Electric Vehicles – Supercharging Transportation Infra - Users' Perspective - Part 2

What seemed like a distant dream until the recent past has become the reality of new age transportation. With the government’s stronger and concerted thrust on going green & clean, the emphasis on the deployment of electric vehicles in transportation has witnessed a renaissance of sorts. Right from the Central Government to respective state governments, everyone is rolling out red carpet for EV manufacturers and are subsidizing user companies who are fast embracing the change. Fast transforming the EV landscape are the e-commerce companies who have already started walking the talk and have made envious partnerships with EV manufacturers for the fast and successful roll-out of EVs for last mile delivery. The indicative developments look impressive with FMCG and other sectors fast joining the race.

Part 1 of this Cover Story tracks the development of the fast-changing EV landscape and offers you insights from the MAKERS. Read it here - https://www.supplychaintribe.com/article/electric-vehicles-last-mile-delivery-part-1

The following Part 2 covers the USERS' PERSPECTIVE of Electric Mobility for Last Mile.

USERS’ PERSPECTIVES

How do you view the EV landscape shaping up in the country?

Samrat Sehgal, Head – Supply Chain, Dabur India Ltd.: While the EV space is still at a nascent stage in India, it is developing at a fast pace. While, on the one hand, there are many OEMs like old auto companies working on EV development in the country, at the same time there are start-ups entering this area. Companies are also working with customers in putting a lot of R&D to improve the models. We, at Dabur, are committed to move ahead with early adoption of these green vehicles in our supply chain for last-mile distribution.

Transportation is one of the major pillars of the FMCG industry with hundreds of vehicles being used for distributing everyday-use products across the length and breadth of the country. Vehicular emissions are one of the largest contributors to pollution and EVs are the future to not just keep pollution levels in check but also reduce our carbon footprint, as a nation. It is a matter of great pride for Dabur to take the lead in driving low emissions transportation in the FMCG industry.

Dharashree Panda, Director,Sustainability, Flipkart: The electric vehicle adoption has accelerated over the last few years due to concerted efforts from the industry, government and the ecosystem partners along with greater innovation and interest in the space. From initiatives such as Faster Adoption and Manufacturing of Electric Vehicles (FAME I, II), EV policies rolled out by several states to commitment from various manufacturers and large retailers, these initiatives have helped in driving interest and adoption for both commercial and passenger electric vehicles.

E-commerce, particularly, has taken the lead in the transition to electric vehicles through the creation of a green supply chain which will play a significant role in making inroads into the farthest corners of the country for EVs. The commitment by various e-commerce companies in India is helping build an ecosystem for EVs, allowing for greater innovation and reducing costs, thereby positively impacting the industry. The transition to EVs will also help make a significant dent on carbon emissions while contributing to India’s efforts towards reducing its carbon footprint by half in the next decade.

Dr. Arunachalam: We are in the right direction towards faster adoption of EV mobility. When the initial plans were proposed for EVs through the NEMMP (National Electric Mobility Mission 2020), there were certainly apprehensions on how the policy shall resonate with the masses, but FAME-1 & 2 (Faster Adoption and Manufacturing of Electric vehicles) made certain all such apprehensions are addressed. The country now feels ripe for EV adoption with a growing need for mobility. The three main elements that are driving this landscape is the increased demand for EV vehicles both for goods and passenger travel, Supply cost efficiency, and the right ecosystem framework supported by businesses and respective Central and State government. At IBOB, we are steadily promoting EVs to our customers and to be honest, the response has been very forthcoming.

Anjalli Ravi Kumar, Chief Sustainability Officer, Zomato: The EV landscape is very nascent at the moment, though we do believe with the government's push to strengthen the much needed infrastructure support, and development of safety protocols and demand incentives – it's all moving in the right direction.

How are you working on its EV fleet and what are the strategies in place?

Samrat Sehgal: Dabur India Ltd has announced plans to induct a fleet of 100 Electric Vehicles in its supply chain for last-mile product distribution within this year. This would make Dabur the first domestic consumer goods company to have a fleet of electric vehicles for distribution, helping the company move closer to its mission of achieving Carbon Neutrality in its Operations. The first batch of the new Electric Vehicles has been inducted into its fleet in all regions and have commenced deliveries across key cities in the country. All the 100 vehicles would be inducted within the next 12 months across the nation.

We have a three-pronged strategy, wherein we are working with OEMs and participating in the Beta version trials of these vehicles. Our partners are also deploying fleet directly by buying already available models. Besides, we are partnering with aggregators who are offering such vehicles.

Dharashree Panda: According to a report by the World Business Council  for Sustainable Development (WBCSD) titled ‘Advancing electrification of e-commerce deliveries in India’, a 100% adoption of EVs in e-commerce deliveries in India by 2030 could avoid 44% of the total CO2 emissions caused by their conventional vehicle counterparts and reduce consumption of 30 billion litres of fossil fuels per year. As a responsible corporate citizen, Flipkart understands the importance of adopting EVs in its vast supply chain and has initiated various measures to increase its adoption across the value chain.

