The Future of Last Mile Fleet Tires to 2030, a new market report from Smithers, details the exceptional growth of delivery tires with sales reaching 215 million units in 2025 which equates to global sales revenue of $21.2 billion. 

Demonstrating above-average growth prior to 2020, the market continues to experience outstanding growth through 2030, according to Smithers’ forecast. By 2030 global demand for last mile fleet tires will reach 365 million units and yield sales of $38.0 billion, which is a 12.4% compound annual growth rate (CAGR) for 2025-2030.

The last mile fleet tire market fully demonstrates key trends in the tire industry, including urbanization, powertrain transition, sustainability and increased government regulation.

Urbanization

Urbanization is expected to increase average city density by 30% over the next decade, stretching existing systems as demand rises. Urban planners and residents are raising livability and sustainability higher on their agendas. Increased connectivity is opening the door to multiple shared-mobility options and could also help to improve traffic flows. Increased urbanization, especially in China and India, could reduce the demand for present-day vehicle designs in favor of those specifically designed for city-type journeys (relatively low speed, short range, and possibly only one or two occupants). Parking issues will also favor small vehicles in cities, as will an uptake of driverless functions.

Transition to EVs

While there have been efforts made to impose a future phase-out of the sale of new ICE vehicles (e.g., in Germany and California – the latter now in doubt), in reality the adoption of EVs is going to depend upon the maintenance or extension of direct or indirect subsidies, to build on slower than expected shifts in consumer preferences, although fleets are already more receptive than the average buyer. 

Globally, governments remain likely to introduce or enhance incentives and regulations favoring EV adoption, ranging from financial incentives to tax credits and stricter emissions standards for urban delivery fleets. These measures aim to facilitate businesses in implementing EV-focused delivery processes, considering the higher costs of EV last mile delivery electric vehicles.

Sustainability

Sustainability in the tire industry has become a dominant theme in recent years and will continue to be more prominent. Tire usage presents its own sustainability issues, these include:

• Optimized (minimal) rolling resistance to promote improved fuel economy and reduced emissions (many regulations push for approved or highly rated LRR tires)
• Tire management practices as they concern tire pressure, again related to fuel economy and emissions as well as tire wear rates and safety
• Faster tire wear, as measured in service time (not distance), leading to more rapid tire replacement than in less-utilized non-fleet, non-commercial applications, giving rise to issues of disposal or recycling. Retreading helps prolong casing life in many truck and other tire applications, including LMD tires.

Emissions

Transport is one of the main areas in which governments around the world are taking action to reduce greenhouse gas emissions. This increases pressure to develop alternatives to gas and diesel as methods of propulsion. Electric (battery) power is one of the main contenders as it has no emissions at the point of use, which is of increasing importance in cities. Depending on the method used, it can also produce low emissions
at the point of generation.

Targets have been set for CO2 emissions, driven by the Kyoto Protocol. An update of this was made at the Paris climate conference (COP21) in December 2015, where 195 countries adopted the first ever universal, legally binding global climate deal (although the US has withdrawn again, as in 2017).