Introduction: Why Last-Mile Delivery Matters
Last-mile delivery—the final leg of the supply chain from warehouse to customer—is one of the most critical and costly segments in logistics. With the rapid rise of e-commerce, especially in urban India, this final mile contributes significantly to traffic congestion, air pollution, and carbon emissions. According to ET Manufacturing, expanding the EV fleet in last-mile delivery could help India reduce 5 million tonnes of CO₂ emissions annually by 2030, and up to 380 million tonnes by 2050.
This growing awareness has sparked a green revolution in logistics, with electric vehicles (EVs) emerging as the future of last-mile mobility.
1. The Government Push: Policies Powering EV Growth
India’s central and state governments have introduced a range of initiatives to accelerate EV adoption, particularly in logistics and last-mile operations.
- NITI Aayog’s 2025 blueprint goes beyond just offering incentives; it also recommends strict mandates and disincentives for polluting logistics fleets. It emphasizes financing access for fleets to procure EVs—especially trucks and delivery vans.
- Under the PM E-DRIVE Scheme, the government is offering incentives of up to ₹9.6 lakh per electric truck, directly benefiting the logistics sector.
- The government is also working to clarify that EVs are exempt from the 15-year End-of-Life Rule, encouraging companies and drivers to invest in long-term EV fleets.
- The India Electric Mobility Index developed by NITI Aayog identifies Delhi, Maharashtra, and Chandigarh as the top-performing states in terms of EV readiness, infrastructure, and policy support.
These strong policy interventions are creating a solid foundation for sustainable last-mile logistics.
2. The Industry Shift: E-Commerce Goes Electric
India’s leading e-commerce and quick commerce players are taking bold steps toward sustainability by adopting EVs in their last-mile fleets.
- Amazon, in alignment with Delhi’s aggregator policy, added over 10,000 electric delivery vehicles to its Indian fleet—meeting its sustainability goals ahead of schedule.
- Flipkart’s Instakart partnered with BikeWo to deploy over 1,300 smart electric vehicles across seven states, helping reduce their overall carbon footprint.
- Swiggy, Zomato, BigBasket, and Eternal are all actively transitioning their delivery fleets to electric, reducing fuel costs and pollution in urban centers.
These shifts are not just environmentally driven—they also make good business sense.
3. The Economics of EVs in Logistics
One of the biggest motivations behind the switch to EVs in last-mile delivery is the cost advantage. According to industry reports:
- EVs offer a 15–20% lower Total Cost of Ownership (TCO) than their diesel counterparts due to lower fuel and maintenance costs.
- With increasing petrol and diesel prices, EVs provide a stable and predictable cost structure for logistics companies.
- In addition, state-level subsidies, reduced GST (5% on EVs), and lower road tax make EVs more affordable for fleet operators and gig workers.
- According to a Bengaluru study, 98.1% of consumers believe that EVs are crucial for reducing air pollution, and over 80% are willing to choose brands that promote sustainability in logistics.
This growing awareness is driving both B2C and B2B companies to integrate EVs into their supply chains.
4. The Tech Edge: Battery Swapping & Innovation
Technological innovation is playing a pivotal role in supporting the EV transformation of last-mile delivery.
- Battery swapping is gaining popularity, especially for two- and three-wheelers. Companies like SUN Mobility have partnered with Amazon and Swiggy to enable quick battery changes, solving range anxiety and downtime issues.
- The concept of retrofitting old CNG or diesel autos with electric powertrains is also being explored. In Mumbai, auto unions are proposing a ₹1 lakh retrofit plan for 10,000 autos—bringing EV benefits to the mass segment.
- Startups like Amber Wings, incubated at IIT Madras, have received DGCA approval for hybrid cargo drones. Their ATVA-1 drone can revolutionize short-distance, low-weight deliveries with minimal environmental impact.
- Logistics companies are also adopting AI-powered route optimization, IoT fleet tracking, and solar-powered micro-fulfillment hubs, making last-mile delivery not just greener but also smarter.
5. Challenges on the Road Ahead
Despite the momentum, India still faces significant challenges in scaling EVs for last-mile delivery:
- Charging Infrastructure: While metro cities like Delhi and Bangalore are improving, tier-2 and tier-3 cities still lack sufficient public charging stations, especially for heavy-duty EVs.
- Financing for EVs: Small fleet owners and gig workers often struggle with high upfront costs and lack of EV-specific loan products.
- Range Limitations: Although battery technology is improving, long-distance or high-volume deliveries still face range anxiety, particularly in hot or hilly regions.
- Lack of Trained Manpower: From EV maintenance to battery swapping to logistics software handling, there’s a growing need for skill development in green logistics.
Overcoming these roadblocks will require coordinated efforts from government, industry, and fintech players.
6. A Glimpse into the Future
India’s last-mile delivery space is on the cusp of a sustainability transformation. With EVs reducing emissions, lowering costs, and gaining government support, their role in green logistics will only grow.
Here’s what we can expect in the near future:
- More battery-as-a-service platforms for fleet operators.
- Hydrogen-powered trucks for long-haul transport and electric vehicles for intra-city delivery.
- A rise in demand for electric two-wheelers and mini-vans tailored specifically for urban logistics.
- State-specific EV policies becoming more aggressive, following Delhi and Maharashtra’s lead.
As India targets net-zero emissions by 2070, green logistics—especially last-mile EV delivery—will be a key pillar in meeting that goal.
Conclusion
Electric vehicles are no longer a futuristic concept—they are a present-day solution to India’s growing logistics and environmental challenges. With a strong policy push, rising consumer awareness, and innovative business models, EVs are reshaping how goods move in the last mile.
For India, embracing EVs in last-mile delivery is not just about reducing emissions—it’s about building a smarter, cleaner, and more resilient economy.
