The Need for Sustainable Transportation In India

The Need for Sustainable Transportation In India

‘ACCELERATE‘ by EV2 Ventures is a multi-part article series on the smart mobility landscape in India. In the fourth edition, we outline our perspective on the collective efforts that need to assimilate in the mobility space to achieve India’s target of Net zero Emissions by 2070.

Replacing the conventional transportation system with a sustainable one needs a holistic approach and mandates serious efforts on the part of all relevant stakeholders in the mobility ecosystem.

The pressing issue of climate change has put the focus back on the need to have a sustainable transportation system. Worldwide, transportation accounts for 25% of total CO2 emissions with commuting by road contributing around 77% in this entire release of greenhouse gases. In India, road transport is the major medium of mobility with a 60% share in the entire commute and is responsible for 10% of the country’s total CO2 emissions(Source: TERI), making it the second most carbon emitting sector in the county. Clearly, with the ever-growing clamor to prevent climate change, India needs to make a switch to sustainable transportation that can not only reduce emission levels but also offer affordable, last-mile connectivity to its people.

OECD defines sustainable transportation on two major themes: a) public health and b) generation and substitution of renewable resources. It defines sustainable transportation as a system that won’t endanger public health and offers mobility by using renewable sources below the speed of their regeneration. The definition of sustainable transportation also takes into consideration the use of non-renewable sources by the transportation system at a rate lower than the pace at which renewable substitutes of fossil fuels are being developed.

India has the ambitious goal of reaching net-zero emission targets by 2070. Further, the country has committed to reducing its economic emissions by 45% by the year 2030 as compared to the emission levels in 2005. While there are many ways to push for sustainable transportation, here are key measures that can help India reduce its dependence on fossil fuels and make a transition to safer and greener modes of transportation:

Transition to Electric Vehicles (EVs): With their zero-tailpipe emissions, EVs are among the cleanest modes of transportation around. The Government of India has taken a host of measures to push the adoption of EVs through policy frameworks such as faster adoption and manufacturing of hybrid and electric vehicles (FAME II) scheme and a production-linked incentive (PLI) scheme, among others. Further, under the EV30@2030 mission, the Government is aiming to achieve 30% EV sales in total sales of private cars by 2030 along with 80% EV share in 2W and 3W segments and 70% in case of the commercial vehicle segment. With these efforts, the country also needs to focus on decarbonizing electricity to reap real gains while shifting to EVs. The good news is that India’s installed electricity generation capacity from renewable resources totals 42%, according to the Ministry of Power, which means our excessive reliance on coal power plants is expected to come down going forward.

Strengthening Public Transport: The lack of a well-connected and efficient public transport system is also one of the major reasons behind the use of private vehicles. However, the country has made notable progress in the last decade with metro rails, cab aggregators, and bus rapid transit (BRT) corridors delivering affordable connectivity to the people. Not only have these efforts reduced emissions but they have also played a crucial role in decongesting roads by encouraging the use of public transport. Going forward, the government of India aims to strengthen the public transport system by inducting 8,000 electric buses by 2025.

Technology Integration: Like other fields, new-age technologies can play a crucial role in making transportation systems more efficient in delivering services to end users. Innovations in the fields of AI, ML, and automation can help in multi modal transport optimization, sharing drives, and offering real-time automated updates to commuters. Further, the use of data analytics can optimize routes and reduce excess fuel utilization.

Building Planned Infrastructure: To reduce emissions, new infrastructure projects can be guided in a manner that encourages efficient movements of people, goods, and vehicles within their defined perimeters. Aligned with the provision of the National Urban Transport Policy, 2014, developers could offer inbuilt provisions of flyovers, underpasses, and foot-over bridges to facilitate a safe, secure, and congestion-free transportation scenario. The Interoperability across infrastructure can be facilitated by encouraging the development of smart cities and a circular economy in the country.

