India’s logistics and supply chain networks are on the cliff of a transformation. With the exponential growth of e-commerce and quick commerce reshaping traditional supply chains, the spotlight has primarily been on the last mile. However, an equally critical segment is now emerging as a pivotal link—the middle mile.
The middle mile, which bridges the gap between suppliers and consumer delivery points, is gaining attention as the backbone of logistics infrastructure. As dark stores move closer to consumers to reduce turnaround times, the demand for frequent, efficient restocking has surged. This shift has brought the middle mile into focus as a space ripe for innovation, particularly through the integration of commercial electric vehicles (EVs).
India is already the fastest growing economy with an average increase in gross domestic product at 5.5 percent over the last 10 years. A report anticipated that India will grow to $26 trillion by FY48, with the transport and logistics sector serving as a critical support system for achieving this rapid growth over the next 25 years.
With the cold storage grocery market poised for rapid expansion—projected to grow at a CAGR of 19.55% to reach INR 1,834.66 billion by 2028—tier 1 and tier 2 cities are seeing increasing demand for efficient logistics solutions. The rising need for warehouse accommodation and commercial retail properties is creating opportunities for innovation, particularly in middle-mile logistics.
The inflection point for EV adoption
The middle mile plays a pivotal role in ensuring the seamless operation of last-mile delivery hubs. Dark stores, which focus on optimizing capital and inventory turnover, rely on frequent restocking to maintain their operational efficiency.
According to an Autobei Consulting Group Report, small commercial vehicles (SCVs) and light commercial vehicles (LCVs) have emerged as the ideal solution for middle-mile logistics, striking a perfect balance between payload capacity and volumetric loads. These vehicles offer the frequency and quantity needed to maintain efficient supply chains for e-commerce and quick commerce operations.
As battery technology advances and costs decline, last-mile segment has already seen a surge in the adoption of 3-wheeler and 2-wheeler EVs. The middle mile segment is also seeing an increase in adoption of e-SCVs and e-LCVs as OEMs are now launching products as well in this segment.
Key factors contributing to this inflection point are:
- Falling battery prices: Advancements in battery technology have led to significant cost reductions, making EVs more accessible and economically viable for commercial use
- Technology maturity: The EV industry has achieved a level of technological maturity that addresses many of the challenges faced by commercial vehicles, such as range, durability, and charging infrastructure
- Diverse applications: Middle-mile logistics involves a wide range of use cases, requiring vehicles that are versatile and capable of handling varied payloads and distances.
Key drivers of growth
With falling battery prices and technology maturity that has reached in EVs, these segments anticipate some disruption in the coming year. The segment required longer product life as 4W CVs run for 10-15 years. Several macroeconomic and policy factors are accelerating the evolution of middle-mile logistics:
- Urbanization and e-commerce/quick commerce boom: The rapid urbanization of India and the exponential growth of e-commerce/Quick Commerce have amplified the need for efficient middle-mile logistics solutions
- Government initiatives: Policies like FAME II and the Production Linked Incentive (PLI) scheme are providing crucial support for the EV ecosystem
- Infrastructure development: With investments in charging networks by the govt and private players and increase in fast charging technology, middle mile is set for electric disruption.
- Sustainability goals: Businesses are increasingly prioritizing sustainability, and the adoption of EVs in middle-mile logistics aligns with their environmental objectives
Challenges and opportunities
Businesses focusing on tailored solutions for the middle-mile segment are well-positioned to lead this transformation.
Additionally, these vehicles must balance durability and adaptability, pushing manufacturers to develop innovative designs. These challenges give companies a chance to stand out with better products and services. Setting new standards in the industry by meeting the specific needs of the middle-mile segment, and getting more people to use EVs in logistics will shake up the middle-mile segment.
The rise of middle-mile logistics signifies a turning point in India’s journey toward a sustainable and efficient supply chain. As e-commerce and quick commerce continue to evolve, the demand for reliable and eco-friendly logistics solutions will grow exponentially. India’s quick-commerce industry, for instance, is expected to reach $9.95 billion by 2029, growing at a CAGR of over 4.5%. Companies that innovate in this space will shape the future of shopping and delivery, bridging the gap between sustainability and operational efficiency.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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