Amazon and Flipkart, the online shopping giants, which could be the key to getting more gas-guzzlers off India’s roads, are having trouble finding enough vehicles to satisfy their ambitious target to electrify their delivery fleets.
The nature of online delivery operations, which require short trips from a central hub where a standard charging solution can be built, is well suited to EV adoption, overcoming range anxiety and a lack of charging infrastructure, which has proven to be a barrier to widespread adoption.
According to Flipkart, the Indian landscape hasn’t much from a supply and reliability perspective, or a viable commercial option for EVs which makes it nudge the entire ecosystem and shape it, rather than just being a consumer.
Electric vehicles represent less than 1 percent of yearly car sales in India, compared to roughly 6 percent in China. However, India’s delivery companies are discovering that there are few models that can be deployed at scale, and the supply that is available can’t keep up with demand.
Hero MotoCorp, India’s largest two-wheeler manufacturer, will only have its first electric scooter on the market in March 2022. Tata Motors, which has a top-selling electric passenger car in the Nexon, does not have an electric small commercial vehicle for last-mile deliveries.
As a result, Amazon, Flipkart, and BigBasket, India’s leading grocery store have largely relied on Mahindra & Mahindra’s Treo Zor, a three-wheeled van that costs $3,670 and has delivered around 1,000 units in the five months since deliveries started in November. Every month, Mahindra makes roughly 400 Treo Zor vehicles.
“There aren’t enough quality manufacturers making electric vehicles today. eCommerce companies like Amazon, Flipkart are single-minded about becoming electric but the biggest problem is supply,” said Mr. Olaf Sakkers, general partner and co-founder of venture capital firm RedBlue Capital, which has invested in two Indian EV startups.
By 2025, Amazon aims 10,000 electric vehicles delivering packages in India, while Walmart’s Flipkart plans to deploy more than 25,000 electric vehicles and be fully electric by 2030.
BigBasket, a Tata Group subsidiary, has committed to achieving its 90 percent electric vehicle target within three years. Earlier, BigBasket had partnered with automakers to develop fireproof and waterproof swappable batteries that are reliable and durable in difficult working situations, and vehicles now have devices that track how much charge is remaining.
According to sources, the electrification of delivery fleets is further hampered by a lack of funding and incentives. Banks are hesitant to lend because they are unsure about the new technology and the resale value of EVs in the event of loan defaults, and if they do, they impose higher interest rates.