The electric vehicle industry, in order to be successful in controlling emissions and passing on the cost benefits to end consumers, needs many enablers. Of course, there are companies and start-ups working on solving the range anxiety problem by setting up EV charging points and battery swap stations, but the industry needs initiatives which can give people reasons to invest in EVs and put them on roads.
Zyngo EV Mobility, a Gurugram-headquartered logistics start-up, is working as an enabler and has helped deploy over 700 commercial EVs on roads. Prateek Rao, Founder & CEO, Zyngo EV Mobility, in a conversation with Mobility Outlook, shared, 'Our plan is to put 18,000 commercial electric vehicles on the road by the end of next year. Most of these electric vehicles will be three wheelers followed by two wheelers. We are also waiting on OEMs to launch small four wheeler cargo EVs.'
The self-funded start-up claims to have generated INR 22 crore worth of revenues during the last two years (since it started operations) with the majority coming during the last eight months. Zyngo EV Mobility, in the process, has now achieved the feat of three lakh deliveries via EVs every month. BigBasket, JioMart, Flipkart, Zepto, BlinkIt and Amazon Fresh are some of the clients Zyngo EV Mobility is currently associated with. The company's founders have invested more than a million dollars in Zyngo EV Mobility.
Buying & Financing EVs
Rao shared that his start-up functions around an 'asset-light' model. This model has enabled the company to minimise its Capex as the start-up does not need to invest in buying electric vehicles. 'We onboard EV owners, fleet operators and more such institutions to deliver goods via electric vehicles. The EVs on our platform in Delhi NCR and a few other parts of the country are not owned by us. The aim is to become one of the biggest carbon neutral logistics companies in India,' explained Rao.
The start-up claims it has the largest EV fleet for logistics in India. Zyngo EV Mobility's fleet of EVs is dominated by electric three-wheelers (approx 500), followed by electric two-wheelers (approx 200). It is a must to note here that while the start-up helps EV drivers with work and income, it is slowly building a capability where it can encourage drivers to invest in EVs for a certain brand.
'Drivers working with us earn anywhere between INR 20,000 to INR 25,000 per month. This sum varies on the amount of work they are ready to take,' said Rao.
Zyngo EV Mobility also helps drivers choose and get an electric vehicle financed. The start-up refers to itself as an integrator into the EV logistics ecosystem. Zyngo helps drivers bag better deals on buying electric vehicles as the start-up has deep connections with EV OEMs. The start-up even claims to get test rides of commercial EVs that are not yet launched in the country. The founders of the start-up have a cumulative experience of more than 35 years of being associated with the logistics industry.
Rao explained that Zyngo has tie-ups with multiple charging and battery swap hubs as well, and the start-up helps drivers in getting their vehicles parked and charged at such stations. All the information a driver on board with Zyngo needs is passed or can be accessed via an app specifically meant for them. 'Our entire fleet is EVs, so we only onboard drivers who have their own EVs. Either the vehicles are owned by the driver, driver-owner, or these are directly leased from OEMs,' he said.
Onboarding drivers to the platform precedes stringent checks, including criminal records and id checks. The start-up allows its drivers to withdraw payments starting from a 15 days window. This means that funds disbursement occurs every 15 or 30 days. However, info on how much a driver earned can be accessed via an app anytime.
As per Rao, E-commerce and grocery deliveries are the two primary sectors driving the adoption of EVs in the logistics sector. Start-ups and established organisations launching super fast deliveries are adding fuel to the fire. 'Margin in groceries is super thin and companies cannot afford to lose profits by doing deliveries using petrol/diesel/cng powered vehicles. The running cost of an EV is much smaller than ICE vehicles. This makes EVs the number one choice for logistics,' explained Rao.
Amazon, Flipkart and many other heavyweights of the e-commerce industry also have CSR plans to minimise emissions to certain levels. This is one of the other reasons driving the adoption of EVs in the logistics sector. It is worth mentioning that while Amazon and Flipkart have their own logistic companies, the demand for delivery vehicles in the country is so high that they have no choice but to depend on third-party services.
Asked if there would come a time when the likes of Amazon and BigBasket would choose to invest in their own EVs for logistics and stop availing services of Zyngo EV Mobility, Rao explained, 'These companies have their own logistic entities. There are challenges on the ground level that cannot be solved by such heavyweights because their core focus is something else. Moreover, there will be investments not just on the buying EVs front but there will be additional investments in the form of regular salaries, insurance and a lot of other things as well.'
Cash-burn For A Better Future
The start-up claims to have a positive cash flow on the operations side at the moment. However, the founder does not shy away from admitting they would need funds to deploy the aggressive expansion plans for the next two years. These plans include investing in better tech, buying EVs and expanding the team count from 45 to around 200 people.
'We require a decent amount of Capex for the expansion process. There would be a cash-burn in the process to scale-up. The new tech we are developing is based on what we are learning on the ground level,' shared Rao.
Zyngo EV Mobility also has plans to move from an asset-light model to a model where the start-up wants to invest in EVs and deploy them onto the logistics platform. The start-up will be initiating the first phase of this model before the end of this year. Rao claimed that Zyngo EV Mobility will be sharing the developments around 'funds raised' by August 2022.
'The target is to enable 2.5 to 3-million deliveries using EVs every month. We will do the same via onboarding more drivers and also investing in our EVs. We will also be expanding our services to more cities in India,' concluded Rao.