EV makers eye electric light commercial vehicles for last-mile delivery

A GMW e-cargo vehicle carries grocery items for delivery from Bigbasket’s warehouse in the southern Indian city of Hyderabad on Aug. 27, 2019.

By Atul Ranjan

NEW DELHI, NNA - Electric vehicle makers in India are enhancing the introduction of e-cargo carriers to cater to demand from online retailers and logistics firms to use electric light commercial vehicles for their last-mile delivery fleets, cutting transportation costs.

China’s BYD Co.’s local subsidiary BYD India Pvt. Ltd., which manufactures e-buses, has become the latest firm to join the list of EV makers such as India’s Mahindra and Mahindra Ltd. and Gayam Motor Works Pvt. Ltd., which have expanded their product lineups with the addition of e-cargo carriers.

BYD India announced its entry into the commercial EV segment earlier this month with the launch of two new EVs – the T3 electric multipurpose vehicle and the T3 electric commercial logistics minivan – looking to meet corporate needs and with plans to start local manufacturing for such models.

“At this early stage, we are going to focus on creating a more efficient, more reliable B2B (Business to Business) and electric public transportation sector,” Ketsu Zhang, executive director of BYD India, said in a statement.

“We will also gradually look at increasing investment and manufacturing electric vans locally according to Indian market demand and government policies,” he added.

The newly-launched vehicles can effectively reduce the cost of urban logistics distribution compared to a traditional fuel minivan, the Chinese group said.

Local startup GMW, which began manufacturing lithium-ion battery-powered three-wheelers in both passenger and cargo variants in 2015 mainly for global markets, has now shifted its focus to the Indian market, with plans to produce mainly electric three-wheeler cargo carriers to meet local demand.

“We have sold around 6,000 units of our electric three-wheelers both in passenger and cargo variants in global markets including India since we started producing such vehicles four years ago,” Harsha Bavirisetty, GMW’s chief operating officer, told NNA in a recent interview.

“But now, with the EV market slowly evolving in India, we have shifted our focus from the global market to the (South Asian) country,” Bavirisetty said.

Online grocery firm Grofers launches electric vans for last-mile delivery in the northern Indian city of Jaipur on July 22, 2019. (Photo courtesy of Grofers)

The four-year-old startup currently has an order book for around 5,000 e-cargo carriers from various e-commerce and logistics firms in India, according to Bavirisetty.

GMW’s electric cargo carriers are currently deployed with e-commerce firms, such as India’s largest online food and grocery store bigbasket.com run by Innovative Retail Concepts Pvt. Ltd., Amazon.in operated by Amazon Seller Services Pvt. Ltd., an affiliate of U.S. Amazon.com Inc., and Flipkart.com run by Flipkart Internet Pvt. Ltd.

“Most of our EVs are currently deployed for the last-mile delivery purpose in Hyderabad, where our company is based,” he said.

“Either these firms or their third-party logistics service providers are using our vehicles,” said the COO, adding that even the local unit of Swedish furniture retailer Ikea in the southern Indian city of Hyderabad is using its e-cargo carriers.

The running cost of a diesel-powered LCV is approximately 3.5 rupees/km ($0.049), but in the case of an EV it is just 50-70 paisa/km ($0.007), he said.

Online grocery firm Grofers India Pvt. Ltd. recently announced its plan to add 500 more e-vans to the existing fleet of 50 EVs for last-mile delivery across various cities by the end of 2019 in a bid to reduce its overall delivery costs.

“The initiative will not only help us bring down our carbon footprint by 40 percent but also reduce our overall delivery costs by up to 50 percent,” Saurabh Kumar, the founder of Grofers, said in a statement.

Another online grocery firm, Milkbasket, run by Doorstep Retail Solutions Pvt. Ltd., has also started experimenting with EVs for last-mile delivery to slash logistics cost.

“We are running multiple experiments with EVs across our supply chain,” Anant Goel, co-founder and CEO of Milkbasket, told NNA in an interview.

Goel, however, said that issues such as lack of charging infrastructure and concerns about range are preventing large-scale deployment of e-cargo carriers by grocery-delivery firms like Milkbasket.

According to GMW’s Bavirsetty, it’s because of these issues that EV makers are mainly targeting the last-mile delivery segment and B2B market as e-cargo carriers don’t have to travel a long distance for delivery.

“Our EVs, for example, offer a range of 100-110 kilometers when fully charged, which can make several last-mile deliveries,” he said. “We are, in fact, also offering our own charging solutions to our customers to allay their concerns and ensure smooth delivery.”

Vinay Piparsania, global consulting director at consulting firm Counterpoint Technology Market Research, who tracks India’s automotive industry, said that the last-mile segment has emerged as a potential growth area for various EV makers at a time when the country is still pushing for charging infrastructure.

“E-rickshaws, catering to last-mile connectivity for commuters, have already emerged as the fastest growing product segment in the EV market. Now, in an effort to further tap the last-mile segment, some of the EV makers are coming up with e-LCVs for goods delivery,” Piparsania told NNA.

According to the Society of Manufacturers of Electric Vehicles, the industry lobby group, EV sales in India stood at 759,600 units in the year to March 2019.

Electric three-wheelers, including e-rickshaws, alone accounted for 630,000 units, while the rest were electric bikes (126,000 units) and electric and hybrid cars (3,600 units).



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