How electric LCVs are powering India's real economy and driving impact from the ground up

Time of India

19-07-2025

India's economic growth story is, at its core, a sustainable logistics story. As GDP expands and consumption patterns evolve rapidly, the efficient movement of goods has become very crucial in serving as the infrastructure that underpins economic momentum. The logistics sector, which contributes approximately 14 per cent to India's GDP, powers everything from rural–urban trade flows to the e-commerce deliveries driving consumption-led growth.
While transportation efficiency is essential, the true impact of logistics lies in its ability to enable economic inclusion. When goods move quickly and affordably, small businesses gain access to wider markets, rural entrepreneurs can reach urban consumers, and economic opportunities begin to flow across regions. India's logistics backbone will ultimately determine whether growth remains confined to urban centres or spreads inclusively across the country's diverse geographies.
The Role of Last-Mile Mobility in Logistics
Within the logistics value chain, last-mile delivery represents both the most critical and most expensive segment. Last-mile operations handle the crucial final delivery phase across urban and semi-urban India, connecting warehouses and distribution centres directly to consumers and businesses.
Critically, the rupee per kilometre cost is highest in last-mile operations, making this segment a priority area for cost optimisation. This high-cost, high-impact segment serves an extraordinarily diverse user base: micro, small, and medium enterprises (MSMEs), rural entrepreneurs building their first businesses, individual delivery drivers, and large logistics players managing extensive fleets. The economic health of millions of small-scale operators depends on last-mile efficiency and affordability.
Ground Realities: Challenges with Traditional Vehicles
Internal Combustion Engine (ICE) vehicles have served India's logistics needs for decades, but several challenges are becoming increasingly apparent in today's operating environment.
High emissions from commercial vehicles create environmental pressures, particularly in high-density commercial corridors where these vehicles operate intensively. Rising fuel costs add unpredictability to business operations, making financial planning difficult for small operators working on thin margins.
Productivity challenges emerge from maintenance requirements, driver fatigue from noise and vibration, and the overall operational complexity of ICE systems. For micro-entrepreneurs and small fleet owners, these factors translate into business risks through cost unpredictability and reduced operational efficiency.
Opportunities: Why EVs Are a Game Changer
Electric Light Commercial Vehicles (e-LCVs) address these challenges while creating new opportunities for economic growth.
Lower total cost of ownership is the most significant benefit. On average, our SWITCH IeV3 and SWITCH IeV4 models operate at just ₹2 per kilometre, compared to ₹7 for diesel alternatives. This substantial cost advantage translates to savings of around ₹15,000 per month for operators covering 3,000 kilometres per month, thereby transforming business economics for small-scale operators.
Higher productivity emerges from reduced maintenance requirements, lower driver fatigue, and operational simplicity. Electric vehicles provide connectivity and predictability, enabling better business planning and reinvestment strategies. For micro-entrepreneurs and fleet operators, these improvements can mean the difference between subsistence operations and sustainable business growth.
Driving Real-World Impact: Voices from the Ground
Real stories from MSME leaders who are transforming their operations with SWITCH's electric mobility solutions.
In the poultry industry, a business with over two decades of experience adopted the SWITCH IeV3 to manage daily operations across nearly 190 km. The switch from diesel brought down running costs from ₹3,600 per day to just ₹230, resulting in monthly savings of over ₹38,000 and nearly ₹4.5 lakh annually. Beyond cost, the vibration-free ride significantly reduced egg breakage during transport, directly enhancing revenue.
In the healthcare supply sector, a Bengaluru-based enterprise distributing medical-grade plastic products to hospitals and labs saw its logistics costs cut by nearly 50% after integrating the SWITCH IeV3. Annual savings now exceed ₹2.5–3 lakh. With minimal servicing needs and 50% fewer breakdowns than diesel counterparts, delivery reliability has sharply improved. Notably, the vehicle's intuitive dual-mode drive system (Drive/Sport) has empowered more women to join the driving workforce, resulting in an increase in women drivers within the fleet.
These stories underscore the true power of electric mobility when it's thoughtfully designed and precisely delivered. From cutting emissions and operational costs to increasing workforce inclusivity and enhancing business resilience, the SWITCH IeV3 is redefining last-mile logistics.
The Ecosystem Enablers: What's Powering the EV Shift?
Four key enablers are driving EV adoption in the LCV space, creating a comprehensive transformation rather than isolated technological change.
Economics (TCO Advantage):
The shift to EVs offers significant cost savings, not only in fuel but also in maintenance, leading to improved long-term ROI. This substantial reduction in total cost of ownership (TCO) is transforming the economics of operations, especially for small-scale and fleet-based businesses.
OEM Innovations:
The market now offers diverse product choices specifically tailored to logistics, last-mile, and cargo use cases. Manufacturers are developing modular architectures, fast-charging capabilities, and payload-optimised designs that address real operational requirements rather than adapting passenger vehicle technology.
Government Support:
Both state and central governments are playing a catalytic role in accelerating adoption:
State-Level Incentives: Demand-based subsidies for three- and four-wheeler commercial EVs are being actively considered. States like Delhi, Maharashtra, and Odisha are moving toward offering dedicated incentives for four-wheeler eLCVs, thereby reducing the initial acquisition barrier for fleet operators.
Central Schemes:
Programs like the PM-eBus Sewa and e-AMRIT are supporting the expansion of charging infrastructure and EV ecosystem readiness.
Market Readiness & User Acceptance:
As more drivers, entrepreneurs, and businesses gain real-world experience with EVs, confidence in electric mobility is rising. Practical exposure to improved reliability, lower operational costs, and the growing support network is fostering faster acceptance across use cases.
Environmental Impact & Policy Relevance
Light Commercial Vehicles make up ~60 per cent of total commercial vehicles, making their electrification critical for emission reduction goals. Our own electric vehicle deployments have already achieved 150 million green kilometres and saved 100,000 tonnes of CO₂ emissions. Scaling this across India's LCV and Bus fleet could eliminate ~170 billion litres of crude oil consumption by 2030, representing ~12 Bn USD in foreign exchange savings while dramatically improving air quality.
The environmental impact amplifies in commercial corridors where vehicles operate longer hours and cover greater distances. Electrifying this segment delivers disproportionate environmental benefits while serving the economy's most productive elements.
A Positive Outlook
Electric LCVs
represent far more than a technological shift, they are a catalyst for economic inclusion, employment generation, and environmental responsibility. The convergence of compelling economics, supportive policies, and market readiness positions electric LCVs as the foundation for India's sustainable logistics transformation.
This transformation directly serves India's economic growth aspirations. When logistics costs decrease and efficiency improves, the benefits cascade through entire value chains: rural producers access urban markets more affordably, small businesses expand their service areas, and new entrepreneurship opportunities emerge across diverse geographies.
As India's logistics sector evolves, electric LCVs will power not just the movement of goods, but the democratisation of economic opportunity. The vehicles connecting warehouses to doorsteps, farms to markets, and small businesses to consumers are becoming the infrastructure for inclusive economic growth—proving that sustainability and economic development aren't competing priorities, but complementary forces driving India's next phase of expansion.