The Indian government wants to boost the popularity of electric vehicles (EVs) to bring down the number of fuel vehicles on roads, and delivery fleets of e-commerce companies can play an essential role in this process. E-commerce companies such as BigBasket, Amazon, and Flipkart are working hard to find electric vans so that they can achieve their respective goals of electrifying their delivery fleets.
Olaf Sakkers, partner and co-founder of venture capital firm RedBlue Capital, said, "There aren't enough good manufacturers in India making EVs right now." RedBlue Capital has invested in two Indian electric vehicle startups. He added, "E-commerce companies like Amazon and Flipkart want very much to use electric vehicles for deliveries, but the biggest problem is the lack of supply."
The nature of the online delivery business lends itself well to the use of electric vehicles. Since the delivery distances are not too long, there is no need to worry about the car not having enough range and the lack of charging infrastructure.
However, electric vehicles account for less than 1% of total vehicle sales in India per year. India's e-commerce giants find that there aren't many models available for mass deployment in the market, and the existing supply is not keeping up with demand.
India's largest automaker, Maruti Suzuki, doesn't produce electric vehicles. The company also says that the high cost of developing and producing EVs has resulted in their final selling price being beyond the reach of most Indian consumers.
Hero, India's largest two-wheeler manufacturer, will also have to wait until 2022 to release its first electric scooter.
Tata Motors, on the other hand, has already launched an electric passenger car called the Nexon. Still, the company has not launched a small commercial EV, a model that can be used for deliveries. Girish Wagh, president of the company's commercial vehicle division, said Tata has begun developing a small electric commercial vehicle because of strong potential market demand.
In this case, e-commerce companies such as Amazon, Flipkart, and BigBasket have to rely on Mahindra & Mahindra's Treo Zor model, a three-wheeled van priced at 273,000 rupees (about $3,670), of which the company had sold about 1,000 units since November last year. The company can produce about 400 Treo Zor units a month.
Amazon plans to deploy 10,000 electric delivery vans by 2025, while Walmart's Flipkart previously said it would deploy more than 25,000 all-electric delivery vans by 2030. Tata Group's BigBasket has also pledged to electrify 90 percent of its delivery vehicles over the next three years. Both Flipkart and Amazon have signed three-year partnership agreements with Mahindra Electric Mobility to procure the latter's three-wheeled EVs. They have also partnered with Hero Electric Vehicles to procure its electric scooters.
In addition to India, the electrification of parcel delivery fleets will take some time to complete in North America. Amazon has ordered 100,000 electric vans from EV startup Rivian.
Walmart Canada aims to replace 20 percent of its fleet with electric vehicles by the end of 2022 and has reserved 130 of Tesla Inc.'s Semi electric trucks.
