In a world moving towards sustainability, the supply chain industry is recognizing the importance of efficient transportation, especially for last-mile deliveries. Electric Vehicles (EVs) have emerged as a viable and sustainable solution for this sector. This article explores the reasons behind the supply chain industry's inclination towards EV adoption for last-mile deliveries.
Efficient last-mile delivery is crucial to ensuring a positive customer experience. With the rising demand for fast and sustainable delivery services, EVs have become a crucial link in this aspect. Electric vehicles offer numerous benefits, including no fuel consumption, lower operating costs, and reduced carbon footprint. They are also quieter and emit no harmful pollutants, making them ideal for urban areas concerned about noise and air pollution. Government incentives and subsidies further enhance the viability of switching to EVs for last-mile delivery. Let's examine the reasons driving the supply chain industry's shift towards EV adoption.
Responsibility towards reducing carbon emissions: The increase in last-mile delivery operations has resulted in a surge in carbon emissions and fuel consumption. To address this issue, many supply chain enterprises are embracing greener logistics practices. Adopting EVs for last-mile deliveries represents a significant step towards implementing green logistics in supply chains.
Several prominent companies, such as Amazon, Walmart-owned Flipkart, IKEA, and BigBasket, are already transitioning to electric vehicles for their deliveries. For example, Amazon plans to utilize 100,000 battery-electric delivery vans for prime deliveries and aims to achieve 100% renewable energy usage by 2030. BigBasket aims to expand its fleet of 800 EVs to 4,000-5,000 within the next two years.
Government Incentives: The government's Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme offers subsidies and incentives to promote the adoption of EVs for last-mile deliveries. Various states, including Delhi, Tamil Nadu, Gujarat, and Punjab, actively encourage EV adoption by providing incentives and subsidies. Delhi offers a subsidy of Rs. 30,000 to buyers of electric three-wheelers and light commercial vehicles. Tamil Nadu's policy grants a subsidy of Rs. 40,000 for customers purchasing 3-wheeler EVs, along with exemption from RTO fees. Gujarat provides a subsidy of Rs. 10,000 per kWh to three-wheeled EVs with a maximum battery capacity of 5 kWh. Punjab offers a subsidy of Rs. 10,000 to the first 100,000 EV buyers, and e-rickshaw buyers can receive incentives up to Rs. 30,000.
Business Benefits of using EV’s for last-mile deliveries:
No fuel consumption: Electric vehicles eliminate the need for petrol, CNG, or diesel, resulting in minimal use of hazardous fossil fuels. By utilizing EVs for last-mile deliveries, supply chain enterprises can significantly contribute to a greener world.
Cost-efficient logistics: Transitioning to all-electric last-mile operations reduces operating costs and fuel consumption. Electric cargo vehicles provide substantial economic benefits, resulting in potential savings. For example, Altigreen's neEV costs as low as Rs. 0.92 per km, while alternative fuel vehicles can cost up to Rs. 4.40 per km. This translates to a lifetime saving of Rs. 10 lakh or up to Rs. 7,500 per month. Altigreen's electric three-wheeler cargo vehicle has a range of 151 km on a single charge and can cover 120 km when overloaded.
Easy to maintain: Electric vehicles require less maintenance compared to traditional internal combustion engine (ICE) vehicles. With fewer auto parts, maintenance becomes hassle-free. EVs typically require battery replacement or maintenance every few years and are at least 30% cheaper to service and maintain than ICE vehicles.
Conclusion: The adoption of EVs for last-mile deliveries brings numerous benefits, both environmental and economic. EVs contribute to a lower carbon footprint compared to traditional fuel-powered vehicles, helping reduce greenhouse gas emissions in the transportation sector. Additionally, EVs offer lower operational costs, reduced maintenance requirements, and a more affordable fuel alternative. Businesses in the supply chain industry should consider EVs as a valuable investment for a sustainable future.