“We are India’s first carbon-negative EV fleet operators”

As India embraces sustainable and eco-friendly practices, green delivery services are gaining traction. These services prioritize the use of electric or hybrid vehicles, bicycle couriers and eco-conscious packaging to reduce their carbon footprint. EVIFY, a tech-enabled startup with the focus of providing green delivery services to all the E-comm giants in Tier I, II and III cities of India, reached a fleet size of 350+ vehicles in one and a half years in Surat and Ahmedabad through its unique asset-light model. It currently delivers groceries, food, e-commerce packages and hyper-local deliveries with the help of tech-enabled two-wheelers which are low on maintenance and high on performance.

India Business and Trade spoke exclusively to Devrishi Arora, Founder, CEO and COO at EVIFY to explore how the company aims to reduce carbon footprints with their eco-friendly logistics solutions.

IBT: Can you share the inspiration behind starting EVIFY and what motivated you to focus on green delivery services in India?

Devrishi Arora: I come from a hardcore logistics background, so my family has been in logistics since the 1960s. I come from a very conventional logistics background, and there was always a motivation to do something on the tech side in this rather boring logistics line. How do you make it interesting, and how do you make it stand out? It’s the tech part, correct? Just before the lockdown during the Corona period, I launched a new idea for a tier two city like Surat. Because it is one of the textile capitals of the world, Ahmedabad for naturals, and Surat for synthetics. I understood that there’s a lot of intra-city logistics happening with three-wheelers and four-wheelers. So I thought, why don’t we create a platform where people can book vehicles through their app? They wouldn’t have to wait for local dealers or vendors to arrange vehicles for them, and surge pricing and taking advantage of any clients would stop. The potential is enormous over here. Anyone familiar with Surat and the textile market will understand the vast opportunities available.

So I launched a company called Big Daddy Logistics, exclusively for IC engine vehicles, focusing on three-wheelers in the logistics sector with tech-enabled solutions. However, the COVID-19 pandemic hit hard, and since it was a B2C sector, there was no funding available. I had to rely on my own finances, and it became unsustainable, forcing me to shut it down. Despite this setback, I gained valuable insights into intracity logistics during that time. After the first wave of the pandemic, my friend Vinit Mittal and his wife, Pragya Mittal, who come from a green background and specialize in solar panel manufacturing and lithium-ion battery production, approached me. Vinit suggested that we venture into intracity logistics but on the B2B side. I found the idea appealing because during the lockdown, what continued to run were businesses like Zomato, Swiggy, Big Basket, Flipkart, and Amazon.

The whole world is in lockdown, but home deliveries continue. We realized that it is changing people’s lifestyles and addressing issues. Where there’s a solution to a problem, there’s a business opportunity. Since they were already manufacturing lithium-ion batteries, I understood that the heart and soul of our venture could be here. We could conduct research and find solutions for electric vehicles. This is how the three of us came together, and now Pragya, Vinit’s wife and I are the co-founders of EVIFY. We launched EVIFY in September 2021 with just one electric vehicle, and we have grown to over 400 vehicles today. This is how it all unfolded.

We are also proud to be India’s first carbon-negative EV fleet operator. Our clients can offset their Scope 3 carbon emissions simply by using our services. We are not just a typical business; we are making an environmental and social impact as well. That’s what we’ve accomplished.

IBT: What challenges did you encounter when establishing a fleet of electric vehicles for last-mile logistics in Tier I, II, and III cities of India?

Devrishi Arora: Well, I’m sure you will also agree that the EV ecosystem is still in its infancy, and only a few cities in India, such as Delhi and the NCR region, Bangalore, some parts of Hyderabad, and some parts of Mumbai, can be considered to have a developed EV infrastructure. In these areas, you can find charging points, battery swapping stations, trained technicians and mechanics for EVs, and even dedicated EV garages. However, when you talk about tier one, two, and three cities like Surat and Ahmedabad, where we are currently operating, the EV ecosystem is virtually non-existent. It’s close to zero. So, it was initially very challenging for us to start this business.

