The global automotive industry is making significant efforts to adopt alternative energy sources. Recent Indian investments will also undergo a paradigm shift in the near future. The Indian electric vehicle market was worth USD 1,434.04 billion in 2021 and is projected to reach USD 15,397.19 billion by 2027, registering a CAGR of 47.09 percent over the forecast period (2022-2027) according to Mordor intelligence. The COVID-19 pandemic had hampered the domestic production of electric vehicles because of the shutdown of manufacturing facilities. As restrictions were loosened, however, EVs experienced optimistic growth as consumers gravitated toward inexpensive eco-friendly transportation supported by government incentives.
Throughout this time, oil imports, rising pollution, and international commitments to combat global environmental changes have been a significant burden. As the popularity of Electric Vehicles (EVs) increases, all nations are adopting them because they are more energy-efficient modes of transportation and on-road delivery. In intra-city transport, last- and middle-mile delivery, the market share of electric vehicles (EVs) continues to grow. On our roads, there will be more electric LCVs, electric bikes, electric cars, and electric three-wheelers.
What makes electric vehicles ideal for the logistics industry?
Lower Cost of Ownership
As the government implements new policies and adopts new technologies within the electric vehicle industry, the TCO (Total Cost of Ownership) of EVs is significantly decreasing. The batteries are treated as a separate entity by the new battery swapping method, and can therefore be owned by energy operators. This is yet another method for reducing the initial cost of EV usage, particularly for the intra-city logistics sector. This will increase the sales of electric vehicles in India.
Environment friendly
Toxic gases are significantly emitted into the atmosphere by ICE road transport. Electric mobility in the logistics sector will play a significant role in addressing the environmental problems caused by ICE vehicles.
Greater Cost Savings on Fuel
Electric vehicles reduce greenhouse gas emissions and operating costs. EVs have emerged as an excellent alternative to internal combustion engine (ICE) vehicles for conserving energy and reducing energy costs in light of the ongoing increase in gasoline prices.
Minimal Maintenance
EVs require less maintenance and service support. The costs associated with oil changes, spark plugs, the fuel tank, the pump, etc., reduce the maintenance requirements. The simple incorporation of new technologies into EVs facilitates the deployment of electric vehicles in the logistics industry.
Cost Savings in Last Mile Logistics
Companies in the supply chain view EVs as more cost-effective alternatives for last-mile logistics. Due to the simple vehicle structure of EVs, current fleet tracking and optimization technologies can be easily integrated. Effective tracking and optimization reduce last-minute logistics costs.
Easier Monitoring and Analysis of Electric Vehicles
For fleet operations, it is simple to track valuable information about EVs and their batteries. Lifecycle, battery health, charging, and discharging information can be monitored with software and sensors in electric vehicle logistics.
Support for Government Programs
The logistics industry contributes the most to greenhouse gas emissions. This necessitates the transition to electric vehicles. With this transformation, the logistics sector saves money on the cost of importing fuel, thereby reducing its import expenses. The central and state governments are continually introducing new initiatives and policies to promote the use of electric vehicles in the logistics industry. By providing subsidies for the purchase of electric vehicles, the Fame India scheme aims to encourage the purchase of EVs. The plan intends to provide charging infrastructure for electric vehicles.
Retrofitting Scope in Intra-City Logistics
In India, a number of states, in consultation with the government, have designed an easier exit strategy for EV businesses. Companies implement retrofitting policies for existing ICE vehicles, such as passenger cars, to prioritize the vehicle segment for EV transition. The goal of the evolving EV conversion system is to provide affordable electric mobility to all segments of society.
Cost-Benefit Analysis (CBA) With Internal Combustion Engine (ICE) Vehicles
Electric two-wheelers, cars, buses, and three-wheelers may have a higher initial cost than their internal combustion engine (ICE) counterparts, but this cost continues to decline and will become much more affordable once economies of scale are achieved. But they contribute to substantial fuel cost savings. In the case of public transportation, a higher daily volume also results in cost savings. This use case will result in the immediate electrification of all types of vehicles, from two-wheelers to buses.
Concentrate On End User and Operator Benefits
With the emergence of asset-light options for intra-city transport vehicles such as three-wheelers, two-wheelers, and LCVs, not only the operator but also the passengers/end users appreciate the total cost savings. By offering simple, worry-free configuration and ownership options, OEMs and EV companies are reducing the complexity and uncertainty of prospective EV buyers.
Simple Registration and Finance at the Municipal Level
Exemption from the issuance and renewal of registration fees is a significant incentive for OEMs and prospective EV buyers. From purchase subsidies to exemptions from road tax and registration fees to low-interest rates on loans, the city has a multitude of viable electrified transportation options.
Conclusion
Fuel-powered vehicles will eventually become obsolete, so we must switch to EVs as soon as possible to ensure the prevalence of EVs and their infrastructure. EVs are the future due to their advantages over conventional vehicles. According to a report from NITI Aayog and the Rocky Mountain Institute, India can save Rs 3.11 lakh crore in fuel costs over the next three decades by adopting a clean and cost-effective mode of freight transportation (RMI).
By implementing these measures, India can reduce its logistics costs by 4 percent of the country's GDP (Gross Domestic Product) and reduce its carbon dioxide emissions by 10 gigatonnes until 2030, according to a report. Currently, logistics accounts for approximately 13 percent of total company costs, making exports uncompetitive in comparison to China.
"It is more important than ever to make India's freight transportation system more cost-effective, efficient, and environmentally friendly, given the importance of freight transportation to India's expanding economy. In order to realize the benefits of existing government initiatives such as Make in India, Aatmanidhar Bharat, and Digital India, efficient freight transport will also be crucial ", said NITI Aayog's Advisor for Transport and Electric Mobility, Sudhendu J. Sinha.
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