How is EV contributing to the growth of the Last Mile delivery ecosystem?

The COVID-19 pandemic has changed the lives of billions across the globe in the last few months. Across the globe, companies and businesses are still reeling under its impact. One such industry is last-mile delivery firms as they rush to adapt to this new normal. The last decade saw the promise to bring significant changes in the way things are delivered for the last-mile ecosystem. However, there is a huge likelihood of these changes coming to effect shortly. The adoption of the latest electronic technologies in last-mile delivery has seen steady growth. Thus, it has created a competitive advantage among key players in the last mile space.

Recently, the Government announced that it has set a target of a 30% adoption rate for EVs by 2030. Following this announcement, many companies and startups have taken first steps to ensure it kicks off. The next step will be reassuring the Indian consumer that Electric Vehicles (EVs); they are an alternative to Internal Combustion Engines (ICE) vehicles; perhaps discouraging measures for ICE cars due to taxation. That could lead to the adoption of electric vehicles for public transport. Mostly for taxis, and ride-hailing in all its forms, including buses, cars, and rickshaws.

Considering such government initiatives and recent studies on how global logistics will reach $10.6 trillion by the end of 2020, it has a massive potential for last-mile companies to innovate and tap into the market. Close to two-fifths of the total logistics costs are associated with the last mile. This will urge leading players to come up with newer innovative solutions to move forward.

Increase in EV adoption

Due to this huge demand, increased support from the Government, and untapped market potential, EVs are all-set to become a key part of India’s last-mile delivery ecosystem. However, it does not end there. Companies are now taking notice that EVs are not only environment friendly but also provide a host of benefits. For the start, EVs cost less and facilitate easier operations. EVs can help overcome many inefficiencies in last-mile delivery, including saving a ton on fuel and asset costs. Although the cost of an ICE vehicle maybe lower as of now, EVs are significantly more economical; considering the total cost of ownership over the lifetime of the asset.

Owing to this, delivery channels such as Amazon, Swiggy, and many more are embracing a considerable amount of this technology in their Last Mile ecosystem. Most delivery channels will eventually go electric as a pollution-free solution. Further, many city centres are increasingly banning vehicles with internal combustion engines. It will further benefit the total cost of ownership as battery costs continue to drop and will also enable quieter deliveries.

Moreover, EVs are far less complex and cheaper in the long run when compared to ICE vehicles. They help provide transparency to the organizations vis-a-vis reducing hidden costs as they come loaded with smarter tracking features like battery optimization, efficient routes, etc. Also, it’s much easier to equip EVs with sensors and communication devices (thanks to the default electronic system). This also means that the data recorded from an entire fleet of EVs can be centrally located. Hence, opening new avenues for road analytics, air quality analytics, route optimization, and efficiency for the entire fleet of EVs.

To sum it up...

All things considered, it’s apt to say that logistics powered by EVs make intelligent data-driven last-mile deliveries. Additionally, the growing adoption of EVs for last-mile deliveries will even result in operational savings for logistics firms. It will also help the environment in the long haul. Most EVs will also become highly automated as the technology matures and are likely to get there earlier than passenger vehicles due to lower operating speeds.

The massive increase in deliveries will greatly benefit from the new innovative EV technologies that are transforming the overall last-mile space, namely electrification and autonomous driving. Due to the numerous benefits they provide, EVs will feed further growth and make it possible for new form factors to emerge. Deployed mainly for the last mile, these tech marvels will likely bring about new players, who will disrupt the overall last-mile delivery ecosystem.