So we thought, why don’t we try to bring everything in-house for now? Then, gradually, we can consider outsourcing certain aspects of the entire EV ecosystem. We encountered several challenges, including sourcing the right vehicles. We are very selective and ensure they are robust. Additionally, we prioritize vehicles with strong after-sales support. Importantly, we focus on the battery packs and their chemistry. For example, we do not use NMC batteries; we opt for LFP (Lithium Iron Phosphate) battery packs because they are safer and have longer life cycles, approximately three times that of NMC. We consider various technical details as well.

Initially, it was quite challenging, but we persevered. It wasn’t just on the fleet side; we also encountered challenges on the client side. It took us six months to secure Big Basket as a client and about one and a half years to secure Flipkart. In metro cities, perhaps it’s a matter of mindset, but these opportunities were not easily accessible. Maybe it’s a mindset issue, but I faced it. It was very difficult. Riders found it challenging to accept that electric vehicles could handle deliveries. The general public often had misconceptions that electric vehicles might catch fire, have a limited range (less than 40-50 km), and be expensive to charge. Education played a crucial role in addressing these concerns. We worked to educate both clients and riders, and this educational process was ongoing.

Initially, the journey was tough. However, after the first six to nine months of trial and error, experimenting with different business models, battery packs, conducting research and development, and educating stakeholders, we started scaling our operations. When I say it was hard, I mean it was really tough. But today, we are growing. People have embraced electric vehicles, clients have adopted them, and we are not only solving the electrification of their fleets but also addressing their workforce challenges. Perhaps this is one reason why clients now prefer us over their standard internal combustion engine vehicles and riders. Yes, the journey is still ongoing. We are relatively young today, but we are making progress.

IBT: How has the growth of EVIFY’s fleet of electric vehicles contributed to reducing carbon emissions and promoting sustainability in the logistics sector?

Devrishi Arora: There are two aspects to this. Firstly, as I mentioned earlier, we are India’s first carbon-negative EV fleet operator. Let’s discuss scope three carbon emissions. What exactly are these scope three carbon emissions? They primarily result from logistics, which is typically outsourced. To illustrate, consider Flipkart, which outsources its logistics to companies like Ecom Express for last-mile deliveries. Companies like us use vehicles to transport goods for final delivery. For instance, if you’re Flipkart, you can always monitor your employees, the vehicles they use, the distances they cover, and whether they use public transport or their private vehicles. You can also track the electricity units consumed in your office, including ACs, lights, fans, printers, and computers.

So it’s relatively straightforward when you can trace carbon emissions. However, when it comes to scope three emissions, specifically those resulting from logistics that are often outsourced and further outsourced, it becomes nearly impossible to keep track of or offset these carbon emissions. But when you work with EVIFY, you have the opportunity to offset your scope of three carbon emissions. That’s one part of the story.

The other aspect, in general terms, is that when one of our vehicles operates, it runs for an average of about 140 kms, sometimes more and sometimes less. On average, when one vehicle covers around 120 km a day, we are saving approximately 15 to 16 kilograms of carbon dioxide emissions (CO2 emissions). Considering we operate a fleet of about 400 vehicles today if you multiply this by 120 km per day on average and then by 365 days, you can appreciate the significant amount of carbon emissions in lakhs and crores of kilograms that we are preventing. This is the kind of impact we are making on the environment and how EVs are genuinely transforming the delivery business.

IBT: Can you elaborate on EVIFY’s unique asset-light model and how it has facilitated the expansion of your fleet from 30 vehicles in September 2021 to over 350 vehicles in Surat and Ahmedabad?

Devrishi Arora:  The asset-light model is currently in vogue for several reasons. Firstly, when you approach a traditional transporter or logistics company, they typically prefer to own and operate the assets as per their preferences. However, if you aim to scale, especially as a startup, there’s a fundamental difference between a small or medium-sized enterprise (SME) and a startup. The most significant distinction lies in the scaling aspect. If I were to follow a traditional path, I wouldn’t be able to achieve a fleet size of 400, and very soon, we’ll reach 700. When I say “soon,” I mean in less than two months. We’re already placing orders for new EVs. This has become possible due to the asset-light model.

