Last week online grocery retailer bigbasket announced an ambitious plan to increase its current fleet of electric vehicles (EVs) to1000 electric vans and 2000 electric bikes in the next one year for its last-mile delivery service across metro cities. While analysts feel it is a smart eco-friendly move by bigbasket to cut down delivery cost, there are infrastructure issues that need to be addressed. The Bengaluru-based company currently has 150 electric vans and 50 bikes.
“Tangible savings and positive contribution to environment are the likely benefits from EVs according to the company. However, before taking this giant leap, issues such as charging infrastructure and bank finance to OEMs [original equipment manufacturers] and small transporters need to be addressed,” said JM Financial analysts Prince Poddar and Swapnil Potdukhe in a report.
“Electric vehicles usage has seen notable trial runs especially from delivery companies such as Zomato, Amazon, Grofers, Blue Dart, among others and is likely to aid government’s efforts to reduce air pollution as well,” according the JM Financial report.
Bigbasket first introduced Mahindra EVs, e-Supro model in 2016 for its last-mile delivery operations in Delhi-NCR. Over the years, bigbasket has worked with multiple e-van OEMs such as Gayam Motors and Euler Motors. In the e-bike space it has worked with players such as Hero, Okinawa, Li-on, and Greaves Cotton. “Through the aggressive push for EVs, bigbasket has been able to lower its delivery costs associated with delivery of products,” the company said in a statement.
K. B. Nagaraju, chief customer experience officer, bigbasket, adds that “though there has been a significant push for EVs in the recent budget, there is a need to address the issue of bank finance to OEMs and small transporters and individual buyers as long as the vehicles are used for commercial transportation.”
Bigbasket is present in 26 cities in India recording about 2.5 lakh orders per day with a registered customer base of 15 million. In May this year, bigbasket raised $150 million in a funding round led by Mirae-Naver, a leading South Korean investment firm, CDC Group, the U.K. government’s development finance institution, and Alibaba Group. With the round, bigbasket’s valuation crossed the $1 billion mark, propelling the eight-year-old e-tailer into the unicorn club — where privately-held startups are valued at $1 billion and above.
Experts point out that EV as a concept has been around in India for sometime now. But the momentum to make it mainstream has picked up serious steam in recent years as issues like global warming, and steps to reduce carbon emissions take centrestage globally. While policymakers across the world are seriously evaluating ways to cut down on usage of fuel-based vehicles, in India usage of electric vehicles across commercial and passenger segments is still at a nascent stage.
In 2010, the government took its first major step by announcing financial incentives for manufacturers of electric vehicles sold in India under a ₹95-crore scheme approved by the Ministry of New and Renewable Energy. Over the past decade, the government has taken various measures to encourage the adoption of electric vehicles. In July, the government lowered the goods and services tax (GST) rate on electric vehicles to 5% from 12% and on electric chargers to 5% from 18% to fuel the growth of electric vehicle usage in the country.
In July, bigbasket’s smaller rival Grofers said that for its last-mile delivery fleet it is looking to deploy 500 electric vehicles (e-vans) by the year end. The online grocery store currently has a fleet of electric vehicles in Delhi-NCR and Jaipur only. It plans to ramp up its EV fleet to other cities by December.
Recently India’s largest e-commerce retailer Flipkart had said that it would replace about 40% of its delivery fleet with electric vehicle vans by March next year. At present Flipkart uses some electric vehicles as part of its delivery fleet in Bengaluru, Hyderabad, and New Delhi.