Electrification has been at the center of this transition. Integrating electric or hybrid electric vehicles into the fleet portfolio helps address sustainability and meet environmental goals.
There has been an increasing movement towards sustainable fleet management over the past few years, especially for organizations that require large fleet operations. Fleet managers are now required to optimize their fleet to meet sustainability targets as part of the ISO:14001 standards, sustainability, or their Corporate Social Responsibility (CSR) programs.
Electrification has been at the center of this transition. Integrating electric or hybrid electric vehicles into the fleet portfolio helps address sustainability and meet environmental goals. As environmental regulations will only become mandatory in the years to come, many fleet companies recognize that a staged procurement strategy will enable them to support efficient operations and business continuity. However, many other trends are pushing for fleet electrification. Let’s discuss a few:
The growing eCommerce industry
In 2018, India was the world’s fastest-growing and 3rd largest commercial vehicle market. Much of the country’s population falls into the working category, which provides a hospitable environment for investment and production output. The middle class is increasing the demand for commodity and consumption goods. Therefore, eCommerce has emerged as a key segment in the logistics industry, with the involvement of multinational companies competing to capitalize on opportunities in the country. This means that there will be an increase in demand for companies to upgrade their logistical fleet.
As battery costs fall, the EV price tag will continue to drop
With technology moving forward at lightning speed, improvements in battery technology have become a constant. Manufacturers have greatly changed the chemistry of their batteries. One such advancement is a move away from cathode chemistries that are dependent on cobalt, toward nickel-based systems. At around $33,000 for a metric ton, cobalt is the most expensive element in any lithium-ion battery. Comparatively, nickel-based cathodes benefit from a higher energy density, longer life cycle, and a lower cost than cobalt-based cells, which will drop the overall cost of EVs.
Industrial policies supporting battery development
Governments across the globe have begun to recognize the strategic importance of supporting battery manufacturing for the EV sector since this technology will be centered on a large-scale to help transition their domestic energy supplies to renewable ones. There has even been an increase in policy support for the development of EV battery manufacturing capacity and promoting faster adoption of electric vehicles, contributing towards lower costs.
Increasing production capacity
Battery manufacturing plants are growing in size gradually and moving towards mega plant operations, significantly reducing the cost per battery unit by introducing economies of scale. While a couple of years ago, most battery plants ranged anywhere from 3 to 8 GWh/year, several plants exceeding 20 GWh/year are now coming into play. Experts predict that there will be more developments in this regard in the near future.
The benefits of going green
The transportation sector accounts for a major part of greenhouse gas (GHG) emissions. For this reason, many logistic and parcel delivery organizations such as Amazon, Flipkart, BigBasket, Zomato and Swiggy now recognize the important role that they play in minimizing the harmful effects of climate change.
The benefits of creating an EV fleet reduce pollution and affect the AQI greatly, which is why the concept has gained so much traction in India. Plus, the bottom line of sustainability is interlinked in a way, where a saving that benefits the environment or society should also benefit a company’s financial bottom line, or at least be cost-neutral. This ensures that sustainable practices are endured and built into the company’s culture.
All in all, thanks to government initiatives, a strong supplier ecosystem, and innovative last-mile delivery & shared mobility companies, India is poised to emerge as a leader in fleet electrification. This development is also due to the numerous benefits an electric fleet provides. Both indigenous and foreign participants will steer technological and digital transformations needed to help fleet electrification gain footing within our nation.
Source: Business World