Alternative Fuels: Auto players have been able to demonstrate flex-fuel engines capable of running on ethanol-blended fuel, a technology that can substantially reduce vehicular emissions. Further, in the recently concluded G20 summit in New Delhi, a Global Biofuel Alliance (GBA) was launched under the joint leadership of India, the USA, and Brazil to encourage the adoption of biofuel over fossil fuels. GBA aims to offer a global platform to help member nations accelerate technology development, exchange ideas and best practices, and make a conducive policy framework for enhancing the adoption of biofuel in the coming years.

The adoption of sustainable transportation can be looked upon as a part of the larger strategy that has the potential to be adopted by the world for building a sustainable future for the next generations. It’s based on the holistic viewpoint that considers 3Es – Environment, Economy, and Equity – as a premise for economic development. For successful integration and implementation of sustainable transportation in India, all stakeholders in the sector need to come together and put in concerted efforts, thus becoming instrumental in creating mutually beneficial partnerships across the mobility ecosystem.

The above views have also been published as an opinion article on Opportunity India

Contact Us: We welcome all friends of Ev2 Ventures to reach out for an open discussion and we are just an email away for any inquiries or clarifications – Email:

Rising Digitization to Redefine Indian Logistics & Transportation Industry

Rising Digitization to Redefine Indian Logistics & Transportation Industry

‘ACCELERATE’ by EV2 Ventures is a multi-part article series on the smart mobility landscape in India. This is the third edition in which we analyze the dynamics of the logistics sector in India.

While logistics and supply chain have always been the backbone for any country’s growth, the Covid-19 pandemic has emphasized their importance like never before. This period has exposed limitations in the supply chain and passenger transportation system across the globe including India.

The Indian logistics market, currently valued at USD $215 billion (Based on estimates of economic survey conducted in 2017-18), is highly unorganized, disconnected and heavily reliant on analog processes — As a result, India’s logistics costs stand at 13-14% (As per report by Arthur D. Little India released in collaboration with CII) of GDP as compared to an average of 10% in US, Germany, Japan and other BRIC nations. Though, the government is targeting to bring down that cost to <10% over the next few years, but it seems to be a daunting task until the industry embraces robust technology intervention. Historically, the pace of technology adoption has been sluggish, even though the industry understands the need of capable technology to help transform the disjointed supply chain into a connected ecosystem. The delivery of goods from the manufacturer to the end consumer is often a lengthy process and involves a multi-step journey which includes (1) Plant & First mile Logistics, (2) Mid mile Logistics and (3) Last mile delivery. Supply chain management professionals are required to make this journey as efficient and cost effective as possible. Lately, we have seen that last mile delivery services have garnered keen interest, largely driven by extensive e-commerce adoption.

Last mile logistics commences from picking up the goods from the final processing center or warehouse and delivering to the end consumer in a couple of days. Huge transformation across this segment lately has been seen due to the impact of COVID-19, which has accelerated the overall consumer behavior and the retail ecosystem – whereby the hyperlocal delivery for essential goods has grown by 3x (As reported by Indian Transport & Logistics News) and over 80% consumers are expecting same day delivery. Although this has highlighted the need for more robust delivery mechanism in the country few startups have now adopted technology and reworked fulfilment processes to help trim their delivery time from a couple of days to a couple of hours. Nevertheless, the competition is getting intense with large e-commerce players such as — Bigbasket, Grofers, Licious, Flipkart Supermarket, Dmart, JioMart etc. entering the hyperlocal delivery segment with Amazon like SLA’s. There are more than 12 million Kirana stores in the country which are becoming the cornerstone of the growth plans for those retail giants. They are now transforming from brick & mortar form to quasi-digital businesses which implies that there is little room for error in the current business environment. Several players are now experimenting with new business models through strategic tie-ups. For instance, Paytm mall has tied up with 10,000+ Kirana stores to enable grocery deliveries and on the other hand, Flipkart has partnered with retail store chain, Vishal Mega mart for home delivery of essentials.

