The expansion of electric vehicles in the logistics industry
India has witnessed substantial economic growth over the past two decades, propelling it to become the world’s fifth-largest economy by 2023. This remarkable growth has resulted in increased energy demands across transportation, industry, and agriculture, contributing to a 142 percent rise in carbon emissions during the same period. Urbanization has further intensified per capita consumption of goods and services, consequently raising per capita emissions by 93 percent from 2003 to 2022, primarily due to the production and transportation of these goods and services.
The boom of the Indian e-commerce sector has been a driving force behind the nation’s economic expansion and the associated surge in emissions. In the fiscal year 2023, India dispatched over 4 billion packages, including those managed by in-house logistics and third-party providers. Projections indicate a tenfold increase in parcel deliveries, reaching 40 billion per year by 2030, with potential carbon emissions reaching as high as 8 million tonnes. Research also reveals that India’s last-mile emissions per delivery (285 gCO2) significantly surpass the global weighted average (204 gCO2). Notably, five major Indian cities—Delhi, Mumbai, Kolkata, Bangalore, and Chennai—exhibit higher CO2 emissions in their last-mile deliveries than entire logistics sectors in countries such as France and Canada.
Recognizing the need for cleaner and more affordable transportation solutions, a shift towards electric vehicle fleets for last-mile delivery emerges as a viable option. Electrifying these vehicles is expected to reduce emissions by 1.5 million tonnes annually by 2025, equivalent to taking 300,000 cars off the road. Furthermore, a potential 14 percent reduction in carbon emissions by 2030 can be achieved through the full electrification of the small commercial vehicle segment, particularly three-wheelers (3W). Government initiatives like the National Electric Mobility Mission Plan (launched in 2013) and the FAME II scheme (launched in 2019) have already set India on this path.
The push for electrification has spurred economic growth and innovation in various areas, including battery technology, charging infrastructure, and digital logistics platforms. However, the adoption of Electric Vehicles (EVs) in the 3W segment has faced hurdles such as high upfront costs, inadequate charging infrastructure, and limited consumer awareness. The viability of last-mile logistics depends on vehicle utilization. Similarly, setting up a successful EV charging network hinges on serving more EVs efficiently. Underutilization has hindered the realization of EV benefits, affecting the scalability and profitability of charging networks.
One significant obstacle to the adoption of electric 3Ws in logistics is the extended charging time. Last-mile logistics operators typically cover an average of 150 km in a day, whereas EVs equipped with large battery packs can realistically achieve a range of only 100 km on a single charge. This compels logistics providers to deploy two vehicles to cover the required distance, thereby raising operational costs. Additionally, EV fleet operators incur parking charges during the extended charging periods, lasting three to five hours.
To alleviate charging concerns, vehicle manufacturers often install larger battery packs, which, in turn, increase vehicle prices and make them less attractive to service providers and fleet operators. Another challenge arises from the limited battery life of commercial 3W EVs, which provide 1,500 charges and experience 30 percent battery degradation. Battery degradation results from charging, and compatibility issues between batteries and chargers from different manufacturers further exacerbate the problem. The energy source for EVs has a direct impact on vehicle performance, making collaboration between EV charging providers and battery manufacturers crucial.
Exponent Energy’s innovative rapid charging solution for commercial EVs
Exponent Energy addresses the challenges of long charging times, short battery life, and high operational costs for commercial vehicles. As a full-stack energy company, Exponent develops battery packs (e^pack) and charging stations (e^pump) designed to provide a 0 percent to 100 percent charge within 15 minutes, with a 3,000-cycle life warranty using standard Lithium-ion cells.
Collaborating with vehicle manufacturers, Exponent integrates the e^pack into existing vehicles, creating a 15-minute rapid charging variant and establishing a charging network with e^pumps in various cities. Notably, Exponent has partnered with Altigreen Propulsion Labs to introduce the world’s fastest-charging 3W, named the neEV Tez, featuring an 8.2kWh battery pack that is 30 percent smaller than the standard variant. This smaller, long-lasting battery pack, with a five-year financing option, makes EVs more affordable, reducing costs by 30 percent.
Through partnerships with last-mile logistics companies like Magenta Mobility and FYN Mobility, Exponent has deployed over 300 EVs equipped with its proprietary e^pack, covering over 2 million kilometers on the road. Over 40,000 rapid charging sessions have been completed across a network of 30 e^pumps in Bengaluru. While currently operating in Bengaluru, Exponent has plans to expand to five more cities in India by the end of fiscal year 2023.
Key challenge in the electric vehicle ecosystem
The transition to electric vehicles has transformed the energy landscape within the automotive industry. Unlike traditional Internal Combustion Engines (ICE) in petrol vehicles, where energy companies had minimal impact on vehicle performance, EVs involve complex battery packs and high-power charging stations. The manner in which chargers deliver power significantly influences the vehicle’s lifespan and performance, with batteries representing approximately 50 percent of an EV’s cost. This presents a dual-sided challenge in transferring energy within EVs, necessitating a unique approach.
Exponent’s journey to solving this challenge required building a company with a distinctive DNA that combines advanced R&D and engineering capabilities with business acumen. Achieving a seamless charging experience for customers, potentially twice daily, has proven to be a formidable task.
Recommendations for key stakeholders
The government has made significant strides in promoting EV adoption through schemes like the Production Linked Incentive Scheme (PLI) and the FAME scheme, which incentivize consumers to purchase EVs. The introduction of AIS-156 standards further encourages EV manufacturers to follow best practices in vehicle development, leading to higher-quality EVs on the road.
To accelerate the electrification process, a promising policy move could involve implementing performance-linked incentives for charging infrastructure providers based on their energy throughput. This approach would financially reward charging networks that consistently sell energy, fostering the growth of a robust and high-performing charging infrastructure.
The path forward
As Exponent expands its solution to additional cities, the company intends to continue partnering with various vehicle manufacturers to integrate the e^pack and develop multiple 15-minute rapid charging variants. The goal is to establish a dense e^pump network in every city entered, with an e^pump every 2 kilometers. With the increasing demand for EVs in India’s logistics sector and the promising outlook for sustainable mobility, Exponent aims to deploy a sufficient number of Exponent-powered EVs to build an efficient, widely utilized, and profitable charging network.
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