EMobility+ got an opportunity to interview Randheer Singh – Director, Electric Mobility & Senior team member for Advanced Chemistry Cells Program, Niti Aayog, and learned about his view on the EV charging infrastructure in India and how it can be strengthened more. He also gave us insights on India’s EV financing and technology and the FAME 2 extension.
1. What is your view on the current EV charging infrastructure in India? How can it be strengthened more?
EV charging infrastructure is a very interesting part of the overall EV ecosystem, and it’s very important to understand the EV segments and their associated charging needs in India. The market is dominated by e 2Ws/3w combined around 83%, and these vehicles on an average ply 17-20 km/day. FAME II’s approved range of a minimum of 80 km, means that you don’t need to charge them on daily basis. Further, these vehicles can be charged overnight at home from 5A/15A plug points in residential areas. In addition to this, the focus has to be now more on charge points rather than charging stations. Charging stations are costly, mostly cater to 4w, and are costly to operate too. This doesn’t mean that we don’t need a widespread public fast-charging network, that is also very critical and gains more prominence when considering other use cases such as passenger cars, ride-hailing services, final mile deliveries via 2-3- and 4 wheelers and also buses and trucks. These use cases warrant longer daily driving distances and will require a robust fast-charging network. FAME II already allocated INR 1000 crore for charging infrastructure investment over three years, which will be applied to charging stations sanctioned as per the Ministry of Power’s “Charging Infrastructure for Electrical Vehicles – Revised Guidelines and Standards” document. This MoP document also outlines guidelines to set at least one charging station in a grid of 3*3 km and one station every 25kms on both sides of all highways. Also, one fast-charging station every 100km for long-range EVs like buses and trucks is also being included.
Charging infrastructure can further be strengthened if private players work on interoperability, feasible business models (including the battery swap), and discoms sweep this opportunity to lead in the power storage business for batteries. I have released a handbook along with ministries and WRI on EV Charging infrastructure a month back. Now we are working on bringing out the guidelines for residential charging, which will be a game-changer.
EV charging infrastructure is a very interesting part of the overall EV ecosystem, and a holistic approach is needed to create a seamless charging experience for consumers. For this, we need to understand the use cases of the Indian EV market, which is dominated by light EVs. E-2Ws and e-3Ws comprise about 83% of EVs in the country, and these vehicles can be charged using 5A/15A plug points at home or using low-power public charging points which do not need heavy ancillary electrical grid infrastructure. Charging points are affordable the light EV AC charging standard recently released by BIS is estimated to cost only INR 4,000, which is more than 10 times cheaper even than the AC-001 charger. They can also be located anywhere with available parking and a single- or three-phase electricity connection.
This doesn’t mean that we don’t need a widespread high-powered public fast-charging network. That is also critical and gains more prominence when considering other use cases such as passenger cars, ride-hailing services, light commercial vehicles, and buses and trucks. These vehicles have larger battery capacities and longer daily driving distances, which will require a robust fast-charging network. The FAME II scheme has already allocated INR 1000 crore for charging infrastructure investment over three years, which will be applied to charging stations sanctioned as per the Ministry of Power’s “Charging Infrastructure for Electrical Vehicles – Revised Guidelines and Standards” document. This MoP document also outlines guidelines to set up at least one charging station in every 3*3 km grid and one charging station every 25kms along highways. Also, one fast-charging station every 100km for long-range EVs like buses and trucks is also included in the guideline requirements.
Charging infrastructure can be further strengthened if private players work on interoperability and feasible business models (including battery swapping) and if DISCOMs seize this opportunity to develop the energy storage business using EV batteries. I have released a handbook along with ministries and WRI India on EV Charging infrastructure a month back. Now we are working on bringing out the guidelines for residential charging, which will be a game-changer in terms of EV charging access.
2. What are some barriers to EV financing in India and how can they be tackled?
In March this year, I authored a report on EV Financing that tries to bridge the gap between the requirement and availability in terms of electric vehicle finance. The biggest barriers to EV financing are unavailability of credit history of buyers (e-rickshaws, first-time buyers of 2wheelers, etc.), need for additional collateral, underdeveloped secondary market, uncertainty around vehicle resale price, and continued doubts over battery life (which comprises 40% of the vehicle cost). All these factors result in higher loan interest rates (24-40%) and low LTV (loan-to-value) ratios.
