Huge changes are finding their way into the commercial vehicles market. It is not just the CVs that are changing but even the drivers driving them, who are being inclined to learn recent technologies associated with CVs. We see this transformation happening at a rapid pace. Paritosh Gupta, Sr Analyst, Medium and Heavy Commercial Vehicle Forecasting, S&P Global Mobility (formerly IHS Markit Automotive), throws light on the electric impact on CVs, making commercial vehicle drivers more tech-savvy and how collaboration can help the industry turn around.

The commercial vehicles (CVs) market has incredible potential still unexplored. In fact, industry experts cite that the demand for CVs will go up and is heading for immense growth. And why not, especially when the industry has great opportunities for modernisation, and connectivity and data being a substantial focus. And, of course, we cannot forget the biggest trend, not just in CVs but the overall automotive industry, that is electric vehicles (EVs). 

Focusing on medium and heavy commercial vehicles (that are about six tonnes in weight), which usually includes all the trucks and buses, Paritosh Gupta, Sr Analyst, Medium and Heavy Commercial Vehicle Forecasting, S&P Global Mobility, too, explains that in terms of MHCVs, the biggest trend right now is the great amount of electrification going on in the bus sector, which is primarily led by the demand from the government side. “There are a lot of tenders by CESL and EESL, who have announced that they are planning to onboard around 50,000 electric buses in the next five to six years, something we are looking forward to,” he informs and goes on, “Besides, there is a lot of demand for tipper trucks due to the increased construction activities going on across the country – especially the highway and infrastructure projects that the government has undertaken.”

Gupta further mentions that there is a lot of pent-up demand in the market, which the industry really sees driving the market forward – that is expecting anywhere between 18-22 percent of growth.

E-pickup trucks
Speaking of electrification, it is well known that most major truck manufacturers have planned electric pickup trucks. We even find industrial giants like Tesla and Toyota venturing into e-pickup trucks. In such a case, the most popular pickup truck – when it comes to electric pickup trucks – is the Rivian, Gupta tells us. “India, however, does not have electric pickup trucks as of now, and many of them are in the US. Moreover, these pickup trucks are not pickup trucks in the commercial vehicle sense. Plus, these trucks happen to be expensive in comparison to conventional pickup trucks, especially the ones used in the commercial space,” he says.

Gupta further opines that there might be a few launches of electric pickup trucks here and there, but it will take a while for them to become common.

Last-mile deliveries
We also see that last-mile deliveries have been transitioning to EVs from internal combustion engine (ICE) vehicles lately in India. Sharing more on this, Gupta tells us, “In terms of last-mile deliveries transitioning to EVs, it is still a small percentage of vehicles. Even metro cities like Mumbai or Delhi will not have a sudden surge of vehicles transitioning to EVs, because EVs have many restrictions even today. Yes, it is happening but at a gradual pace, and it will not happen overnight.”

However, this transition is bound to happen in any case, especially with the targets the government is making; for example, the CAFE norms, he adds. “So, every major manufacturer will have to have some sort of EV in their portfolio to adhere to those norms. And if they need to continue to sell vehicles that are diesel- or gasoline-powered, in higher numbers, then they need to have something to offset those emissions,” says Gupta.

“Small commercial vehicles – which operate in last-mile connectivity – are the low-hanging fruits here, because they do not need that big a range; these vehicles ply 10 to 12 to 14 hours a day and have an extremely limited range requirement. They do not travel 600 or 700 kilometers a day and can go into their hubs at night and get charged,” Gupta further shares.

Delhi government's move to curb pollution
The whole EV scenario, whether private vehicles or CVs, comes with the objective to head towards a better environment and to control pollution. The Delhi government, too, has restricted the entry of heavy and medium commercial vehicles from October 2022 to February 2023 to limit pollution – a move that has been opposed by truckers and traders.

“This move has come about in the past as well, on immediate notice. Only this time, it has come earlier,” Gupta points out and goes on, “While the truckers and related associations are opposing this move, they also need to consider the fact that CNG-powered vehicles have not been stopped and are allowed to enter the city. Furthermore, the transport hubs, which are already present at the Delhi border areas, will come in handy. And lastly, last-mile connectivity in Delhi is already CNG-powered; therefore, that should not be a
problem."

“Hence, the only factor that we need to look after is the movement of heavy trucks within the city, which is not much and already takes place through CNG-powered trucks,” Gupta puts across and adds, “So while it won’t affect the overall movement of the cargo, it certainly will raise logistics-related costs.”

