Electric 4W goods carriers | A fleet operator’s point of view • EVreporter

EV logistics has emerged as a transformative force in the e-commerce and traditional business sectors. e-Goods Carriers, particularly LCVs with 750 kg to 1-ton payload capacity are a growing segment of vehicles for mid-mile deliveries. They are being adopted by multiple fleet operators serving e-commerce and 3PL companies. You can see a list of e-Goods Carriers in India here.

Ankush Sharma, Co-founder and CEO at Pickkup.io, analyses the ROI of electric LCV usage for fleet operators. Pickkup runs an EV fleet of 75 vehicles in Delhi NCR and Chandigarh Tricity, of which 50+ are electric LCVs. The company targets scaling up the fleet size to 500 EVs by 31 Dec 2025. Some of their B2B clients include Amazon, Zomato, Reliance, Big Basket and Bluedart.

Fleet operators prefer asset light model

It should be noted that most fleet operators do not keep EV assets on their books. Instead, they lease the vehicles from a leasing partner. There are primarily two kinds of operational lease models:

• Regular operational lease

• Operational lease with Battery-as-a-service (Baas)

This analysis is from a fleet operator’s point of view. For this exercise, we take the example of a 1-ton payload electric LCV with a price of INR 12 lakhs.

Regular operational lease model

Monthly expense per vehicle:

• Monthly lease – INR 25,000 per month (for up to 3,000 km). INR 28,000 per month (3,000 to 4,000 km), i.e., an additional lease applies for distances covered beyond 3,000 km.

• Average monthly charging and parking expense – INR 6,000

• Driver salary – INR 20,000

Average monthly expense ~ INR 51,000 or INR 54,000 depending on distance travelled.

Monthly revenue per vehicle:

• Day shift – INR 52,000 (for 3,000 km monthly run). It may increase to INR 58,000 if the vehicle runs up to 4,000 km.

The fleet operator makes INR 1,000 (for 3,000 km) to INR 4,000 monthly per vehicle in one shift.

Many fleet operators look to run an additional morning shift – 3 a.m. to 7 a.m. for perishable item delivery. This adds another INR 20,000-25,000 in additional revenue for the fleet operators, bringing monthly revenue per vehicle to INR 70,000-75,000. After accounting for additional driver expenses of INR 10,000 and charging costs, the average monthly income per vehicle comes to INR 9,000 – INR 10,000.

The fleet companies pay a monthly lease to the leasing partner for a pre-agreed period of 5 to 6 years. At the end of the leasing period, the fleet companies can choose to pay the residual value (pre-agreed) to the leasing partner and transfer the vehicle ownership to their books. The fleet operator expects to make the maximum return on the vehicle after the end of the lease period.

BaaS operational lease model

Monthly expense per vehicle:

In the battery-as-a-service model, the leasing partner separates the cost of the vehicle from the cost of the battery. There are two components of a monthly lease:

• Vehicle lease – INR 18,000 per month for 6 years.

• Battery lease – Average (across OEMs) INR 2 per km for up to the OEM’s battery guarantee distance, which is up to 1,80,000 km. After 1,80,000 km, the battery lease component ends.

This brings the total monthly lease to INR 24,000 for a 3,000 km run. In this case, if you drive more than 3,000 km per month, the fleet operator is not burdened with additional lease cost.

• Average monthly charging and parking expense – INR 6,000

• Driver salary – INR 20,000

Average monthly expense – INR 50,000

Monthly revenue per vehicle:

• Day shift – INR 50,000 – INR 55,000 (for 3,000 km monthly run). It may increase to INR 58,000 if the vehicle runs up to 4,000 km a month.

In this case, the fleet operator makes up to INR 5,000 per vehicle for a 3,000 km run, which will be higher for more distance covered. Add an early morning shift for an additional revenue of INR 20,000 to INR 25,000 per vehicle per month, and the revenue per vehicle goes up to INR 75,000. After accounting for additional driver costs and electricity charges, the average monthly earning per vehicle comes at INR 10,000-12,000, giving a return of 13-15%.

As you drive more, the fleet operator’s income per vehicle rises much faster in a BaaS model than in a regular lease.

Observations and Recommendations

• The industry faces a significant challenge in onboarding individual owner-operators for EVs. Besides the minimum INR 3 lakh difference in the price of ICE and electric vehicles offering the same payload capacities, EVs also attract a higher interest rate on monthly instalments. In addition, managing charging requirements and getting after-sales support from OEMs is much more difficult for individual owners.

• Another major challenge lies with driver training. The OEMs must conduct basic driver induction to help drivers become proficient and confident in using an electric vehicle correctly. In addition, training programs for basic troubleshooting with the vehicle should be conducted for the drivers.

Disclaimer – The numbers used in the article are indicative figures based on market observation and may vary from player to player.

Also read: Light commercial vehicles goods carrier market in India | Upcoming e-LCVs and TCO comparison