Mid mile (“Line haul”) logistics is another leg which is equally important to the last mile delivery segment. Unlike consumer facing businesses, Mid mile is seldom visible to the end consumer but has a significant relevance in the logistics supply chain. It includes movement of goods from the warehouse to the distribution/retail center for last mile delivery. Though, there are few challenges, such as lack of live tracking mechanisms, empty miles, paperwork, poor routing, etc., that are now cropping up due to the rapid rise in importance of e-commerce & online retail industry. These problems are plaguing the transporters and shippers alike and lead to high logistics costs & operational inefficiencies. In an e-commerce retail setup, Mid mile logistics cost contributes to around 42% (As per KPMG report on E-commerce retail logistics in India) of the total processing cost which is critical for any businesses decision making process. Technologies that enable real-time feedback, enhance route optimization and provide return trip visibility, help prevent cost escalation.

Keeping in mind that multiple start-ups such as Blackbuck, Delhivery, Rivigo etc have evolved into unicorns and now with the Indian Government granting Infrastructure status to logistics in India, the space continues to attract investments with over USD $2 billion investments (As per Venture Intelligence & Tracxn database) in last 2 years which is gaining momentum over the years as compared to the mere USD $77 million of investment in 2014. Additionally, the introduction of the e-way bill & the government’s plan to pump in USD $75 billion (As per announcement of GOI under the ambitious Bharatmala Pariyojana) in development of road infrastructure in the country will give a huge boost to businesses dependent on road transportation.

Additionally, to further streamline supply chain, the focus should not just be on last mile and mid mile, but the industry should also emphasize plant & first mile logistics, as it facilitates movement of goods from factory/plant to distribution center, where mid and last mile logistics takes over. Inefficiencies across this segment create incorrect detailing, packaging, delay at plant, congestion, yard pilferage challenges, which result in a spiraling effect across the ecosystem for the buyers and shippers alike. India losses approximately USD $20 billion (Based on a study conducted by TCI in collaboration with IIM-Kolkata) each year due to road transit delays and accounts for 64% (As per BSI & TT Club Cargo Theft Report) of Asia’s cargo theft (2019). Therefore, companies are required to have integration of such technology to the system which can manage their plant/yard and first mile field logistics efficiently. Players such as Enmovil are attempting to address these issues through a robust unified solution, that help provide insights regarding gate congestion, loading / unloading delays, mishandling etc.

In this unpredictable environment, companies are increasingly relying on AI and data analytics to enhance efficiency and improve real-time decision making. Startups such as Shadowfax, Trukky, MoveInSync, Yoryo etc. are attempting to utilize robust technologies to enable booking automation, route optimization and reduction of empty miles. Separately, businesses are also looking to optimize costs through mass adoption of electric vehicle fleets for cargo & passenger movement. (See our concept note on EV’s)

We believe that as businesses start to recognize logistics as more than just a cost center, they will have to consider agility as the new normal because first mile & mid mile logistics are as critical as last mile logistics in the entire supply chain. The need of the hour is to optimize the whole supply chain system but digitization by itself is unlikely to address all the issues – utilization of technology and continuous innovation is critical. Today’s environment has provided us the opportunity to re-evaluate the future of the logistics & transportation industry – shifting our approach from reactive to proactive to make the system more resilient and effective is likely to yield more success in the future.

Contact Us: We welcome all friends of Ev2 Ventures to reach out for an open discussion and we are just an email away for any inquiries or clarifications – Email:

Agricultural Supply Chain: Will 2020 be a game changer?

Agricultural Supply Chain: Will 2020 be a game changer?

‘ACCELERATE‘ by EV2 Ventures is a multi-part article series on the smart mobility landscape in India. This is the second edition in which we analyze technology’s potential to transform the Indian agricultural supply chain.

