Electric three-wheelers gather momentum, courtesy the involvement of bigger players.
Story by Team CV
The electric mobility division of Mahindra and Mahindra recently announced the launch of a new electric three-wheeler cargo model, Treo Zor. It is powered by an eight-kW lithium-ion battery with a life that exceeds 1.50 lakh km. With a payload of 550 kg, the e-three wheeler features an advanced IP67-rated motor that gives a driving range of 125 km. With a wheelbase of 2216 mm, the Treo has a clutch-less automatic transmission. Priced at Rs.2.73 lakh (ex-showroom Delhi, net of FAME two and state subsidies), the electric cargo three-wheeler offers savings of more than Rs.60,000 per year as compared to an equivalent diesel cargo vehicle. This amounts to a fuel cost saving of roughly Rs. 2.10 per km. Aimed at first and last-mile deliveries, the Treo Zor is backed by an investment of Rs.1000 crores in technologies and infrastructure.
To add to over 5000 Treos (passenger carriers) already running on the roads, the cargo e-three wheeler, with over 50 patents in the electric vehicle space, is expected to enhance the efficiency of e-commerce players; of individual fleet buyers and others. Packed with cloud-based connectivity features, the Treo Zor joins an increasing market space of e-three wheelers that include new and existing players, some of them closing on the fine line that separates the unorganised players.

Faster adoption
With the adoption of the electric vehicle set to happen faster than anticipated in the wake of regulations and as US president-elect speaks about his country rejoining the Paris climate change accord, e-cargo three-wheelers are set to add a new chapter to the efficiency graph of many logistics players, especially in the area of e-commerce and express deliveries in urban and semi-urban regions. Promising lower running as well as maintenance costs, these vehicles are also addressing the local needs of local clients. Taking into consideration the aspirations and needs of such vehicle users, many of them global in nature, the e-cargo three-wheelers are also coming to address the per capita income difference between this market and the other, more advanced markets. With a high potential for growth through a cautious local approach, e-cargo three-wheelers could do with the use of range-extending technologies like battery swapping in the wake of their working cycles that could extend up to 20 hours.
Consider the Omega Seiki e-cargo three-wheelers for example. They offer a range of over 100 km much like the Treo Zor e-cargo three-wheeler. Built ergonomically with the use of simulation software in keeping up with Indian driving conditions, the Omega Seiki e-cargo three-wheelers are yet another example of a local approach in terms of achieving 100 per cent localisation and local manufacture. With the entire driving and vehicle handling experience felt using immersion reality tools, the Omega Seiki e-cargo three-wheelers are also an example of how new emerging technologies are being put to smart use. Without losing sight of affordability, the vehicles use telematics to gather data that could be analysed to ensure higher efficiency and profitability at the end of the day. Like the Treo Zor and the Omega Seiki e-cargo three-wheelers, there is a similar breed of vehicles from Kinetic, Lohia Auto and many others.

Aspirations and needs
Common among them all is the ability to meet the needs and aspirations of the local buyers. Most employ telematics and cloud-based connectivity to remotely monitor their behaviour, vehicle range, speed, location and more. Most are driver-centric and replete with ‘smart’ features onboard like different driving modes, secure and lockable storage spaces for documents, and customisable cargo trays among others. Arriving at a time when aspirations and needs are influenced by factors like a sluggish economy, higher inflation, stagnant freight rates and subdued projections, electric cargo three-wheelers have work cut for them. Backed by a standard warranty of three years and up to 80,000 km, the ones coming from the organised sector players are supported by a strong arm of technology. In terms of costs, the competitiveness is growing vis-a-vis conventional IC engine three-wheelers but at an albeit slower pace.
The factors dictating the changing competitive index of conventional cargo three-wheelers and electric cargo three-wheelers are linked to the TCO. They involve higher operating costs of an IC engine three-wheeler largely influenced by rising consumable costs and initial acquisition cost. At the other end, the electric three-wheelers are coming to gain from falling battery prices and rising localisation. These are also the two prime reasons perhaps that has e-commerce companies and express delivery logistics players interested in e-cargo three-wheelers. The relative commercial value of the electric vehicles in the shared space and last-mile space fast getting on par or exceeding that of conventional cargo three-wheelers, traction is only poised to rise.

Proliferation through a local approach
For its Treo Zor e-cargo three-wheeler, M&M is known to be talking to large players like Flipkart, Amazon, Reliance Retail and others. It is the same story with other e-cargo three-wheeler manufacturers as well. An early involvement of customers like Flipkart, Amazon and Reliance Retail means that the design and development of e-cargo three wheelers from the organised players is on par or close to meeting the aspirations as well as the needs of the local customer. Scoring well on the customer value proportion front thus, electric cargo three-wheelers are expected to grow to 1.45 lakh units by 2030. Electric vehicles, at the other end, are expected to grow by 34 times the number today, contributing about 64 per cent of sales by 2030. With some regions in India showing higher interest for electric cargo three-wheelers over others, there is a clear emphasis on localisation that is emerging. It is partly supported by Government regulations and partly by the market aspirations and needs.
In terms of localisation, M&M has invested in a MESMA 48 platform at its Bangalore facility. For its e-cargo three-wheelers, Omega Seiki has claimed 99 per cent localisation, including the local manufacture of batteries. The Kinetic Safar Jumbo e-cargo three wheeler, which is priced at Rs.2.5 lakh, is also said to be completely localised. With a running cost as low as 50 paise per km, it has 100 per cent indigenous parts. For the Treo Zor, M&M has developed its own eight-kilowatt motor; its own battery management and the battery pack. Some critical parts such as motor controllers, the battery pack, and associated electronics are made by M&M itself, in fact.

While the lithium-ion battery packs of most e-cargo three-wheelers are assembled locally, the key parts like cells are sourced from China and Korea. That could however soon be a thing of the past. India Energy Storage Alliance (IESA) and the Centre for Materials for Electronics Technology (C-MET) recently conducted a two-day workshop on the pouch cell fabrication and battery testing. Ten participants from companies working on battery manufacturing, automotive component manufacturing, and ESS (energy storage system) technology, participated with a view to tap the latest technology trends and understand the fundamentals of cell manufacturing.
While such efforts gain momentum and could accelerate the complete localisation of lithium-ion battery packs, recent announcements to manufacture the pouch cells locally include Exide Industries, Nexcharge, Li Energy, Tata Chemicals among others. These endeavours are supported by a government initiative to enhance India’s manufacturing capabilities and exports. A production linked incentive scheme worth Rs.1,45,980 crores were approved by the Union Cabinet for 10 key sectors, one of them a sector for cell manufacture under advanced chemistry cell battery initiative. Efforts like these are also complemented by many states who announced their EV manufacturing policy. In view of the commitment to adhere to the Paris climate change accord, a robust long-term policy for emissions reduction that looks beyond the nature of technology and instead at a local approach through the development of new or existing technologies is being called for. Such a policy mandate would further accelerate the building of a strong local supply chain for EVs. An organised effort on this front would further fuel the market acceptance of e-cargo three-wheelers.