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

• Around 7,16,000 units of commercial vehicles (CV) were sold across India in FY22, of which nearly two-thirds or 4,56,000 were LCVs (light commercial vehicles). Source: Statista

• CARE ratings observes that after a volume growth of 30.7% in FY22, the CV industry is likely to post 20-22% growth, and the LCV sales are likely to grow by 18-19% in FY23.

As per CareEdge, LCV goods segment has observed a 55% Y-o-Y growth in the H1 of FY 23.

• CRISIL expects LCV sales volumes to grow 8-10% in FY24.

LCV sales are expected to be spurred by an increased focus on last-mile connectivity, a rise in replacement demand, the thriving e-commerce sector and stricter restrictions on the movement of MHCVs (medium and heavy commercial vehicles) within city limits, notes a CRISIL report.

Four-Wheeler electric goods carriers in India | Launches and announcements

• Tata Motors has introduced an all-electric version of the ACE small commercial vehicle. The ACE EV has a lightweight container with a 208 cubic foot cargo compartment that can handle gradients of up to 22% when fully loaded. The payload capacity is 600 kg. On May 20, 2022, TATA Motors said that it has signed MoUs with Amazon, BigBasket, City Link, DOT, Flipkart, LetsTransport, MoEVing, and Yelo EV for the delivery of 39,000 units. The company has already delivered the first batch of its ACE EVs to institutional customers.

• Pune-headquartered EKA Mobility, a subsidiary of Pinnacle Industries, has received the CMVR certification for its 2.5-tonne GVM electric light commercial vehicle from the Central Institute of Road Transport. The company is looking to start trials and sales in the coming months. Expected to be produced in Pune.

• Jupiter Electric Mobility (JEM) showcased its commercial electric vehicles at AutoExpo 2023 with – JEM TEZ, a 2.2-ton GVW vehicle with a 1-ton payload and EV STAR CC, a 7-ton GVW vehicle with a 4-ton payload. The 2.2-ton Jupiter JEM TEZ has a range of 180 km on a single charge. The EV STAR CC will have a range of 250 km and a 150 kW motor. The company plans to manufacture both vehicles at its Indore facility and launch them this year.

• Switch Mobility (an Ashok Leyland company) displayed its electric commercial vehicle, IeV, at Autoexpo23. IeV has a GVW of 3490 kg and a range of 154 km.

• Eicher displayed its electric last-mile delivery truck, the Eicher Pro 2049, which has a GVW of 4900 kg and a range of up to 174 km.

• Omega Seiki Mobility is expected to launch 4W LCV M1KA with a payload of 1 ton.

• Gujarat-based Croyance Automotive has launched its eLCV with a payload capacity of 800 kg and a range of 150km per charge.

• Chandigarh-based EVage is also expected to launch its electric LCV soon.

Feasibility of e-LCV in the Indian CV market

Unlike a personal vehicle, the decision to purchase a CV relies majorly on economic calculations. The total cost of ownership (TCO) plays a more important role in commercial-vehicle purchasing considerations. Based on current fuel price dynamics, the economics for last-mile delivery companies have been under stress owing to the steep inflation in diesel prices, which have increased by over 35% since 2019. In addition, CNG prices at the pump have also increased by 70% during the same time.

Based on recent electric commercial vehicle announcements by major OEMs and start-ups, EVreporter conducted an analysis of the LCV goods carrier market in India based on different payload carrying capacities to understand the feasibility of switching to eLCV for fleet operators and logistics players. For the analysis, a list of available 4-Wheeler LCV vehicles in India under BS-VI norms was reviewed, and eLCV models which have been announced and showcased recently were summarized in the table below:

Disclaimer and assumptions

• We have assumed the ex-showroom prices of models yet to be launched based on data/feedback from industry sources for the sake of this analysis. We considered the battery cost for a 40 kWh battery pack to be around INR 8 lakhs and a corresponding powertrain to cost around INR 5 lakhs.
• Maintenance and insurance costs for all vehicles are not considered.
• Fuel and charging prices are considered constant over the next four years for this analysis.
• LiV sof different fuel types are running at 70% efficiency, and the price of vehicles, fuels and electric tariffs are taken as standards in Delhi.
• Diesel – 90 INR/ltr, Petrol – 97 INR/ltr, CNG – 80 INR/kg
• EVs are assumed to be charged 80% of the time by AC chargers and 20% by fast chargers.
• AC charging cost – 7 INR/kWh, DC charging cost – 17 INR/kWh

Based on the above assumptions and the data in the table, a bubble chart is generated with the payload capacity against the ex-showroom price, with the bubble size representing running costs (INR/km) for different LCVs.

• Diesel trucks dominate the LCV segment with a 54% share of vehicle models, followed by CNG with a 24% share and petrol models with an 8% share with payloads ranging from 700 to 750 kg only. With the list of electric vehicle models announced, EV models are expected to contribute about 14% in terms of the number of available models.

• ICE-powered SCVs with a payload capacity of 625-750 kgs have the largest model share of 82% under the 1-ton payload category. Tata Ace EV with 600 kg payload has been launched in this category.

• We found that EV models are likely to be 1.5 to 2 times more expensive than equivalent ICE models in terms of initial purchase cost, but the running costs of EV models would come out to be 2.5 to 3 times cheaper.

• All announced eLCV models have a range of less than 175 km on a single charge and take 6-7 hours to charge on a slow charge and about 2 hours on a fast charge.

Based on vehicles classified by load capacity, price differentials and running costs per kilometre are analyzed to indicate the feasibility of e-LCVs in India’s last-mile logistics space.

As shown, the initial purchase cost of EVs is much higher, but the running cost is lower than the ICE counterparts on account of lower electricity charges.

Vehicles with less than 1 ton of payload capacity will achieve TCO parity with ICE vehicles by 4th or 5th year of operation, even with a conservative estimate of a 3,000 km monthly run. The more utilization, the earlier parity will be achieved. For vehicles between 1 and 2-tonne payload, the TCO parity will be achieved between the 3rd and 4th year of operation. For vehicles supporting payloads greater than 2 tonnes, the TCO parity can be achieved in 4 years of operation.

Assuming an average monthly run of 3,000 km for an LCV with different payload carrying capacities, the approximate fuel cost savings over a period of 4 years will bring the TCO of electric LCVs at par with corresponding ICE vehicles.