The Gross value added by Indian agricultural and related industries is estimated to be ˜US$ 276 Bn in FY20 – accounting for ~15% of India’s GDP. This sector has been the key economic pillar for the country, with agriculture being the mainstay of livelihood for more than 60% of the Indian rural population, compared to 2% in USA and 10% in other Asian countries. Demand for agri-products has always been secular but the supply side is constrained with myriad challenges across every step of the value chain – pre-harvest, harvest and post-harvest.

40% lower yield per hectareDespite having the 2nd largest arable land in the world, India’s yield per hectare is still ~40% less than other Asian countries which is mainly caused by restricted access to quality seeds and fertilizers, small land holdings, limited mechanization and automation, lengthy supply chain with multiple middlemen between the farmer and the end consumer. The supply chain inefficiencies, combined with a lack of sufficient cold storage infrastructure, contribute to substantial wastage of agricultural products and perpetuate a lack of transparent and fair pricing. India’s post-harvest losses, in the fruits & vegetable category alone, amount to US$ 20 billion per annum.

New age entrepreneurs are bringing technological innovation to the sector in an attempt to address these challenges and unlock value across the supply chain. The agri start-up ecosystem in India is mushrooming with 450+ start-ups that are currently operational, and over 50% focused on making the supply chain more efficient. Investors are increasingly showing interest in the space and according to a recent report on agritech, the segment attracted venture investments to the tune of ~US$ 250 million in 2019 and is estimated to grow to US$ 500 million over the next 2 years.

Indian farmers in aggregate incur ~US$ 13 billion per year in post-harvest losses (spoilage of produce on the farm), primary causes of which are poor storage facilities and expensive and Farmer's take homeunreliable transportation. Further, the take home earning percentage of Indian farmers is very low accounting for only 15- 20% of the end consumer selling price. In developed countries, the take home percentage is multiple times higher at approximately 70-80%. Improving market linkages – at pre-harvest stage (i.e. by creating access to quality fertilizers, seeds, equipment etc.) and post-harvest stage (by establishing seamless conections with marketplaces, retailers etc.) will have a substantial impact on the value chain. A number of start-ups, including BigHaat, Gramophone, Freshokartz, Agrostar are providing access to quality inputs to farmers while players such as Ninjacart, Crofarm, Waycool etc. are connecting farmers with buyers. Such solutions are providing demand discovery and transparent pricing in addition to improved crop yield.  Combined demand discovery and increased crop yield can increase farmer income by ~50%. Over time, as farmers witness tangible outcomes from using modern technologies adapted to the agricultural sector, we expect to see increased adoption of such innovative models, which should help to streamline the entire industries supply chain process.

Farmer's Produce Earning CycleSeparately, developing adequate storage infrastructure is also vital for reducing post-harvest losses, and maintaining long term agri supply chain efficiency. India’s agri-storage capacity is estimated at ~162 million metric tonnes out of which cold chain capacity is ~30-35 million metric tonnes – with more than 50% of cold chain facilities consisting of single commodity storages (mainly potato) with dated technology systems. Upcoming players such as Ecozen are attempting to address this by offering portable cold rooms on lease, thereby, assisting with on-farm cooling at an affordable cost.

Further, Precision farming techniques, enabled by IoT and AI, collect farm data to provide predictive insights and enhance decision-making in real time. Players like CropIn, Fasal, and Aibono are offering a wide variety of solutions using analytics, sensors and vision-based systems. However, farmer’s willingness to adopt & pay for these technologies could be a constraint initially as there are basic technology applications that can have substantial impact on crop yields and farmer incomes. Training combined with, affordable financing models, such as subscription and rent based models, may pave the way to encourage wide-spread adoption of technologies at reduced upfront costs.

New players are utilizing novel technologies to plug numerous inefficiencies plaguing the sector; however, multiple factors are hindering adoption. At the outset, changing farmer perception is crucial. Businesses need to invest in building strong on-ground community networks on both demand and supply side, in order to ensure sustainable traction. This sales process is time consuming due to rural infrastructure, and the number of small farmers involved in the sector.