Now, what is this asset-light model all about? Essentially, we secure financing for these vehicles from High Net Worth Individuals (HNIs), Fintech firms, and Non-Banking Financial Companies (NBFCs) to keep their financial statements strong. They are inclined to do so for a couple of reasons.

Firstly, electric vehicles offer around 40% depreciation benefits for up to eight years. This is a significant incentive that attracts HNIs and other stakeholders.

Apart from that, there is also some kind of return on their investment in the vehicle. Just as a bank finances a vehicle, these individuals and organizations are financing us while keeping their financial records healthy. This is one significant difference, and after three years, the assets usually return to our books once they are free and fully paid up. This approach has helped us maintain an asset-light structure.

Another way we achieve this is through our battery packs. As I mentioned earlier, we exclusively use LFP chemistry because, compared to the standard NMC batteries which offer 500 to 700 life cycles, we obtain more than 2000 life cycles with LFPs. Consequently, when the battery, which accounts for about 50% of the vehicle’s cost, lasts for more than three or four years, it helps us remain asset-light. To be precise, it is Capex-light. This is how we manage to scale. We are currently operating in Surat, launched in Ahmedabad in January of this year, and will be launching in Vadodara by the end of November, with Rajkot following in March 2024. All of this has been possible due to our asset-light and Capex-light model.

IBT: What types of products and services does EVIFY currently deliver, and how does the company cater to the diverse needs of customers in these cities?

Devrishi Arora: At the moment, as I mentioned earlier, our company is still young, and our primary focus is on last-mile logistics. We handle deliveries from the client’s warehouse or distribution centre to the customer’s doorstep, especially for clients like Swiggy and Zomato, where we transport food from a restaurant to the customer’s location. However, we are also in the planning stages for mid-mile logistics using drones, which is expected to roll out next year, likely in the middle of the year. After that, we will gradually expand our services to cover the first-mile logistics. So, we are taking a phased approach, encompassing last mile, mid-mile, and first mile. This is how we envision addressing the issues faced by our clients, particularly in the e-commerce industry, where last-mile delivery presents significant challenges, including high attrition rates.

If you Google it today, you’ll find that companies like Amazon, Flipkart, and other clients are grappling with rider retention issues in the last-mile delivery process. This is precisely where we are putting in our best efforts. As I mentioned earlier, where there’s a solution to a problem, there’s a business opportunity. This is what we are endeavouring to achieve, and we’ve been fairly successful in doing so. It’s one of the reasons our clients prefer to work with us.

IBT: Could you share some insights into the technology-enabled two-wheelers used for hyper-local deliveries by EVIFY? What advantages do they offer compared to traditional delivery methods?

Devrishi Arora: Certainly. We operate with a hub and spoke model, which sets us apart from conventional delivery methods. We don’t allow riders to take vehicles home; instead, they must come to our hub to collect a charged vehicle. At the hub, we have EV-trained technicians and mechanics who ensure the vehicles’ uptime.

Additionally, we integrate IoT (Internet of Things) technology into our operations. This integration offers various benefits and features, some of which have become standard in recent months (although they were relatively new about six months to a year ago). These features include remote immobilization, which allows you to control the vehicle’s ignition, starting and shutting off with your mobile device. In cases of misuse, you can remotely shut down the vehicle. We also implement standard geofencing and location services.

What sets us apart is our approach to mixing and customizing these features. For example, we combine geofencing and time bounding. This means that after 11:00 p.m. until 6:00 in the morning if any of our riders return to the hub to park the vehicles, thanks to geofencing and time bounding, they won’t be able to start the vehicle again until morning.

For example, let’s say you’re an IFA rider, and you’ve returned and parked the vehicle at our hub. You won’t be able to start the vehicle until six in the morning. The reason behind this restriction is that we prefer not to allow riders to take the vehicle home. If you took it home, there might be concerns about whether the vehicle is properly charged or if a family member is using it. This opens up the potential for misuse. Additionally, many riders are migrants from other cities and states, and we want to avoid the risk of vehicles being misplaced or stolen. We need to address these concerns.

