Last-Mile Delivery as a Business Opportunity in the EV Industry

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Media, as a platform, is catalysing the growth of B2B and disseminating the use of EVs. It adds to the sensitised rave created by consumers, thereby blazoning the gravity of the situation and the role of EVs. The spiralling media consciousness is enhancing business-to-business (B2B) affinity and advertising ample business opportunities for them to leverage. By engaging in various events and meetings, the media has been proactively covering brainstorming discussions pertaining to the world of EVs.?

The automotive industry is one of the highest revenue-generating industries in the world, which incorporates a wide range of organisations and firms executing activities like planning, designing, manufacturing, marketing, and selling vehicles. The industry has paved a fruitful way for electric vehicles along with budding business opportunities, which are sure to prosper more in the coming future, aided by futuristic and pioneering technologies.

After completing the needful market research and feasibility studies and receiving advisership, a lot of key players are already putting in efforts to avail of and exploit the transpiring options, and produce utilities and services, to maintain a sustained burgeoning in the EV industry. With the augmenting demand for EVs, the B2B segment has huge potential to help realise the required outcome, secure a solid foothold, and spearhead the progression of EVs in India.

Government Promoting Fleet Electrification:

With an unwavering mission to achieve net-zero emissions in the country, India has set its short-term targets for 2030, aiming toward complete electrification of 80% of two-wheelers and three-wheelers, 70% of all commercial cars, 40% of buses, and 30% of private cars.

For an instance, the Delhi government’s EV policy has recently stated that electric light commercial vehicles belonging to L5N and N1 categories will be permitted to ply on nearly 250 roads in Delhi even during restricted hours and in no-entry zones. This proposal by the industry is an ultimate move to derive a competitive advantage for EVs over ICE vehicles. The fiscal and non-fiscal measures by the state governments are sparking the advancement and sales of commercial EVs, thereby making the previously non-existent market flourish.

The Delhi government has even showcased its urge to ask e-commerce companies, food delivery services, and cab aggregators to entirely shift to EVs, to fulfill a 25% share of EVs in total vehicle sales by 2024. Additionally, it is also proposed that dealers and petrol pumps might deny petrol access to vehicles that don’t have a pollution-under-check (PUC) certificate.

In Maharashtra, the state government is likely to approach Amazon, Uber, Walmart's Flipkart, Ola, and food-delivery companies Zomato and Swiggy to go electric.

Last-Mile Deliveries:

The Dialogue and Development Commission (DDC), a Delhi government foundation proposed a road map for the 100% electrification of last-mile delivery service fleets in Delhi by 2030. Owing to the rising fuel prices, it’s an ideal practice for fleet commercialisation to go all-electric.?As the biggest contributor to vehicle emissions, the transportation, and logistics sector plays a pivotal role in helping India accomplish net zero carbon status by 2070.

Currently, the logistics industry in India is spectating a prompt inclination and growth toward EVs. The shift is being driven by technological advancements, innovations, fuel efficiency, and low running costs of EVs, thereby enticing numerous businesses to take on EVs ownership. EVs lead to a significant reduction in overall transport costs for businesses, especially those who engage in daily journeys of up to 100 miles per day. The initial costs can undoubtedly be big budgeted to bear but the overarching benefits that follow, overshadow them, in comparison to the conventional vehicles. EVs undeniably carry with them suppressed embryonic prospects that can be exploited by B2B companies.?

Along with the mushrooming interest in EVs, there’s a conspicuous hype and demand for local and convenience supplies as well. The Covid-19 pandemic majorly stimulated the growth of the e-commerce industry, catalysed by safety norms and measures, rendering facilities like no-contact and quick deliveries. This has further manifested a makeover of the delivery ecosystem, changes in consumer behaviour and last-mile operations, which also required expansion in fleets to meet the demand but without overbearing operational costs. This gap is crucially being met by electric mobility. To provide timely assistance and availability of goods and services, many hypermarkets, and start-ups namely, Zepto, Zomato, Instamart, etc are turning to EVs to fulfill speedy last-mile deliveries. A lot of quick delivery commerce companies have already realised the cost-improvement benefits of EVs.

Presently, the total addressable market (TAM) for quick delivery commerce in India accounts for nearly $45 billion, which reflects a large growth potential. The augmenting preference for online shopping over physical shopping is driving rapid blooming and increasing affinity for EV transition from all corners, B2B segment is most likely to set the revolution of the EV sector for the next 5 years.

Quick commerce companies are putting in vigorous efforts to track demand and collaborate with EV manufacturers to address the required delivery. Original Equipment Manufacturers (OEMs) are striving toward innovation to meet supply chain gaps and scale their production capacity. There must be cohesion between the government and the industry to structure strategic policies for development at all stages of the EV value chain.

Why Electric over Conventional for the quick Commerce Industry?

Apart from being an economically sound and efficient solution for last-mile delivery, EVs are considered advantageous over ICE vehicles for a variety of reasons.

The rental and maintenance costs of EVs like e-scooters, e-bikes, and e-cars are profoundly less in contrast with conventional counterparts. Electric two-wheelers help to cover shorter distances quickly and more efficiently. EVs don’t even require diesel or petrol to keep them functioning, which is another exorbitant expense that is ruled out. Numerous businesses are leveraging the full potential of EVs with low investments and higher returns.

With the rising demand for local supplies, the demand for transportation also escalates. While gas-driven vehicles would imply a large carbon footprint and aggravate air pollution, companies are becoming conscious and opting for greener mobility to eradicate the possible threats and maintain brand goodwill.

In general, cost economics work for EVs when these vehicles are commercially utilised. This is because government subsidies incline towards commercialized vehicles and total cost of ownership (TCO) favours EVs when there is a long travelling of vehicles, offering savings by ruling out petrol, diesel, and high maintenance, thereby making them more feasible and cost-effective.?

Owing to the advantages, various central and state policies, incentives, subsidies, and schemes like Faster Adoption and Manufacturing of Electric Vehicles (FAME I and FAME II), Production Linked Incentive (PLI), and Scrappage policy have also remarkably fostered and persuaded EV adoption by businesses for commercial use.

Promising Future:

According to the management consulting firm Redsheer, the Indian Quick Commerce industry is projected to garner a market size worth $5.5 billion by 2025, 15 times more than the present market size, thereby becoming a global leader. This growth is certain to accelerate the e-commerce industry along with a shift to EVs as a prerequisite to fulfilling these deliveries, helping India move closer to its watershed moment of achieving electric mobility goals.?