully electrified fleet. This upgrade requires an investment of €1–2 million, which is beyond the reach of most transport operators working with profit margins of just 0–3 percent. However, for those who do invest, the benefits extend well beyond vehicle charging.

Fortunately, a robust distributed grid is not only valuable for depots but also critical to the wider energy system. Large grid connections enable battery storage systems to inject or withdraw electricity to help balance fluctuations from intermittent renewable generation and unexpected demand spikes, increasingly common in an electrifying transport system.

Importantly, grid balancing services are compensated by grid operators. This means that grid connections, when paired with battery energy storage systems (BESS), can open up new revenue streams for depot owners. These revenue opportunities, in turn, can attract private sector capital to finance the infrastructure needed to scale electric fleets.

Combining grid connections with BESS thus achieves a dual purpose—enabling the transition of electric transport and the capacity to absorb renewable energy generation.

But this is just the beginning. EVs themselves contain large batteries, which together with smart software can also provide grid services. Over time, these mobile assets will become key building blocks in the future energy system.

The distributed nature of depots and vehicles means tomorrow’s grid will rely less on centralised infrastructure like nuclear plants or hydro storage, and more on a flexible, decentralised network of energy producers and consumers. In an age when large-scale infrastructure is increasingly vulnerable to disruption or sabotage, including undersea fibre-optic cables and power stations, decentralisation offers a strategic advantage.

Depots integrated into the wider power system thus hold the potential to do more than just decarbonise transport—they can contribute to a more resilient, decentralised Europe.

The Smart Divide: Software Separates Winners from Losers

A decentralised power system is inherently more complex as it depends on many distributed components operating in sync. A successful transition will depend on smart software that can coordinate energy flows across thousands of sites and assets in real time.

An important tenet in the future power system not to be overlooked is the transport operation within the depot itself. By aligning route planning and charging schedules with patterns of electricity production and consumption, both the transport operator and the wider energy system stand to benefit—from reduced operating costs, deferred grid investment and improved grid stability.

Chinese battery manufacturer CATL estimates that electric trucks could reduce the cost of transport per tonne-kilometre by up to 35 percent compared to diesel. At the same time, however, an unmanaged electric fleet can cost as much as 50 percent more than a well-managed one. In an industry where margins are tight, software may be the most decisive factor in competitiveness.

The Road Ahead Starts in the Depot

Depot electrification is more than a technical upgrade—it is a pivotal enabler of Europe’s energy, economic, and industrial transformation. By investing in distributed electric infrastructure, enabling grid-integrated depots, and deploying intelligent software, Europe can reduce its dependence on volatile energy imports, restore industrial competitiveness, and accelerate the transition to a decarbonised future. This is about more than cleaner trucks. It’s about turning the backbone of logistics into a strategic asset—one that underpins a more resilient, decentralised, and prosperous future.

The decisions made today will determine whether Europe leads in the energy transition—or falls behind in a world that is rapidly electrifying.