Changing mobility: Ashok Leyland and DHL bet on electric vehicles

Changing mobility: Ashok Leyland and DHL bet on electric vehicles

Wednesday October 19, 2016,

3 min Read

The Indian electric vehicle market just got interesting with Ashok Leyland, the commercial vehicles manufacturer, launching an electric bus called the Circuit. Now, this is quite a move for an Indian manufacturer considering that, until now, only Mahindra & Mahindra have electric vehicle platforms for both commercial and passenger vehicles. What is even more significant is the fact that this is the first time that someone has made an electric bus in the country. It seats 31 passengers and runs for 120 kilometers, with a top speed of 75 km per hour.



On the other side of the globe, in Europe, logistics company DHL is building its own electric vans - called street scooters - for last mile delivery. The logistics major had in 2014 acquired a company called StreetScooters, which was building affordable electric vehicle solutions on smaller vans to commute over short distances. DHL is adding 100 such vehicles to boost their last mile solutions in smaller towns and streets across Europe. This is changing the nature of the game, especially when you see a logistics company making electric vehicles.

According to the International Energy Agency, about 1.2 million EVs were sold last year. This year, it is estimated that the market will grow by 35 percent.

Now, here is why this is significant

Zero emissions apart, these platforms will become popular short term commute and delivery options. India is a $10 billion e-commerce market, and it uses delivery assets that use fossil fuels. With startups lIke Tork, Greendzine and Volta making electric vehicles affordable, delivery boys can use electric vehicles in suburbs. If one were to look at the likes of Amazon and its Kirana Now programme, one would see that they make the kirana a warehouse. The kirana makes deliveries and gains extra money in the process. An average kirana store earns at least Rs 700 per day making kirana deliveries in a 10 kilometer radius.

"These commute systems will change the way India functions. But the problem is that there is no infrastructure and no systems thinking to create an ecosystem," says V Balakrishnan, founder of Exfinity Ventures.

Of course, petrol prices in India today are subsidised and electric vehicles are not. But the total cost of ownership of an electric vehicle is lower for an over five-year period when compared to a vehicle running on fuel. Analysts estimate the cost to run an electric car to be less than 30 paise per kilometer, whereas a petrol car would cost close to a rupee.

"We need an ecosystem to foster this nascent industry. The opportunities to build connected mobility and electric vehicles in India are immense. But it will need support from the government and corporates," says Chetan Maini, founder of the electric car company Reva, which is now Mahindra Reva after the company's acquisition in 2010.

You may soon see the likes of Amazon India invest in electric vehicles solutions. But these plans are some time away yet. However, it is indeed great to see that even large Indian corporates are now betting on electric vehicles.