Several global players are beginning to realize the potential of the Indian agricultural market and are engaging with startups to help them expand their reach. Early this year, Microsoft launched a program for agritech startups to support them with technology, business & marketing tools. Similarly, Bayer partnered with Agribazaar to assist farmers with technology transfers and advisory services.

The current pandemic, like never before, has exposed the gaps in our current system and tested the functionality of existing business models.  The pandemic lockdown resulted in abandoned harvest & waste of foods due to lack of proper supply chain, agri related advisory & poor storage/warehousing facilities in the economy. The crisis caused both demand & supply side bottlenecks & impacted the life of a large number of agri farmers & traders.

Keeping the above in mind a few startups have stepped up to redesign the farming ecosystem with the focus to eliminate the multi-step middle-men distribution system, the inefficiencies of which eat most of the farmer’s income. This include, Hydroponic (soil less) farming, smart/robotics farming using IOT/AI/ML based technology & Digitizing the supply chain network to curb any kind of unfair selling of the farm produce.

We believe that this is the right time for startups to seize the opportunity in this sector and focus on providing sophisticated solutions that can help in building an integrated, resilient supply chains & smart farming ecosystem for a self-reliant future.

Contact Us: We welcome all friends of Ev2 Ventures to reach out for an open discussion and we are just an email away for any inquiries or clarifications – Email:

Electric Vehicles: Ushering in a New Automotive Era

Electric Vehicles: Ushering in a New Automotive Era

‘ACCELERATE‘ by EV2 Ventures is a multi-part article series on the smart mobility landscape in India. In the first edition, we outline our perspective on the evolving automotive market in India driven by the increasing focus on EV’s.

India, the world’s fourth-largest automobile market, is on the cusp of transformation to a cleaner and more sustainable mobility option through enabling electrification for vehicles.

Conservatively, the Indian electric vehicle (EV) market size was estimated at 0.76 million units in 2019 and is expected to reach 5.6 million units (~USD $21 billion) by 2025 at a volume CAGR of ~40%, according to our internal analysis based on various reports including, among others Frost & Sullivan Mega Themes, Global EV Outlook by IEA and Enabling the Transition to Electric Mobility by FICCI. EVs accounted only for a mere 3% of the ~24 million automobiles sold in India during 2019, with the electric two-wheeler (2W) and electric three-wheeler (3W) segments displaying early adoption, capturing 97% of total EV sales during the same period.

High upfront cost and range anxiety have been paramount concerns for users; hence, we are witnessing a different trajectory across various segments, primarily based on use case. The Indian 2W and 3W markets, which are amongst the largest globally at ~84% of all vehicles on the road in India, have spearheaded the transition to electric vehicles. Currently, due to increased popularity across short-distance public transportation and commercial applications, 3Ws have been critical in paving the way for initial EV adoption. And, keeping in mind that 3Ws still mostly operate on lead-acid batteries (need to be replaced every 6 months) even though being considered, as the first movers in the EV space in India, are ripe for disruption, due to the transition towards more efficient and cleaner technologies. In like manner, we see proliferation of electric scooters (accounting for ~97% of total 2W electric sales in India), primarily for use in hyperlocal delivery. Owing to high utilization (meaning they are driven many kilometres in a given day), these segments are better positioned to benefit from the lower operating and maintenance cost of EVs, thereby resulting in a lower total cost of ownership (TCO).

Over a 5-year period, the TCO of electric 2Ws & 3Ws is lower than conventional Internal Combustion Engine (ICE) vehicles for commercial use cases. However, the same cannot be achieved currently for passenger applications due to the combination of lower utilization rates, the absence of robust charging network, and higher average cost when compared to an ICE vehicle. A 2W has typical cost savings of ~USD $900 while a 3W has ~USD $4,500 over a comparable ICE 2W or 3W vehicle respectively, from a 5-year outlook. To put the savings in perspective, on average the total cost savings on an EV 2W and 3W vehicle cumulatively over 5-years is roughly equivalent to the upfront cost of the entire ICE vehicle.

