A key driver for fleet electrification is economic. For delivery and intra-city logistics, characterized by short routes, high daily usage, and regular returns to depots, EVs already demonstrate a 15–20 percent reduction in total cost of ownership compared to petrol or diesel counterparts. These savings primarily stem from lower “fuel” costs (electricity) and reduced maintenance, thanks to fewer moving parts in electric drivetrains, writes Bharath Rao, CEO & Founder, Emobi.
Electric vehicles (EVs) are progressively transforming urban transportation in many Indian cities, particularly for goods and people movement. This isn’t a sudden overhaul but a steady evolution within ride-hailing and delivery sectors. This shift is quietly bringing about changes in urban air quality, operational costs, and the overall experience of mobility. While this transformation holds considerable promise, it also faces significant hurdles. If these obstacles are not directly addressed, the potential of EVs may remain largely unfulfilled.
A key driver for fleet electrification is economic. For delivery and intra-city logistics, characterized by short routes, high daily usage, and regular returns to depots, EVs already demonstrate a 15–20 percent reduction in total cost of ownership compared to petrol or diesel counterparts. These savings primarily stem from lower “fuel” costs (electricity) and reduced maintenance, thanks to fewer moving parts in electric drivetrains. The business model becomes particularly attractive when an EV can be dependably charged overnight at a depot and then utilized intensively throughout the day.
Despite the long-term operational cost benefits of electric vehicles (EVs), their adoption in ride-hailing and taxi fleets has been slow due to several key challenges.
High Upfront Costs and Financial Viability: The initial purchase price of EVs is a significant barrier for fleet operators. Even with lower running costs, the extended payback period, especially if government subsidies decrease or tariffs change, makes the financial investment less appealing. This has led many cities to delay or scale back targets for electric taxis when subsidies were reduced or charging infrastructure proved inadequate.
Limited Supply and Product Suitability: The available EV models often cater more to private users than to the rigorous demands of fleet operations, which require durability, ease of servicing, and constant use. Delays in deliveries, a lack of model variety, and concerns about battery reliability under heavy load further deter operators from large-scale EV adoption.
Insufficient Charging Infrastructure: A major constraint is the lack of widespread and reliable charging infrastructure. While urban centers may have charging stations, peripheral areas, intercity routes, logistics parks, and depot zones are typically underserved. Establishing charging depots is complex, involving land acquisition, grid upgrades, securing permissions, installing feeder lines, and ensuring adequate power during peak demand. In areas with high vehicle density, limitations in transformer capacity or feeder lines can even prevent the installation of fast chargers. Without dependable, high-capacity charging, fleet downtime negates the potential cost advantages of EVs.
Another important—and frequently shaky—role is played by policy and regulation. Many subsidy schemes are subject to frequent revisions or have short time horizons, which creates uncertainty for any business looking to commit cash over an extended period of time. Scaling is made more difficult for operators that operate beyond city or state borders by variations in licensing, electricity tariffs, registration laws, and vehicle standards among jurisdictions. Furthermore, rules for fleet electrification are occasionally drafted with little consideration for gig workers or smaller operators who might not have access to funding or assistance. In light of this, how can the current, silent shift be expanded into a larger movement? The following actions, in my opinion, are crucial:
First, governments must commit to stable, multi-year policies rather than stop-gap incentives. A five-to ten-year roadmap with clear goals, predictable subsidies or cost offsets, and alignment across states would give fleet operators confidence to invest. Changing incentives every few years breeds hesitation.
Second, infrastructure must be planned with fleets in mind, not as an afterthought. That means prioritizing depot charging, fast-charge hubs along logistics corridors, and power grid strengthening in high-usage zones. Standardizing charging connectors, payment systems, and communication protocols would reduce friction and risk for operators. Also, regulatory fast-tracking of permissions for depots and charging sites can cut delays.
Third, new financing models are critical. Upfront cost is the biggest deterrent. Leasing, battery-as-a-service, shared capital models, credit guarantees, or low-interest loans targeted to fleet operators would lower entry barriers. Pooling demand or cooperative ownership of charging assets may help smaller operators.
Fourth, make operations smarter. Use data, route optimization, scheduling of charging during off-peak hours, predictive maintenance, and better battery management to squeeze efficiency. Governments or industry bodies could fund pilot projects or R&D in fleet management technologies; such innovation has high leverage over cost reduction.
Fifth, ensure equity and inclusiveness. Many ride-hail drivers, gig workers, or small fleet operators may lack funds or access to infrastructure. Policies should include support for them—grants, subsidies, training, retrofit programs, or guaranteed grid access. Also, invest in battery recycling, technician training, safety standards, and after-sales networks so the entire ecosystem grows, not just vehicle sales.
Finally, promote transparency and risk sharing. Publish real data on battery degradation, downtime, maintenance costs, resale value, charging reliability, and total operating economics. That builds trust in EVs for fleets. Public-private partnerships or third parties can help certify or audit performance to reduce perceived risk.
Lower pollution, healthier communities, fewer greenhouse gas emissions, and more stable energy prices (less susceptible to fluctuations in the price of oil) are all appealing advantages when these actions are taken together. Each fleet vehicle replaces numerous internal combustion engine (ICE) vehicles in terms of usage, making fleets a higher-leverage entry point than private automobiles. In other words, electrifying fleets might be the difference between a specialized EV industry and a significant, fundamental change in the way Indian cities operate.
For me, the question is not if the transformation will occur, but rather how quickly and effectively. Cheaper batteries, increased investment in charging, and increased environmental pressure are all contributing factors, but the change may stall in the absence of astute regulations, infrastructure focus, inclusive funding, and operational innovation. The silent electrification of fleets could become a loud statement that Indian cities have improved if we take good action now.