IT companies, BPOs set target of 100% electric vehicle cab fleet by 2030

Most global and Indian corporates in the information technology/IT-enabled services (IT/ITES), business process outsourcing (BPO) and knowledge process outsourcing (KPO) spaces — which offer transport services to their employees —want all their cabs to be electric vehicles (EVs) by 2030.

 

The target is rather ambitious. It means converting 95 per cent of the existing fleet of over 900,000 cabs, which transports corporate employees from home to office and back. The figure is 90 per cent in the case of five cities — Benguluru, Chennai, Hyderabad, Pune and Delhi-NCR, as they have a higher EV penetration.

 

Sriram Kannan, founder and chief executive officer (CEO) of Routematic, which is in the business-to-business (B2B) space, said, “Corporates want 100 per cent EVs by 2040. Currently, on an average, 10 per cent of our 2,500 cabs are EVs and our estimate is that for the overall industry, it will be 5 per cent. Companies are giving us mandates to increase the numbers every year but in stages. We think we will be able to hit 30 per cent in the next two years.” 

 

Routematic offers services to top Fortune 500 and Indian players. 

 

A senior executive of a multinational corporation (MNC), with backroom offices in key cities, said, “Our global mandate — as part of our programme to reduce carbon footprint — is to ensure that all vehicles used for employee transportation should be electric by 2028. In India, we have a staggered plan till 2030 because of unavailability of electric vehicles.”  The biggest challenge is the viability of putting an EV on the road. Sriram added that currently his company pays drivers an assured monthly income, irrespective of the number of trips.

 

In case of a driver-owner, he would rather prefer an internal combustion engine (ICE) vehicle to an EV as the latter is costly and the equated monthly instalment (EMI) would be double. This would significantly impact his net monthly income.

 

Also, another worry for the driver would be range anxiety in an EV while doing various trips throughout the day on ride-hailing platforms. This is why Routematic has leased EVs and employs drivers for them separately.

 

To break even on an EV, it needs to do around 2,400 billable kilometres a month. In addition to EMI being double for an EV, there’s also the challenge of infrequent charging points.

 

Routematic is trying to solve this by selectively dispatching the EV and ICE fleet based on data and predictive analytics.

 

Also, availability of electric cars is another stumbling block.

 

For instance, corporates in most cases don’t allow hatchbacks but want sedans in which four people can travel. Even if they use hatchbacks, only two passengers can sit at the back. These are for safety reasons. This limits the choice of vehicle.

 

Even the production of electric cars in the country is limited — it has just crossed over 100,000 — or just one eighth of the total requirement of cars.

 

But EVs are slowly gaining traction — apart from individual buyers, mobility players are also increasing their fleet with more electric options.

 

And, the dominant supplier is Tata Motors from whom they lease the cars, though players like JSW MG and Mahindra are set to provide them with more options. 

Long road ahead 

• Over 900,000 cabs across India in corporate transportation services 
• 90% of demand from only five cities
• Currently, only 5% of cabs are electric 
• Low vehicle availability poses big challenge to EV viability
• Drivers unwilling to buy EVs because of high EMIs