On the other hand, the electric four-wheeler (4W) market, comprising passenger cars and buses, is still in its infancy. While there is some early traction in the commercial segment, apprehension remains on account of the battery size – resulting in a significantly higher purchase price. A traditional ICE bus typically costs ~USD $50,000 while an electric bus costs 6-7x more, with lack of charging infrastructure compounding the problem. Due to similar concerns, the passenger car market is yet to make meaningful inroads in the country.


Startups are playing a pivotal role in developing the electric vehicle ecosystem in India, by indigenously developing battery and drivetrain technologies. Ather Energy, Gugu Energy, Ultraviolette, Tork Motors, Battre, Okinawa Scooters are some of the many startups driving the EV 2W segment along with established institutional players like TVS, Bajaj, Hero Electric etc. with the Indian 3W market being driven by design-build manufacturers such as Gayam Motor Works, Kinetic Green, Euler Motors and Mahindra Electric. The key driving force behind early adoption across these two segments is the average breakeven point, compared to the cost of a comparable ICE vehicle, of around 2 years for 2W and 3W when used in commercial applications.
With the overall EV landscape slowly solidifying and addressing of the various consumer concerns, we are witnessing improvements in battery technology, driving range, design capabilities as well as increased local capabilities pertaining to production and assembly.

In addition to consumers, a perception shift in the investment community is also noticeable. According to various transaction databases – in 2019, the EV space in India attracted investments worth ~USD $776 million (accounting for more than 50% of global investment value) compared to merely ~USD $16 million in 2015. Even the average investment value has expanded from an average transaction size of ~USD $2 million in 2015 to ~USD $22 million in 2019.

An increased volume and value of investment sizes is imperative in order to help India create a competitive edge in the global EV market. Globally, the EV market is valued at ~USD $162 billion (Source: Valuates) and is dominated by players such as Tesla, BYD, SAIC, Nissan, BMW, Volkswagen etc. Investors have already evinced keen interest in start-ups across the world, for example Rivian, which has raised over USD $5 billion till date even prior to its commercial launch in 2021. While China leads the pack in EV sales volume globally, Norway has the highest EV penetration (30%+) across the world. Both these countries have been able to set successful examples for electrification with the right combination of infrastructure development, enhanced battery technologies and government assistance.

Now, companies across the world are concentrating on sustainable profitability and in the process, several of them are opting for electrification – DHL is planning to use clean transportation for 70% of its delivery operations by 2025, IKEA & Unilver have also announced 100% electric fleets by 2030.  Additionally, even in India, delivery fleets of Amazon, Flipkart, BigBasket are increasingly shifting their operations to EVs.  While there is a social governance angle to these changes, there is also a large financial incentive, since EVs have lower per kilometre delivery costs and in general lower maintenance costs.

To make the most of the favorable demand and investment environment, Indian players need to create long term sustainable local manufacturing capabilities –and, the current pandemic has, more than ever, underscored the need for geographical diversity in supply chains. Collaboration between large OEMs and startups could also benefit the entire ecosystem with one bringing manufacturing expertise and the other offering technological dexterity respectively. Hero MotoCorp’s investment in Ather is one such example.

Keeping in mind that India has a target of achieving 30% EV penetration by 2030, this is one of the most dynamic phases of the Indian automotive sector – one that requires careful calibration and a supportive ecosystem for successful transition.

In conclusion, we believe that the initial successes, and the potential for sustainable value creation, in the EV sector in India will be in high utilization environments, including logistics, supply-chain, hyper local delivery, and shared mobility spaces. Smart mobility, in this sense, is the application of technology to venture scale problems where financial viability is demonstrable to customers from the beginning.

Contact Us: We welcome all friends of Ev2 Ventures to reach out for an open discussion and we are just an email away for any inquiries or clarifications – Email:

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