We’ve also implemented other features, such as allowing the rider to start the vehicle only if they are on my platform. This ensures that only authorized users can start the vehicle. Furthermore, we have features for our technicians, which enable them to monitor the vehicle’s uptime, identify service requirements, and address issues related to insurance, accidents, and warranties through a tech-based approach.

Likewise, we have features for our watchmen and supervisors. If a vehicle has left the hub, we can simply scan it to determine its location. For instance, if a vehicle was initially at hub A and is now parked at hub B, we don’t need to physically search for it. The technology informs us that the vehicle has moved from the first hub to the second, saving a significant amount of man-hours because there’s no need to physically track down the vehicle. Technology simplifies our operations.

Additionally, we have certain features related to Service Level Agreements (SLAs) that help us avoid negative billing in cases where orders are delayed in terms of deliveries. These features are still under development, and it will take another six months to introduce a couple of new features. However, we already have a set of standard features, along with some new ones that we are currently using to maintain maximum control over our fleet and reduce any instances of negative billing.

IBT: How has the adoption of green delivery services by major e-commerce giants in India impacted EVIFY’s growth and business strategy?

Devrishi Arora:  There is indeed an awakening, I would say. This awakening stems from the realization that logistics contributes significantly to pollution. We are all aware of how cities like Delhi, Mumbai, and other urban areas have become some of the most polluted places in the world. In fact, you can compare the pollution generated in one city to that of an entire country like France or Canada. This stark comparison highlights the substantial environmental impact of logistics.

With the delivery industry booming, the number of delivery personnel and deliveries has significantly increased. However, what has also multiplied in this process is pollution.

There is significant government support and a considerable influx of international or foreign investors in many of these companies. Consequently, there is an additional push for ESG (Environmental, Social, and Governance) governance from each client. Additionally, SEBI (Securities and Exchange Board of India) has introduced a rule requiring every publicly listed company to update its ESG aspects. For example, Zomato is now a publicly listed company and must report on the types of pollution and carbon emissions it generates. This has further stimulated the industry, with more companies seeking to electrify their fleets. They recognize the benefits, not only in terms of environmental impact but also in compliance. Today, many companies prefer electric fleets over petrol, diesel, or internal combustion (IC) fleets because of the lower operational costs and reduced delivery expenses. It’s a winning factor for clients, not only in terms of environmental impact but also in operational efficiency. This has given us a significant boost.

IBT: What are the future plans and expansion goals for EVIFY, both in terms of fleet size and geographical reach?

Devrishi Arora: Currently, we have around 418 to 420 vehicles, and we just received a small lot yesterday, with more vehicles on the way, as I mentioned earlier. We are aiming for a fleet size of about 1,200 by March 2024, around 6,000 to 7,000 by March 2025, and approximately 30,000 to 35,000 by the next year.

In terms of geographical expansion, besides operating in Surat and Ahmedabad, which we are currently present in, and Vadodara and Rajkot scheduled for November and March, respectively, we are targeting cities like Indore, Bhopal, Nasik, Nagpur, Jodhpur, Udaipur, and similar locations. Instead of focusing on metros, I would say we are concentrating on rural India, where the potential is immense, and not many are tapping into it. While many people aspire to be in a metro city, whether to start a business or a career, not many are exploring the opportunities in rural India, which is a beautiful place with tremendous demand and potential. That’s where we are heading, and that’s our vision.

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Mr. Devrishi Arora, the Founder is the CEO & COO of EVIFY. He comes from a family that has more than 60 years of existence and experience in the transportation sector, *making him a third-generation entrepreneur* with in-depth knowledge and experience of this industry’s operations. He has two Masters degrees- first in International Business & Emerging Markets and second in Tech Entrepreneurship from the world’s top universities -The University of Edinburgh and University College London respectively. He’s also done project management programs at London Business School. This makes him a perfect fit to direct a tech-based Logistics start-up. He takes care of operations, client negotiations and onboarding, industry networking and R&D.