Our journey towards electrification began in 2017 with pilot projects in major Indian cities, first with electric bikes (e-bikes) and subsequently with electric vans (e-vans). The pilot phase has had its challenges and learnings, but it gave Flipkart the confidence to commit to an ambitious EV100 target. Flipkart understands the relevance of electric mobility in achieving both business and sustainability goals and is committed to paving the way for greater adoption of EVs across the country.

Flipkart is one of the first e-commerce companies in India to commit to transitioning to 100% electric vehicle (EV) fleets by 2030 and has signed up with the Global EV 100 initiative. The company is well-positioned to boost EV adoption across the country including tier-2 cities and beyond, by working with ecosystem partners to deploy 25,000+ EV fleets by 2030.

To achieve the milestone, Flipkart is working with several startups and national OEMs and ecosystem players to co-develop electric vehicles for e-commerce deliveries. Currently, Flipkart has more than 2,000 + EVs in its logistics fleet and has already deployed EVs in multiple locations across cities including Delhi, Bangalore, Hyderabad, Kolkata, Bhubaneswar, Guwahati, and Pune, to name a few. The electric fleet includes 2-wheeler, 3-wheeler, and 4-wheeler vehicles designed and assembled in India, helping boost local innovation and economy.

Dr. Arunachalam: As we advent into revamping our fleet operations, the initial focus has been on focussing EV mobility for our Last mile operations. The product range currently suits our various E-commerce and retail customers, delivering within the B2B and B2C segments proportionately. The next step is to enhance relationships with business models that promote battery leasing, battery swapping, charging infrastructure, and smart grid solutions. There is also a lot of focus on connecting existing software systems from warehouses, route scheduling, workforce management, and others to the central charging infrastructure software, this shall develop a holistic Return to Investment ratio and will keep the sentiments positive.

Anjalli Ravi Kumar: We are locking in supply through strategic partnerships with players like JioBP, Zypp, Yulu, etc., for the delivery partners that engage with our platform. Once we establish reliable supply availability, we work on demand generation by pitching benefits of EV to delivery partners.

What are the tangible benefits you foresee as far as enhancing sustainable expanse is concerned?

Samrat Sehgal: As a Responsible Corporate Citizen, Dabur is recognized for its commitment towards environment sustainability. In line with the Government of India’s focus on safeguarding the environment and promoting a greener India, Dabur has taken the lead in engaging electric vehicles in our operations to replace fossil fuel-powered vehicles, thereby reducing emissions and protecting the environment. Electric Vehicles are an ideal solution to replace conventional fuel vehicles since they are energy-efficient, green and environment friendly. I am confident that this move will also help us propagate the use of electric vehicles even in the hinterland, helping India achieve its Green Energy Mission faster.

Dharashree Panda: Transitioning to EV is a part of Flipkart Group’s larger vision towards sustainability for the organization and for the ecosystem and has taken numerous measures for its seamless integration into the group’s supply chain. Today, we have over 2,000 vehicles playing across our various supply chains bringing efficiencies across the value chain. While helping reduce our carbon footprint, EVs offer advantages such as a reduction in noise and onroad vehicular pollution, reduced cost of operations in the long run and driving inclusivity for riders since these vehicles are usually less difficult to manoeuvre.

Dr. Arunachalam: It is too early to grasp tangible benefits. As a society and as an organization, we must be realistic about the transformation we are undergoing. Five years ago, it was unrealistic to ascertain that we would be doing Last mile deliveries via an Electric Commercial vehicle, today we can boast that approx. 10% of our fleet is EV in a few of the operations and there is a thunderous demand from all customers to initiate at the earliest. Considering EVs aren’t restrained by restrictive movement timings unlike ICE vehicles, it helps in easing deliveries with reasonable Turn Around times. Although, as the demand picks up and the technology enhances, we are certain the cost for per Km run, or Per Kg movement shall see a dip by approx. 25-30%. Plus, the environmental benefits are unparalleled.

Anjalli Ravi Kumar: We are cognizant that the benefits of a sustainable business far outweigh the cost of transition. Transitioning to EVs for instance, will not only have environmental benefits, but will also reduce delivery costs with time owing to the fluctuating fuel prices. We also believe that EV bikes and low-speed scooters will enable the participation and improve productivity of diverse segments - such as women and existing cycle owners - in the mobility economy. This is because E-bikes and low-speed scooters do not require a license and e-bikes, in particular, have a pedal assist option which reduces the manual effort required.

Are there any challenges that you can comprehend in your journey towards deploying sustainable movement of goods across the length & breadth of the country? If yes, how do you plan to circumvent them?

Samrat Sehgal: While there are many OEMs like old auto companies and some start-ups have also entered this area, most of the EV models existing today are in various phases of testing or are facing customers for the first time. Their load carrying capacity is the biggest challenge. Also, the non-availability of battery charging facility across the nation is another issue, besides temperature sensitivity. The cost of EVs itself has to come down as today it is prohibitively higher than the traditional vehicles.

