As companies consider how to reduce their emissions to comply with the goals of the Paris Climate Treaty, they can look to electric vehicles as a feasible option. Carbon emissions from vehicles contribute significantly to global warming, and the transportation sector is one of the larger contributors to greenhouse gas emissions (GHG) in the U.S. As institutional investors seek to offset and mitigate the rising levels of carbon and other GHGs, electric vehicles (EVs) are an increasingly viable solution. With sales of EVs growing faster than predicted a few short years ago, the outlook for EV production and adoption is becoming increasingly robust.
Much of the focus until now has been on consumer adoption of EVs and on the increasing cost parity of EVs and internal combustion engine vehicles. But as total cost of ownership for an EV falls, EVs are also becoming more feasible for commercial use, and shareholders of both fleet buyers and manufacturers are poised to benefit from greater commercial adoption. One of our portfolio holdings, United Parcel Service, for example, is currently buying a fleet of 1,000 electric vans, part of an electrification effort that includes converting up to 1,500 delivery trucks to battery electric and initiating purchase of 125 Tesla Semi trucks and Daimler electric trucks.
Commercial adoption should also help the bottom lines of large consumer staples companies heavily dependent on transportation. Freight is one of the greatest areas of cost inflation among consumer staples companies such as our portfolio holding, Pepsico, which is ramping up its electrification efforts with 100 Tesla Semis on order. Other major consumer staples companies with electric trucks on order include Walmart and Sysco.
As manufacturers continue to consolidate production in larger, more efficient plants, and retailers carry less inventory and demand delivery within ever more narrow time windows, transportation logistics become an increasingly important competitive advantage. Commercial EVs remain an underappreciated source of net-environmental benefit and investment opportunity. ClearBridge encourages a diversified fleet and views several portfolio companies taking advantage of the increased feasibility of EVs in their operations as significant progress in moving toward sustainable transport.
EV adoption will also involve environmental and social challenges, and we are partnering with our portfolio companies both to establish responsible and efficient sourcing practices and to reduce reliance on rare earth minerals through innovation. Another portfolio holding, Umicore, for example, is a global materials technology and recycling company based in Belgium. During the year, ClearBridge hosted several engagements with Umicore management. Umicore has a large internal recycling operation that provides some of the materials like cobalt needed for its battery cathode production, reducing the impact of materials sourcing. Battery recycling technology has the potential to be a large business for the company, and Umicore is a good example of how we are working with portfolio companies to help make sustainable and fair production and consumption of EVs possible.