Last-Mile Delivery Charging May Be A $20-Billion Market, Says Exponent Energy CEO
Last-mile delivery vehicles are expected to become fully electric in the next five to six years, says Arun Vinayak.
The energy requirements of last-mile delivery vehicles, which are rapidly turning electric, may be a $20 billion market, according to Arun Vinayak of Exponent Energy.
“Energy for commercial vehicles is a $150 billion market in India. And 30% of that will shift to electric quickly, especially last mile, which itself is a $20 billion market,” Vinayak, co-founder and chief executive officer of the Bengaluru-based charging infrastructure company, told BQ Prime.
Commercial vehicles account for 10% of total vehicles but require 70% of the energy consumed by vehicles plying on roads, Vinayak said.
Last-mile delivery, a growing segment within commercial vehicles, includes transport of goods from a warehouse or a fulfillment centre to the customer. Vinayak, former chief product officer at electric scooter maker Ather Energy Pvt., expects this to become fully electric in the next five to six years.
Backed by Hero MotoCorp Ltd.’s Pawan Munjal, the Motherson Group, and investment funds—including Lightspeed Venture Partners, YourNest Venture Capital and 3one4 Capital—Exponent Energy claims to have developed a technology that can fully charge a vehicle in just 15 minutes.
The company recently showcased it by partnering with electric cargo vehicle maker Altigreen, whose three-wheeler was fitted with an 8.19-kilowatt-hour battery pack delivered by Exponent.
The catch is that the 15-minute charging is only possible when the charging infrastructure is also provided by the company.
Energy is a two-sided issue as the transaction between the charger and the battery is a critical part of the system, Vinayak said. Earlier, the energy companies and automotive companies didn’t have to work together, but now the vehicle will only charge as quickly as its battery will permit, he said.
At a time when the government is encouraging battery-swapping stations, the company is convinced that offering charging infrastructure is a better solution for vehicle electrification.
Even for battery swapping, you need to rapidly charge the batteries or the inventory of batteries will be huge, costing the end-consumer that much more, Vinayak said.
“Rapid charging is an inevitable answer, and we need to crack rapid charging," he said. "As we have more vehicles on the ground sucking more energy, you need to transfer energy from the grid to the vehicle faster and faster. There is no escaping that problem."
Currently, the company has an annual manufacturing capacity of 10,000-12,000 battery packs, which is ready to be expanded further, while it claims that its charging network is already profitable.
Its immediate target is to launch 100 charging stations and push 2,000 vehicles powered by Exponent’s battery pack in Bengaluru and replicate the same model in top six cities.