Red lights on green mobility as govt picks EVs over charging networks

By focusing on EV production over charging networks, the government may have delayed the mass adoption of clean energy transport

In prioritising electric vehicles (EV) over charging networks, India may have followed the wrong path towards creating an EV ecosystem, perhaps delaying its adoption. In the meantime, neighbouring China has taken a giant leap. 

After spending an entire afternoon at the showrooms of Ather, Okinawa, Hero Electric and BGauss in Chennai, assessing electric two-wheelers (E2W), Ramesh, a mechanical engineer working for a leading automaker in Chennai, was left with more questions than answers. His son preferred a zippy bike to get to the office but Ramesh was keen to interest him in a green vehicle. 

Ramesh had two concerns that reflect the issues faced by wannabe buyers of EVs in India: Recharging and running costs. After nearly three years of selling high performance e-scooters in Chennai, Ather, which offers a fixed battery with proprietary chargers, could offer only 27 public charging outlets in a sprawling metropolis. In the case of Okinawa's Praise+, Ramesh needs to climb at least 20 steps hauling a 16 kg unit to his apartment for charging overnight. Other batteries are lighter at 10 kg, but eat into the space that goes to store a helmet. Meanwhile, Ramesh’s wife complained about the possibilities of the battery catching fire at home while charging. 

According to Ramesh, the only appealing part of the EV experience, besides cleaning his conscience of polluting carbon, was the savings on running costs. 

True, Ather’s performance-oriented scooter cost Rs 160,000, a sum that would fetch his son a Suzuki Gixxer. But the daily home charging cost of Rs 20, sufficient to meet his daily commute, was much less than where a litre of petrol would take him. The battery, costing Rs 30,000-40,000, the biggest chunk of the vehicle cost, may need replacing after the three-year warranty. But even after factoring in this cost, Ramesh reckoned he could still halve running costs.

E-two-wheelers are expensive despite state subsidies, with much lower performance parameters than internal combustion engine vehicles, and public charging stations are sparse. India has around 1,100 public charging stations (PCS) compared to industry estimates of India needing about 1 million to 5 million such points by 2030. The government has allocated Rs 1,000 crore to sanction only 5,000 charging stations; 452 outlets were in operation as of November. That compares to electrification targets of 30 per cent for passenger cars, and over 70 per cent for two-wheelers and commercial vehicles by 2030 from less than 1 per cent today. 

“Range anxiety is a problem” for prospective consumers, said Hemal Thakkar, director, Crisil Research. It's a chicken and egg problem: Charging networks will thrive only if there are adequate vehicles plying but EVs will take off only after consumers see charging stations in their neighbourhood. Last year, China accounted for half of the world’s EVs at 3.2 million as consumers were comforted by a fast-growing charging network. India, by contrast, sold less than a tenth of China, that too predominantly low-value two-wheelers and three-wheelers.

Deloitte India partner and automotive leader Rajeev Singh, citing a 2,000-sample survey, said 76 per cent of Indians prefer charging at home, similar to China. The government should create an enabling system for companies to set up charging infrastructure, perhaps mandate provisions for charging infrastructure in building basements, Singh said. High rises and malls in the metros are ill-equipped to facilitate charging at basements. China deployed state utilities to speed up public charging but indebted distributors in India are ill-equipped for this exercise, Thakkar said. 

“Governments need to create markets for investments in batteries, digital solutions, and electricity grids that reward flexibility and enable adequate and reliable supplies of electricity,” said the International Renewable Energy Agency.  But the Indian administration found it easier to disburse federal incentives to a few automakers compared to mobilising municipal authorities, state governments and errant state utilities to come together to enable charging infrastructure. The government must also reduce the goods and services tax on charging services and batteries to 5 per cent from 18 per cent, the Confederation of Indian Industry (CII) has said.

Yet vehicle subsidies, disbursed under the second phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, have amounted to only a little over 10 per cent of the Rs 8,600 crore allocation, prompting a two-year extension of the scheme to 2024. Officials said that it underlines the slower adoption of EVs by consumers leading to lower pay-outs rather than the government’s inefficiency. Others attribute it to Aatmanirbhar Bharat rules. But just as consumers await a build-up in charging outlets before buying, EV manufacturers are waiting for more vehicle sales before they localise output. 

Eventually New Delhi issued guidelines for charging EVs last month, only to partly disown them a week later in the Budget when Finance Minister Nirmala Sitharaman said that “considering the constraint of space in urban areas for setting up charging stations at scale, a battery swapping policy will be brought out”. It’s odd that the government realised that space was a constraint just weeks after issuing the policy. 

Battery swapping has advantages in niche areas but India’s EV ecosystem is more amenable to a charging framework, said Awadhesh Jha, executive director, Fortum Charge & Drive India, a Nordic EV charging service provider. Fortum is setting up 3,200 fast charging points of 30, 50, and 100kw in 79 cities to serve 19,000 cars of commercial fleet operator Carzonrent. “As far as the commercial car industry is concerned, availability of or access to fast charging stations is critical for a successful operation,” said Rajiv Vij, managing director, Carzonrent India. 

Charging guidelines, including an interoperability framework, should have come out years earlier when transport minister Nitin Gadkari articulated India’s EV ambitions — enabling slow state operators, inefficient government entities, debt-laden utilities and municipal corporations to get their act together. It would also have helped standardise charging specifications across electric two-wheeler manufacturers. (Cars follow the global CCS standards).

The new charging guidelines and incentive structure are also skewed against private sector operators. Bids for a 70 per cent subsidy on chargers were awarded to state entities such as EESL, an industry source said. Private operators face issues such as delays and high costs when availing of a high tension (HT) connection from utilities even for a 50kw charger where a cheaper, low tension (LT) arrangement should suffice, CII said. State-set caps on service fees for charging, and high land costs in urban areas are concerns, CII said. 

Ramesh will pay Rs 18-20 per kwh to charge his vehicle at private sector charging outlets such as Fortum, more than twice that of charging at home. State-run PCS typically charge a rupee over the EV tariff rate levied by the utility. That puts private sector players such as Tata Power, Fortum and Magenta at a disadvantage. State oil companies have announced plans for 22,000 charging stations but limitations of land at gas stations and in congested metros slow installation.

Whatever be the obstacles or niggles along the way, New Delhi has at least turned its attention to charging. And that may put early adopters such as Ramesh at ease.