Sourabh Saini, delivery driver for the Indian online supermarket BigBasket, is delighted with the attention he receives when driving his three-wheeled electric van through Noida, a satellite town on the outskirts of Delhi.
“I like the way my electric van gets noticed,” said Saini, who switched from fossil fuels about eight months ago as part of BigBasket’s efforts to electrify 90% of its fleet. “Customers are surprised at how quiet it is. They become curious about my experiences driving an electric vehicle and ask about price and range. ”
That makes it a first in India, where BigBasket and online giants Amazon.com Inc. and Flipkart – who may have the key to getting more fuel guzzlers off India’s roads – are struggling to get enough vehicles to meet ambitious goals to achieve electrify their delivery fleets.
“It’s not plug and play,” says Mahesh Pratap Singh, Head of Sustainability and Responsibility at Flipkart. “When we scanned the landscape there wasn’t much in terms of supply and reliability or a viable commercial option. This has led us to believe that you have to have a big, bold ambition and really initiate and shape the entire ecosystem instead of just being a consumer. ”
The type of online delivery – fast trips from a central hub where a standard charging solution can be installed – is well suited for the introduction of electric vehicles to overcome the range fears and the lack of charging infrastructure that are an obstacle to the have proven widespread. Electric vehicles account for less than 1% of annual car sales in India compared to around 6% in China.
However, India’s delivery giants are finding that there aren’t many models available that can be deployed on a large scale, and supply cannot keep up with demand. Maruti Suzuki India Ltd., the country’s largest automaker, does not make electrically powered cars, although the cost of an electric vehicle exceeds most buyers.
India’s largest two-wheeler manufacturer Hero MotoCorp Ltd. won’t launch its first electric scooter until March 2022, a small commercial vehicle of the type normally used in last mile delivery. Tata began developing small electric vehicles because of the “strong” potential of the sector, said Girish Wagh, president of the automaker’s commercial vehicle division.
Amazon, Flipkart and BigBasket mainly rely on the Treo Zor from Mahindra & Mahindra Ltd. Mahindra produces around 400 Treo Zor vans a month.
“There are not enough quality manufacturers that make electric vehicles today,” said Olaf Sakkers, General Partner and co-founder of the venture capital company 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 electric vehicles in India by 2025, while Walmart Inc.’s Flipkart has announced that it will have more than 25,000 electric vehicles and be fully electric by 2030. BigBasket, a unit of the Tata Group, is committed to meeting its 90% EV target within three years. Flipkart and Amazon both partnered with Mahindra Electric Mobility Ltd. for tricycles and Hero Electric Vehicles Pvt. for scooters.
Of course, electrification of the delivery fleets also takes time in North America. Amazon has ordered 100,000 electric vans from startup Rivian Automotive Inc., which halted 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. semi-trucks that have not yet started production.
Early moves in EV fleets in India were also plagued by poor designs that couldn’t withstand monsoon rains and notoriously bumpy roads.
When BigBasket started an EV test run in 2017, the replaceable batteries were not completely waterproof and some caught fire in accidents. The vehicles were sometimes empty and had to be hauled back to the depot, and the low-lying battery packs were often submerged in water-filled potholes during the monsoons.
BigBasket has worked with automakers to make fireproof and waterproof replaceable batteries that are tough and durable in harsh work environments, and the vehicles are now equipped with devices to track remaining charge, said KB Nagaraju, chief customer officer at BigBasket.
Financing and a lack of incentives also make electrification of the delivery fleets more difficult. Unsure about the new technology and resale value of electric vehicles in the event of loan defaults, banks are reluctant to lend and then charge higher interest rates, BigBasket’s Nagaraju said.
Meanwhile, a 100 billion rupee incentive program launched in 2019 has not achieved its goals. Only 19,064 tricycles were sold against the target of 500,000 and only 74,634 two-wheelers against the target of 1 million.
“The subsidies currently available are not enough to bridge the price gap between the average internal combustion engine used in commercial fleets and a comparable electric vehicle,” said Allen Tom Abraham, an analyst at BloombergNEF. “Although there are very ambitious goals at the federal and state levels for the use of electric vehicles in India, the sale of electric buses, taxis and light trucks is still pending.”
“Our future is electric vehicles,” he says. “All e-commerce companies, large or small, should use electric vehicles because they are economical and environmentally friendly. Compared to diesel and gasoline cars, they are very low-maintenance and therefore cheaper for us. ”
