Dialogue series(Ep2): Key insights into the Indian truck industry and use cases for electrification

Summary

The panel discussion, organized by the Climate Group, delves into the electrification of medium and heavy-duty vehicles in India, focusing on sectors like cement, food distribution, and e-commerce. Panelists from JSW, EVH, and P Manifold Business Solutions emphasize the need for business cases and policy support to drive the transition to electric vehicles, highlighting pilot projects and the challenges of infrastructure and upfront costs. The conversation underscores the importance of creating success stories to inspire logistics providers and the potential of EVs in reducing emissions.

Takeaways

• 🚩 The panel discussion focused on the transition to electric vehicles (EVs) in the medium and heavy-duty vehicle segments, which contribute significantly to road emissions.
• 🌏 The EV100 campaign was highlighted as an initiative that encourages companies to commit to electric mobility, with an extension to include lower vehicle segments in the future.
• 🏭 Manoj Rustagi from JSW emphasized the cement industry's potential for electrification, with JSW being the first cement company globally to commit to the EV100, EP100, and RE100 initiatives.
• 📦 Java Balasubramanyam from Vekul discussed the need for zero-emission trucks in food distribution, emphasizing the importance of sustainability aligned with business profitability.
• 🛒 Vikrant Vidya from P Manifold Business Solutions talked about the rapid growth of e-commerce and the potential for electrification in parcel and market loads, noting the unique challenges and opportunities in this sector.
• 🚚 The panelists agreed that the electrification of medium and heavy-duty vehicles is in its nascent stage, with significant opportunities for growth and the need for more industry engagement.
• 🔌 Ashwith Seti from EDH raised concerns about the lack of enthusiasm from automotive OEMs for electrifying the medium and heavy-duty vehicle segment, calling for more support and incentives.
• 🔄 The conversation touched on the importance of creating success stories to inspire confidence in fleet operators and logistics providers for the adoption of EVs.
• 💰 Financial viability was a central theme, with discussions on the high upfront costs of EVs and suggestions for government support, such as priority sector lending and reduced interest rates for EV purchases.
• 🔧 Technical challenges were acknowledged, including the need for infrastructure development, such as charging networks, and the current reliance on imported components like batteries.
• 🔄 The panelists called for more pilot projects to establish business cases and use cases for EV adoption in various sectors, emphasizing the need for data-driven decision-making.

Q & A

What is the primary focus of the EV100 campaign?

The EV100 campaign focuses on commitments taken by companies for vehicle segments ranging from around 3.5 tons to around 7.5 tons, aiming to accelerate the transition to electric vehicles (EVs) in these segments.

What percentage of vehicles on Indian roads are medium and heavy-duty vehicles, and what is their contribution to road emissions?

Medium and heavy-duty vehicles constitute 2 percent of the vehicles on Indian roads but contribute to 35 to 45 percent of the emissions on the road.

What are the three use cases identified for the transition to electric vehicles in the script?

The three use cases identified for the transition to electric vehicles are perishable goods, parcel and market, and minerals.

How does the cement industry in India contribute to the overall logistics and what changes are being made?

The cement industry in India dispatches around 360 to 370 million tons annually. JSW, a cement company, has signed up with the Climate Group and is investing in electric vehicles for dedicated fleet use cases, such as transporting clinker and slag.

What is the current state of electrification in the food distribution business according to the script?

The food distribution business is looking to electrify its fleet due to sustainability goals. Currently, 20 percent of the last-mile fleet is electric, with plans to increase this to 40 percent by the end of the year.

What are the challenges faced by the e-commerce sector in transitioning to electric vehicles for parcel and market loads?

The e-commerce sector faces challenges such as the need for faster deliveries, which often require trucks to cover 600-800 kilometers a day, and the unique loading patterns that are voluminous but not heavy.

What is the role of startups like EVH in the electrification of medium and heavy-duty commercial vehicles?

Startups like EVH are working on creating customized electric vehicles for specific use cases and are engaging with state governments and clients to increase payload and infrastructure support for electric vehicles.

What is the potential policy support that could encourage the adoption of electric vehicles in the medium and heavy-duty segment?

Policy support could include bringing electric vehicles under priority sector lending, reducing interest rates for EV financing, and considering subsidies in lending rates or loan tenures to make EVs more financially viable.

How does the script address the issue of upfront costs for electric vehicles?

The script suggests that the high upfront cost of electric vehicles is a barrier for fleet operators. It proposes solutions such as pay-per-use models and OEMs offering vehicles as a service to reduce the initial investment burden.

What is the significance of the replacement cycle of trucks in India for the transition to electric vehicles?

The replacement cycle, which is due in the next five years, presents an opportunity to tap into and promote the adoption of electric vehicles, as the existing stock of trucks will need to be replaced.

How does the script view the role of CNG as a transition fuel for medium and heavy-duty vehicles?

The script suggests that CNG could be an interim solution due to its lower emissions compared to diesel, but it is not considered a final solution. The ultimate goal is the adoption of electric vehicles as a more sustainable option.