Sourabh Saini, a delivery man for the Indian online supermarket BigBasket, is delighted with the attention he gets as he drives his three-wheeled electric van through Noida, a satellite city on the outskirts of Delhi.
“I like how my electric van is always noticed,” said Saini, who made the switch from fossil fuels about eight months ago as part of BigBasket’s drive to electrify 90% of its fleet. “Customers are amazed at how quiet it is. They get curious about my experience driving an EV and start asking about price and range.”
That makes it somewhat of a novelty in India, where BigBasket and online giants Amazon.com Inc. and Flipkart — which could hold the key to getting more gas-guzzlers off India’s roads — are struggling to find enough vehicles to meet ambitious targets to electrify their delivery fleets.
“It’s not plug-and-play,” said Mahesh Pratap Singh, Flipkart’s head of sustainability and responsibility. “When we scanned the landscape, there wasn’t much from a supply and reliability perspective, or a viable commercial option out there. That led us to believe that you have to set one big bold ambition and really push the whole ecosystem give it back and shape it, rather than just being a consumer.”
The nature of online delivery operations – quick rides from a central hub where a standard charging solution can be installed – is well suited to electric vehicle adoption, removing fears of range and the shortage of charging infrastructure that have proved a roadblock for the general acceptance. Electric vehicles account for less than 1% of annual car sales in India, compared to about 6% in China.
Cheaper running costs, plus the ability to polish their green reputation in India’s polluted and noisy cities, also make EVs an attractive option. “It makes economic sense,” Flipkart’s Singh says. While the initial cost of an EV may be higher, “monthly running costs are lower because your maintenance costs are lower. The dynamics start to change as the scale rolls in.”
But the Indian delivery giants are finding that there are not many models available that can be deployed on a large scale, and the supply that is there cannot keep up with the demand. Maruti Suzuki India Ltd., the country’s largest automaker, does not make electric-powered cars, although the cost of an EV exceeds most buyers.
India’s largest two-wheeler manufacturer, Hero MotoCorp Ltd., will not launch its first electric scooter until around March 2022. Tata Motors Ltd., a leader in electric passenger vehicles with its best-selling Nexon, does not have an electric scooter small commercial vehicle of the type commonly used for last-mile deliveries. Tata has started developing electric small commercial vehicles because of the sector’s “strong” potential, said Girish Wagh, president of the automaker’s commercial vehicle unit.
As a result, Amazon, Flipkart and BigBasket largely rely on Mahindra & Mahindra Ltd.’s Treo Zor, a three-wheeled van that costs rupees 273,000 ($3,670) and has sold about 1,000 units in the five months since deliveries began in November. Mahindra produces about 400 Treo Zor vans per month.
“There aren’t enough quality manufacturers making electric vehicles these days,” said Olaf Sakkers, general partner and co-founder of venture capital firm RedBlue Capital, which has invested in two Indian EV startups. “E-commerce companies like Amazon and Flipkart are determined to go electric, but the biggest problem is supply.”
Amazon aims to have 10,000 EVs delivering parcels in India by 2025, while Walmart Inc.’s Flipkart. has said it will deploy more than 25,000 EVs by 2030 and be fully electric. BigBasket, part of Tata Group, has committed to meet its 90% EV target within three years. Flipkart and Amazon are both affiliated with Mahindra Electric Mobility Ltd. for Tricycles and Hero Electric Vehicles Pvt. for scooters.
Certainly, the electrification of delivery fleets also takes time in North America. Amazon has ordered 100,000 electric vans from start-up Rivian Automotive Inc., which cut production of its debut vehicle last month due to supply chain bottlenecks.
Walmart Canada aims to convert 20% of its fleet to electric vehicles by the end of 2022 and has reserved 130 Tesla Inc.’s Semi Trucks, which have not yet started production.
Read more: Tesla faces bumpy ride entering India after success in China
Early moves to EV fleets in India were also plagued by poor designs that couldn’t withstand monsoon rains and notoriously bumpy roads.
When BigBasket began an EV test in 2017, the removable batteries were not completely waterproof and some caught fire in accidents. The vehicles sometimes ran out of power and had to be towed back to the depot, and the low-slung battery packs often got flooded during monsoons.
BigBasket worked with automakers to produce fireproof and waterproof interchangeable batteries that are rugged and durable in harsh working environments, and the vehicles are now equipped with devices to keep track of how much charge is left, said KB Nagaraju, Chief Customer Officer at BigBasket.
Financing and a lack of incentives also hinder the electrification of the delivery fleets. Uncertain about the new technology and the resale value of EVs in the event of defaults, banks are reluctant to lend, and when they do, they charge higher interest rates, BigBasket’s Nagaraju said.
Meanwhile, a 100 billion rupee stimulus program launched in 2019 has failed to meet its targets. Only 19,064 three-wheelers were sold against the target of 500,000 and only 74,634 two-wheelers against the target of 1 million.
“Currently available grants are still insufficient to bridge the price gap between an average combustion engine vehicle used in commercial fleets and a comparable EV,” said BloombergNEF analyst Allen Tom Abraham. “In India, sales of electric buses, taxis and light trucks have yet to take off, even though there are very ambitious targets for the deployment of electric vehicles at the federal and state levels.”
Despite the roadblocks, Saini, the delivery boy, is a convert.
“Our future is electric vehicles,” he said. “All e-commerce companies, big or small, should use EVs because they are economical and environmentally friendly. They are very low maintenance compared to diesel and petrol cars, so they are cheaper for us.”
(Except for the headline, this story has not been edited by NewsMadura staff and has been published from a syndicated feed.)