Following the news that the Ministry of Road Transport and Highways India has allowed the sale and registration of electric two and three-wheelers without batteries;
Bakar Sadik Agwan, Senior Automotive Consultant at GlobalData, a leading research and consulting company, offers his view:
“The cost of ownership, along with the availability of adequate charging infrastructure, is a key factor for large-scale uptake of electric vehicles (EVs). While a customer indeed saves on fuel cost, the initial cost of acquisition is high because electric vehicles are costlier. Hence, India’s plan to allow selling and registering electric vehicles without batteries is a welcome move as it will result in significant upfront savings for customers. Under the plan, customers will no longer have to pay for the battery, which amounts to 30-40% of the overall cost at the time of purchase.
“Customers will now have the flexibility regarding how to procure batteries, which presents new business opportunities to OEMs, energy companies as well as other stakeholders in the battery charging and swapping infrastructure. The absence of factory-fitted batteries in EVs will proliferate new business models such as battery leasing and renting, and help in creating a dedicated ecosystem for battery supply, charging/swapping and servicing. Furthermore, shared mobility, logistics and delivery companies, which are leading the transition to EVs in India will gain significant cost-benefits if the new business models for batteries kicks-in.
“The move is over and above the existing demand incentives offered by the government under the Faster Adoption and Manufacturing of (Hybrid) Electric Vehicles (FAME). Two and three wheeler command significant market volumes in India. Increase in the uptake of electric vehicles will help the government achieve its ambitious targets regarding electrification.”