Dharashree Panda: As an e-commerce marketplace, Flipkart delivers millions of shipments every month to over 400 million customers across the country. From the jungles of Gir in Gujarat to 5,000 feet above sea level in Silliguri, West Bengal, Flipkart through its supply chain arm eKart fulfils customers’ requirements, creating numerous opportunities for supply chain ecosystem players, particularly transportation partners. To electrify such a large fleet of vehicles, catering to the needs of the customers across the country, it requires a concerted efforts from the ecosystem partners and commitment on the table to be able to bring about this change.

However, there were few pertinent problem statements such as vehicle availability and deployment, optimal fleet ownership models and charging infrastructure ownership and utilisation, which needed to be solved to be able to scale this initiative. Flipkart worked with ecosystem partners to co-develop electric vehicles to suit the needs of an e-commerce supply chain. Secondly, the absence of long-term contracts impedes visibility on returns for vendors and managing multiple small-scale EV vendors across states remains a concern for e-commerce firms. Additionally, limited vendors in tier-2 and tier-3 cities in India limit the scale.

To overcome these challenges, Flipkart focused on supporting local EV vendors to initiate early adoption and gain on-ground experience. As e-commerce as an industry operates on variable contracting, Flipkart was able to provide assurance of assured number of vehicles to its partners and increase adoption across the workforce by training and educating its riders on the advantages of riding EVs. Through concerted efforts by Flipkart and the ecosystem partners, the company was able to overcome several challenges to successfully deploy EVs across its supply chain.

Dr. Arunachalam: The e-cargo mobility sector is still nascent, there have been strides in the Small Commercial vehicle segment up to 1-1.5 MT, however, the mid-mile and long-haul movements still require the right product and the right infrastructure. As a service provider, we do feel that the demand for EV products is good and as the industry evolves, we shall be ready to support it in terms of delivery and performance. At IBOB, we are working with various Policy experts and Planners to be able to align with the newest technological products and scope their use-case benefits to our various customers.

Anjalli Ravi Kumar: When it comes to last mile delivery, the challenges in deploying EVs are as follows:

• Ownership/High switching costs: We don’t own fleets. The delivery partners own or rent their vehicles directly, which they use for dual purpose - personal and to earn supplemental income through gig engagements. Their vehicles are their assets, viable for 10-15 years - so transition to EVs isn’t appealing to them on an immediate basis.
• Range anxiety: Delivery partners are not confident around the distances they can travel with full battery and worry about the scooter going out of charge mid delivery
• Nascent ecosystem: The availability of rental EVs is limited, which puts hard limits on immediate scale up. There is also limited charging & swapping infrastructure - distance range of EVs is relatively limited, and there currently isn’t sufficient infra to charge & swap.
• High price point: There is a vibrant second-hand market for petrol bikes, which are substantially cheaper than EVs
• Fear of usage: The news about electric vehicles catching fire has created doubts in the minds of delivery partners.

How critical are supply chain and transportation pillars in the way of achieving carbon neutrality vision that you have set out for your company?

Samrat Sehgal: The supply chain and transportation are the most important pillars in Dabur's Vision to achieve carbon neutrality. EV adoption will be critical and hence we have decided to be among the first movers while the market is still in a nascent stage. We understand this and have set a clear and aggressive roadmap for ourselves. Our participation in the developmental journey of EVs even at a certain cost will be our service to the nation and mankind. A strong Environment strategy not only enhances the brand reputation but will also play a key role in building consumer loyalty. Every action at Dabur is a step towards a sustainable and healthy future. This is one more step forward in this direction.

Dharashree Panda: As one of the first e-commerce companies in India to join the Climate Group’s EV100 campaign and commit to responsible sourcing, we are proud to have taken audacious steps across the board towards achieving our sustainability vision. Supply chain forms the backbone of e-commerce, delivering millions of shipments to customers across the country and hence becomes an extremely important element in Flipkart’s sustainability journey. Our collaboration with the Climate Group’s EV100 initiative, to transition 100% of our supply chain fleet to EVs by 2030 is a testament to our commitment to longterm sustainability across value chains.

We see tremendous growth opportunities in electric freight mobility from a greener supply chain perspective, which will play a key role in building a robust supply chain for the future. These efforts will help us meaningfully contribute towards electric mobility by reducing our dependence on internal combustion engine-led vehicles while bringing cost efficiencies for the ecosystem in the long run.

Dr. Arunachalam: As we know, carbon neutrality vision isn’t just about IBOB or the Customers of IBOB, this is a global pledge, and every country and every business is trying to play its part. We can set things right for our future generations. Just to give you a perspective, 100% EV adoption just within the Indian e-commerce domain, could prevent 44% of total CO2 emissions caused by equivalent ICE variants which is equivalent to 76 million tons of CO2 emission per year, reduce the consumption of fossil fuels by 32 billion liters per year. We are grateful that we are going to be part of this change, to be able to redraw the future for us and our future generations.

Anjalli Ravi Kumar: Over 95% of Zomato’s emissions are classified as Scope 3 and within that category, Packaging and Transportation are the main sources of emissions. Electrifying our fleet can help us reduce our emissions from delivery operations by an estimated 27%, which implies transportation is a significant contributor to our vision of sustainable growth.