India has been lately witnessing a significant increase in partnerships and collaborations among e-commerce, logistics and vehicle leasing companies, and vehicle manufacturers for the electrification of delivery fleet. The latest partnership suggests that the commercial fleet electrification is now a key trend in the Indian market. The tie-up is a positive development and makes a complete strategic sense, especially at a time when the fuel prices and operational costs for ICE two and three-wheelers are on a constant spur.
“The significant growth in e-commerce and delivery businesses in India due to COVID-19 warrants expansion of vehicle fleet for delivery purpose. New companies entering delivery businesses such as food, retail and others need small and cost-effective fleet for last-mile delivery. This has compelled the businesses to closely monitor the cost optimization, fleet utilization and the total ownership cost of the fleet vehicles.
“EVs come out as a strong solution to the concerns of growing ICE vehicle operational costs and the related environmental concerns. EV fleet will ensure a low total cost of ownership, low cost per shipments and increased per day delivery capacity, which also converts into a better bottom-line growth. E-commerce giants Amazon and Flipkart have indicated their commitment towards 100% electric mobility in their logistics fleet and new start-ups such as eBikeGo, Oye! Rickshaw and moEVing are also focusing on complete electric mobility. The growing inclination towards electric cycles, two & three-wheelers indicates that electrification offers a long-term solution for the e-commerce, logistics and related industries, and holds significant potential in India.
Credits: Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData
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