How is the electric carrier segment in the Indian market evolving in the light of the Covid-19 pandemic? What’s the future potential of growth in this segment?
India is slowly but steadily adopting electric mobility. The two-wheelers and three-wheelers segments are witnessing major electric vehicle penetration, compared to the passenger vehicle or MHCV segments. While the last-mile mobility has seen a greater application of electric carriers in the last couple of years in terms of ferrying passengers, the Covid-19 pandemic has played a vital role in accelerating the growth in the e-commerce segment with the surging demand for home delivery of goods, which is also seeing a growing number of electric carriers.
Overall, the last mile delivery segment is witnessing the increasing penetration of electric carriers in terms of both passenger ferrying and delivering of goods. With the second wave of the Covid-19 pandemic raging across the country, how the electric carrier segment is being disrupted, what is the future potential of this category, explains Amitabh Saran- Founder and CEO of Altigreen Propulsion Labs in interaction with Autofintechs. Saran also talks about the pandemic impact on Altigreen’s business, its product, and business expansion strategy for FY2022.
Edited excerpts below.
Niti Aayog claimed that e-commerce has been growing at 53% CAGR, which requires a lot of delivery vehicles.
Q. Last mile mobility has got a shot in the arm due to the pandemic, with the e-commerce platforms registering a surge in business. How this trend has helped Altigreen and the overall electric carrier sector?
In a recent article, the Niti Aayog claimed that e-commerce has been growing at a whopping 53% CAGR! Needless to say, this growth requires lots of delivery vehicles. The larger, global e-commerce players are using this opportunity to lower their carbon footprint and are adding more EV delivery vans through their logistics partners. Altigreen’s vehicle has been designed specifically for last-mile logistics and has been engineered ruggedly to perform in the harsh environmental conditions of India. We have seen good traction from several logistics companies.
Q. With the second wave of the Covid-19 pandemic, lockdowns, and restrictions impacting every sphere of life, what is the impact on the electric carrier segment? What’s the impact on Altigreen?
Covid-19 has had a steady and positive impact on e-commerce. Shopping, as a social experience, has taken a back seat. E-commerce rise equates to rise in last-mile logistics vehicles. Further, companies are under pressure to manage costs so that customer prices do not increase in a market that is suffering from negative sentiment. Since transportation costs account for at least 5% of the total sales amount, all retailers are looking to reduce it, while keeping very tight delivery schedules. EVs help them in both areas. Altigreen’s vehicle has been designed specifically for last-mile logistics and has been engineered ruggedly to perform in the harsh environmental conditions of India. We have seen good traction from several logistics companies.
Electric delivery vans can be easily modified to carry Covid-19 vaccines.
Q. The electric carriers meant for last-mile delivery can play a key role in delivering vaccines to places where large vehicles can’t reach. This would serve the purpose of pollution reduction as well. Do you see any measure by the industry stakeholders towards this strategy?
EV delivery vans can be easily modified to carry cold-chain containers, very efficiently. As the Covid-19 vaccines spread across the length & breadth of India, we will need rugged, yet nimble, vehicles to reach the remotest of villages. These vehicles would need to be non-polluting, with minimum vibration through their payloads. EVs are best suited for such applications – especially if they are designed primarily for it.
Q. What is the product strategy of Altigreen in FY2022?
Altigreen’s vision is simple – Carbon-Free Transportation. We have chosen to focus on the Last Mile Transportation segment as our entry strategy/focus because we believe that this segment will follow the path of electrification due to the 80% operational savings compared to diesel; and the higher earnings as a result of predictive maintenance through always-on, over-the-air telematics. Our first product is the Neev Cargo delivery van, which comes in multiple variants. This will be followed by more products in 2022, all in last-mile transport only!
Altigreen already have RTO approvals in over 12 states.
Q. If you can put some light on the business expansion strategy of Altigreen in this financial year.
While our customers are B2B fleets catering to logistics for e-commerce and FMCG goods delivery, it is clear that Altigreen wants to have a pan-India presence. We already have RTO approvals in over 12 states, and our service/spares presence there is increasing by the day. We will continue to build relationships with regional players & ecosystems who are passionate about EVs and see that as the “only” future for transportation.
Q. For sustainable growth in e-mobility there is a requirement for steady EV charging infrastructure. How do you see the segment shaping up in India? What’s the current status?
It is abundantly clear that public charging infrastructure will be required to drive customer confidence, similar to the petrol stations on highways and inner-city roads. Chargers for passenger vehicles and large format vehicles are expensive, to cater to faster turn-around times. At Altigreen, we could either wait till such public infra was made available or focus on segments that used smaller format vehicles. We chose the latter but built vehicles capable of driving range more than their current diesel variants. Plus, fast enough chargers that work on the ubiquitous 220V sockets available across India, and give a full-day charge in three and a half hours!
Going forward, the Govt of India is encouraging the setup of public charging stations through tenders and subsidies. Many startups and large organizations including the Power Grid Corporation have come forward with detailed plans for rollout. UPI-based non-contact modes of payment integrated with chargers will further enhance their use, much like mobile wallets accelerated the adoption of shared/taxis.