EVs offer 15–20% cost advantage over diesel in logistics: Report
used in India's
logistics sector
offer a 15–20 per cent lower
total cost of ownership
(TCO) compared to internal combustion engine (ICE) vehicles, according to a new report by management consultancy Praxis Global Alliance.
The report titled Decoding the Economics of EV Fleets in Indian Logistics finds that this cost advantage is driving electric vehicle (EV) adoption, particularly in urban logistics and last-mile delivery.
'EV TCO is 15–20 per cent lower than ICE in 3W and small 4W fleets due to lower fuel and maintenance costs,' the report said. For electric three-wheelers used in logistics, the TCO is estimated between ₹2.5 and ₹3.1 per km, whereas diesel three-wheelers cost ₹3.5–₹4.2 per km to operate. In the case of four-wheelers, EVs incur a TCO of ₹7.5–₹9 per km, compared to ₹9.5–₹10.5 for diesel-powered vehicles.
EV penetration in the e-commerce logistics segment stands at 14 per cent and is expected to rise to 35 per cent by 2027. According to the report, 'This is supported by economic parity achieved in multiple use cases and a favourable regulatory environment.'
The study highlights that logistics
EV adoption
is highest in predictable, return-to-base applications with daily usage above 60–80 km, such as intra-city delivery and hyperlocal segments.
However, the report notes that uptake remains limited in heavy commercial vehicles (HCVs) due to 'unfavourable TCO and payload constraints.' Electric HCVs are currently being piloted in mining and port logistics applications, but widespread adoption is not yet viable, the study adds.
Battery-as-a-service (BaaS) and leasing are emerging models that improve affordability. BaaS can reduce monthly outflows for a 3W operator by up to 25 per cent. The model enables operators to switch to EVs with lower upfront investment.
The study emphasises the role of fleet operators and logistics integrators in EV adoption. 'They enable route optimisation, bulk procurement, and charging downtime management,' it stated.
Financing and charging infrastructure were identified as key constraints. 'Access to institutional financing is still limited for small fleet operators, and urban charging infra remains sparse in Tier II and III cities,' the report notes.
Policy measures such as FAME-II subsidies, battery swapping draft guidelines, and state-level incentives have helped improve EV viability. The study recommends accelerating deployment of public charging networks and announcing a roadmap for zero-emission zones.
India's logistics sector, currently valued at $250 billion, is expected to double by 2030. 'Integrating EVs across logistics use cases will be essential to decarbonise this growth,' the report said.
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