Electric Cargo EVs: Powering India’s Last-Mile Logistics

In India, electric cargo is picking up the pace and has shown acceptance among the OEMs as well as the customers. Largely post-COVID, the scenario for Electric L5–cargo has changed in the market largely due to

  • Immense boom in the e-commerce segment leading to an upsurge in the demand for high-speed electric cargo vehicles due to lower TCO and maintenance costs.
  • EV financing platforms – now that the EV segment has become mainstream, many platforms, including banks and OEMs started giving out loans and various customized financing models to make EVs more affordable.
  • The entry of established ICE brands in this segment could be considered a turning point in the electric cargo segment, with Bajaj launching in June 2023 and recording sales of 4,717 units in FY2025. TVS is also planning to enter this segment later in FY2026.

Fig 1: Electric cargo (E3W L5- Cargo and Goods carrier) Sales trend and Penetration (FY2023-FY2025)

cargo graph

Source: Vahan Dashboard, JMK Research

In the electric cargo landscape of India, it seems that the L5 electric cargo segment is shaping the cargo market, experiencing a CAGR growth of 29.46% between FY2023 and FY2025. However, it experienced a year-on-year decrease of sales of 15% compared to FY2024, which could be due to reduced incentives at the rate of INR 2,500 per kW, up to a maximum of INR 25,000 per unit under the PM E-Drive scheme. This represents half of the initial subsidy that the Ministry of Heavy Industries (MHI) provided to encourage the use of locally manufactured E3W (L5) units.

In the L5 E3W cargo segment, Mahindra captures most of the market with a 26% share in FY2025 due to diversified product ranges, and Bajaj captures 17% due to the trust and brand naming already persisting among customers.

  • Mahindra leads with 62% EV penetration in FY2025, driven by affordability, reliability, and early mover advantage under FAME II and state incentives.
  • Bajaj’s 2023 entry reshaped the market, reaching 9% penetration in FY2025 and 361% YoY growth in FY2025 compared to FY2024, leveraging strong ICE brand trust

While the E4W goods carrier segment has experienced a CAGR growth surge of 729% between FY2023 and FY2025 and a year-on-year growth of 9%, it is still struggling when compared to L5-E3W cargo. Tata Motors holds the largest market share at 61% in FY2025. Overall, the E4W goods carrier segment is still facing challenges in expanding its presence in the electric cargo market. Sales of E4W goods carriers are low in comparison to L5 E3W cargo segment broadly due to:

  • Higher CAPEX: Four-wheeled electric vehicles generally have a higher initial price point compared to three-wheeled models
  • Limited maneuverability: Larger vehicles like E4Ws may struggle with navigating narrow streets and congested areas.
  • Infrastructure limitations: The availability of charging infrastructure for larger vehicles, especially in urban areas, can also be a limiting factor.

Below is the snapshot of product ranges of the market-holding OEMs in the electric cargo segment-

Table 1: Product details of Leading OEMs in Electric Cargo segment

cargo table

Source: Company website, JMK Research

In the coming years, India’s booming e-commerce sector is set to make electric cargo vehicles a core part of last-mile logistics. Especially in Tier 1 cities, the growing adoption of services like the “porter system” — used by fleet operators to help consumers move goods within cities — is driving up demand for efficient and sustainable transport solutions. This momentum is further supported by central and state-level incentives, including the recently approved Maharashtra EV policy. The policy sets bold targets for 2030, aiming for 30% of all new vehicle registrations to be EVs and 50% adoption among fleet operators and utility vehicles in urban areas. Together, these factors are paving the way for electric cargo to become a key pillar in India’s clean mobility transition.