To tackle these, OEMs (both battery and vehicle) have to come together and work with banks. The recent schemes of assured buyback by players such as Ather Energy, and an 8-year battery warranty by TATA Motors, are welcome initiatives. There are also various NBFCs and fin-tech players coming in to serve the EV financing requirements, and OEMs have also started entering into leasing agreements with fleet operators to get their EVs on the road. However, established players have been slow to enter the EV market, especially for commercial vehicles, and their scale is needed to accelerate the adoption of EVs in high-impact use cases such as passenger and cargo fleet operations. From the policy perspective, putting the EV sector in PSL can support low-cost capital available for this sector. In addition to this, government efforts towards some credit guarantee mechanisms can also help de-risk the sector and give a much-needed boost to EV financing.
3. How do you see EV technology evolving in the coming years?
In terms of evolving technology, the chassis side is already highly developed (as it is adapted from ICE Counterpart mostly). In terms of the battery, currently, the market is dominated by Lithium-based cells and this will continue for at least the next 5 years. The commercialization of other cell chemistries such as sodium ion, Solid-state, supercapacitors, Zinc-air, Lithium Carbon, Flow batteries will take some time before they reach the Giga scale manufacturing. It has been established that to achieve the economics of scale, around 5-7 GWh is the minimum capacity requirement for cell manufacturing. Hence ACC program of GoI is designed in such a way so that the Advanced cell chemistries can foray into the Indian market and also bring about localization. The ACC program has mandatory localization conditions and specifies a minimum capacity to be quoted at 5 GWh. With newer and advanced chemistries, batteries will have a higher energy density, which in turn will lead to longer ranges of EVs.
Further, PLI for Auto also specifies the incentives for Advanced technologies mainly focussing on EV. This will further help in the development of electric drivetrains, motors, and other High voltage electronics in the country. I see a hybrid cell model with different EV Battery technologies taking over in coming years for optimum performance.
4. With the FAME scheme getting extended further till 2024, how do you see it impacting the EV ecosystem in a positive way?
The last two years are almost washed away in COVID and hence the fruits of the policies could not be borne during this period. The FAME comes with the conditions of a Phased manufacturing program and hence certain localization requirements for the companies to qualify. This needs development and testing time, before being released. Hence the extension is much needed. Having said that, the remodeled FAME II has many changes and this will result in focussed and well-defined promulgation of EVs in the country. Apart from the 2024 extension, the scheme has also changed the subsidy structure for e-2w. The amount has been increased to INR 15000 per kWh with a cap of 40% of the total vehicle price. For e-3w and E-Buses, the aggregation models have been adopted and EESL has been appointed as executing agency for the same. In fact, for e-3w the bids are already opened by CESL (EESL’s subsidiary) and have seen the prices coming down up to 20%. E-Buses will now be deployed under FAME II remodeled scheme in 9 lighthouse cities with a 4 million-plus population.
Above initiatives and actions have given much-needed fiscal and non-fiscal incentives to the industry (several states have released their EV Policies, which give added incentives).
5. What change in the mindset and attitude would you like to see in the industry for the overall benefit of the Indian EV ecosystem?
Most of the automotive players have already taken steps in this regard and changed their hardliner approach. However, still few things such as the availability of EV models that can satisfy the multitude of use cases for the customer in all segments is still not adequate, the innovation and transition to EV manufacturing from some 2w & 4w manufacturers is a little slow. We are seeing emerging start-ups who are leading the way in EV charging, but we also need established players or incumbents to start making changes to their business models and offerings I must say with almost 7.5 bn USD committed by the government (FAME II, ACC, Auto PLI together) and several non-fiscal incentives such as waiver to the registration fee, etc, plus EV Policies by states, plus the COP26 and SDG goals, the industry should not be in a dilemma of whether this change will happen or not. The shift to green mobility is imminent and they should adopt this fast so that our country can move fast in transition to clean mobility.