The logistics
That being so, the growing logistics demand of businesses in India needs to be addressed efficiently, particularly with last-mile logistics growing tremendously. But how?

“In terms of long-term hauling, artificial intelligence (AI) and machine learning (ML) definitely have a role to play here,” Gupta asserts and continues, “Secondly, the improvement of roads, infrastructure and driver assistance systems will play a significant role as well. In fact, digitalisation and connected tech will play a particularly good role in improving this sector’s efficiency and the TCO for the fleet owners. If we look at the upcoming transport operators, we will see that they are now using AI and ML to route maps for a particular truck. Therefore, one thing that is for sure is that technology is going to play a significant role here.”

Making drivers more tech-savvy
Turning his attention further to another element – the drivers – Gupta elucidates, “The drivers in India lack the understanding of the modern systems that are present in the vehicle. In fact, when I was recently at a conference, I was discussing the uptake of connected tech in terms of trucks and buses. So, a gentleman over there shared that we can put whatever we want in a truck (and it’s not like the fleet owners are not willing to pay for it; they will pay for it because they know the benefit of these technologies). However, the problem is that the driver is not going to use the technology to benefit the fleet owner.”

“Therefore, we need to educate the drivers towards these technologies and how they can be beneficial, not just to the fleet owners but to the drivers themselves,” Gupta explains.

Autonomous trucks – what is it going to take?
While educating the drivers about innovative technologies is important, we dream of driverless vehicles, aka autonomous vehicles, too. Sharing his views on this, Gupta cites, “I do not see autonomous trucks in India at least in this decade or till early next decade. There are a few reasons behind this. Firstly, autonomous trucks need the infrastructure and roads to be adherent to standards so that the right calculations are being referenced, and they can ply on the road.”

“Secondly, it’s the legal landscape,” he goes on, “Even today in the US, where several autonomous trucks are being evaluated, the legal framework has still not been set up. So, in case of an accident, who should be held responsible? A human driving the car? The autonomous truck? Or the software providers? Hence, there is a lot of ambiguity around the legal landscape, which is the biggest problem we have right now when it comes to autonomous trucks making a place in the market."

“But what’s certain is that autonomous trucks will change the face of logistics, but only once they become a mass market reality,” Gupta further adds, “So while we have technologies that are being worked upon in order to make this a reality (with a legal framework in place), what needs to be seen is if having the autonomous truck on the roads is going to be viable and a mass market solution. Because in CVs, it’s not the customer preference that drives the buying decision – it’s the total cost of ownership and the profitability of that particular vehicle that drives that decision at the end of the day.”

Collaboration in the CV space
Another factor that can drive the future of CVs and autonomous logistics is collaboration. And collaboration is already happening in the space of CVs.

“In fact, conventional OEMs are either acquiring or investing in new-age start-ups to improve their efficiencies and expertise in the modern technologies in the market,” Gupta shares and goes on, “Therefore, collaborations are definitely the key to solving the problems of the future.”

“In addition, we also see that collaborations are going to happen between OEMs and software providers, OEMs and the government and trade bodies and so on," he further tells us and says, “Thus, all these collaborations are needed to produce actual and viable solutions that are sustainable over the long term. The most prominent collaboration, according to me, will be OEMs investing in start-ups on the line of EVs. Under this, we could also count infotainment, driver systems etc.”

The role of OEMs in CVs
In truth, OEMs, too, can play a significant part in transforming the CV sector. Gupta highlights that the biggest way in which OEMs can contribute to the CV sector right now is by improving the connectivity of their vehicles and including a lot of connected tech. “This way, fleet owners have access to their vehicles all the time,” he states and adds, “Plus, there is also the data analytics part – we see a lot of data coming from the trucks and logistics space, which we can analyse. This will help to work on improving the efficiency and finding the bottlenecks where the truck and logistics space is facing problems.”

A turning point
The Indian CV sector, in spite of all the hurdles it has faced – from the Covid waves to the chip shortage – has performed very well. Identifying problems and removing them needs a lot of data, for which we need connected tech for our CVs. EVs are the biggest automotive trend right now, and we are glad to see CVs inclined towards that trend.

Therefore, bringing in not just the latest technologies but everything we can think of that can help India’s CV sector flourish, truly will. That means collaboration, digitalisation, the OEMs doing their bit and even the legal aspects of it. With agility and the right innovation, the Indian CV industry is certainly heading towards a turning point.