Fleet operators are seen as key to the adoption of electric vehicles

Companies in the transport sector, and car manufacturers in particular, are among the most visible pioneers of the inevitable transition to cleaner fuels. Electric cars are becoming a household concept, regardless of how prohibitively expensive they are for most of humanity – another classic case where modern technology is largely unaffordable for the poor.

That’s where big fleet operators come in, according to New York-based RedBlue Capital, an early-stage investor in clean mobility startups. Companies like Amazon and food delivery services like DoorDash and Instacart will drive faster adoption of electric vehicles, according to RedBlue partners Olaf Sakkers and Prescott Watson. Carriers, taxis, transit buses and corporate shuttles will also play a role, as these operators are conservative about total cost of ownership and use the vehicles much more, making the economy of electric vehicles appealing to them.

In 2019, RedBlue invested in Zoomo, an Australian e-bike startup that provides food delivery services. Thanks to wholesale sales, Zoomo has already become one of the fastest growing e-bike companies in the world, according to Watson. Most recently, RedBlue invested $28 million in EVage, a light-duty electric truck supplier in India.

“We should measure the success of the transition to electric vehicles by the number of miles driven, not by the number of vehicles sold to the general public,” Sakkers said in an interview in Singapore recently. “For many people, EVs are just a second or third car they barely drive, which doesn’t move the needle. But fleet operators use them multiple times a day.”

This is especially true for a country like India, a nation of 1.4 billion people, one-sixth of the world’s population. There, very cheap, no-frills cars made by local units of Suzuki and Hyundai dominate. Price elasticity is so tight that Ford and GM eventually pulled out, unable to sell enough cars to justify the billions of dollars in investment over many years.

In India, fleet operators are already paving the way for electrification. BigBasket, which delivers everything from groceries to kitchenware, is on a mission to electrify 90% of its fleet. In New Delhi, people often tweet about their rides with BluSmart, an all-electric taxi startup with nearly half a million app downloads. He estimates that the market will more than quadruple to reach $90 billion by 2030 in several Indian megacities. Amazon and Walmart-owned retailer Flipkart are also pushing for more electric vehicles, but the problem is they can’t get enough supply.

“India has traditionally waited to source automotive products from rich countries once prices have fallen,” Watson said. “But the ‘wait ten years’ approach doesn’t work with the current climate timelines and so India in particular will need to develop indigenous technologies to make electric vehicles cheap enough for mass adoption in the short term. opportunity in which we are investing.”

This is different from larger, more developed countries where cars tend to get bigger even though usage remains limited. Call it an automotive obesity problem. In America, a typical vehicle sits in the garage 96% of the time, Sakkers wrote in his book Mobility Disruption Framework, citing research from McKinsey.

But in emerging economies like India, new concepts are gaining traction. Electric scooters are selling like hot cakes and the South Asian nation is now considering battery swapping rather than charging stations to ensure faster adoption of cleaner fuels.

According to BloombergNEF, the market for light trucks and vans in India is growing two to three times that of Europe or the United States, and almost 40% of the country’s three-wheeler fleet is already electric.

About Terry Simmons

Check Also

Gadkari to deliver keynote at Mint Mobility Conclave

The Mint Mobility Conclave, a gathering of policymakers and business leaders to discuss the state …