As a kid growing up in 1980s I witnessed the beginning of “Instant 2 minutes Maggi” era. When it was first advertised commercially I remember my mother saying “Itni jaldi kis baat kee hai” which means “What’s the hurry for” ?
Fast forward to today’s scenario, now we are seeing marketing campaigns of online grocery deliveries in “30 minutes, 19 minutes, even 10 minutes”. I am not getting into the unending debate of “Itni jaldi kis baat kee hai” for now, but one thing is clear that the last mile delivery market is exploding. With so many options to choose from the urban consumer (read my wife) has been spoilt for options. It has lured the consumers to expect the unexpected delivery times and in the process changing their buying behaviour forever. Today we get food, grocery, medicines & almost every essential item delivered to our doorstep at super speeds which once were just unimaginable.
As per a recent report by IBEF, last mile delivery market in India is expected to reach US$ 6-7 billion by 2024. The overall shipments in the e-commerce sector increased from 817 million in 2018 to 1,364 million shipments in 2021 and is expected to expand > 5,000 million shipments by 2025.” On a lighter note, I feel my better half is contributing to this number to the best of her abilities. To deliver these billions of packages we have millions of delivery personnel driving billions of KMs. Most of the last mile deliveries today are done using two or three wheelers most of which are run by the conventional Internal Combustion Engines (ICE). The good news is, this trend is changing to EVs and changing at a very rapid pace. Thanks to the initiatives by central & state governments through subsidies and regulations for the ecommerce players. Most ecommerce players have already announced their big plans to adopt electric mobility.
These are exciting times when EV OEMs, mobility service providers and even bike sharing companies are coming up with very innovative models to push EV adoption to the gig workers & e-com delivery companies. Like earlier times, now one need not own a vehicle to become a delivery partner. You can just rent an EV & get started: No Capex, no maintenance hassles & no additional fuel costs. All this at lower run costs & in an environmental friendly way.
Similarly even in the passenger segment there is a lot of buzz around green mobility. Many next gen ride hailing companies have taken the plunge to keep 100% of their fleet electric. Not only their unit economics become healthier due to lesser running costs & minimal maintenance expenses, they do get a lot of other benefits in terms of taxes, subsidies and license exemptions. That’s the reason these B2B segments are leading the EV adoption both in 2W & 3W vehicle segments.
Well, it sounds like an unbeatable proposition you may wonder, but it is not all that rosy, atleast as yet. These EVs do come with their own set of challenges which you should understand before you decide to dive in. The major ones being lower range per charge especially for the cheaper EVs, lack of charging stations & a downtime to charge these vehicles unlike the swift Petrol refill we all are used to. The silver lining here is that these challenges are being addresses by the private as well as public initiatives. We see huge work happening on the charging infra front both for fixed battery chargers as well as for Swap battery options. Also we see most of the big Automotive brands investing huge energies, efforts and capital in R&D to address these issues. We are at a cusp where the transition to electric looks inevitable, now it’s just a question of “when rather than if”.
The last-mile is the ideal use case for electric adoption due to several advantages as listed below:
- EV mobility attracts a comparatively lower total cost of ownership as more kilometres are driven per day.
- EVs have lesser tendency of mechanical failures & maintenance issues due to fewer moving parts.
- Range anxiety is minimal as the trips are shorter & predictable.
- The environment benefits too with Zero emissions & no sound pollution.
Working towards a “Net Zero” is something all our major corporates are talking about and working on. It makes complete commercial as well social sense to switch to EVs and create a responsible & sustainable brand. Even as end consumers, valuing & using the greener brands is the minimum we could do. So remember to choose the greener option, next time you are booking a ride or ordering from your favourite e-commerce platform. As they say “Every drop counts, every drop of efforts lost delays our ocean of success.