India’s logistics sector is witnessing a strong shift towards electric vehicles (EVs), driven by significant cost benefits over internal combustion engine (ICE) counterparts. A recent report by management consultancy Praxis Global Alliance titled “Decoding the Economics of EV Fleets in Indian Logistics” reveals that EVs offer a 15–20 per cent lower total cost of ownership (TCO), making them increasingly viable for urban and last-mile delivery operations.

The report highlights that electric three-wheelers incur a TCO of ₹2.5–₹3.1 per km, while diesel variants cost ₹3.5–₹4.2 per km. For small four-wheelers, EVs have a TCO of ₹7.5–₹9 per km compared to ₹9.5–₹10.5 for diesel vehicles. This economic edge, along with favourable regulations and evolving business models, is accelerating EV adoption in India’s e-commerce logistics sector, where penetration currently stands at 14% and is projected to touch 35% by 2027.

High adoption is seen in predictable, return-to-base use cases with daily usage above 60–80 km—typical of intra-city delivery and hyperlocal models. However, EV uptake remains low in the heavy commercial vehicle (HCV) segment due to TCO disadvantages and payload limitations, with electric HCVs currently limited to pilot projects in mining and port logistics.

Innovative solutions like Battery-as-a-Service (BaaS) and leasing are helping bring down costs further. BaaS can cut monthly expenses for a three-wheeler operator by up to 25%, enabling EV use with reduced upfront capital requirements.

The report also underscores the critical role of fleet operators and logistics integrators in driving EV adoption through route optimisation, bulk procurement, and efficient management of charging downtime.

Nevertheless, challenges persist. Limited institutional financing for small fleet owners and sparse charging infrastructure in Tier II and III cities continue to hinder broader adoption.

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