India is at the cusp of witnessing the most prominent transition in the automotive space – that of the traditional Internal Combustion Engine (ICE) driven market to a new era of EVs. The pace of EV adoption, though slow, is steady. Post witnessing a small dip in sales in FY2021, EV sales surged more than 200% in FY2022. In fact, FY2022 was the first year that witnessed EV sales accounting for 3% of the overall vehicle sales in India.
Taking into account the current growth trend, it is estimated that there will be 5 crores of EVs on Indian roads by 2030. E-two wheelers alone will account for 70% of total EV sales by then on the back of the availability of suitable charging options – both home and battery swap; prices of EVs achieving parity with that of ICEs; and their promising use in delivery services as well.
However, to support this humungous growth in EV adoption by 2030, a simultaneous increase in the availability of charging infrastructure, of the order of 20.5 lakh, will be required. Currently, the number of charging stations is too less, with an order of approximately 32 EVs per charging station in India.
There has been little movement on establishing charging stations under the FAME schemes and by key industry players as of now. However, the target for 2030 seems achievable considering that the establishment of 5 lakh charging stations is already in the pipeline by various charge point operators as well as oil marketing companies in addition to various centre and state-led initiatives. Andhra Pradesh and West Bengal, for instance, have laid down targets for establishing 1,00,000 charging stations each by 2024 and 2026 respectively.
In terms of charging requirements, E2Ws will primarily use public charging stations for top-up charging only. E3W drivers will use captive charging stations for their cargo vehicles to a large extent, followed by public charging stations while on the go. In terms of the type of charging, India’s EV market currently has limited capabilities for fast-charging EVs. However, going forward, public fast charging, complemented by AC chargers of capacity ranging from 3-22kW at workplaces, shopping malls, and restaurants will be needed to support the charging infrastructure in India.
Massive steps need to be undertaken for the installation of charging stations in India to overcome the chicken-and-egg problem the EV sector is facing today.
- All the new home and workplace parking areas should be mandated to have a percentage of overall parking space as EV-ready.
- Even petrol pumps need to be mandated to have at least one charging station on their premises.
- Further, policies could consider capping rental costs for public charging stations, making the availability of land banks easier and leasing costs slashed, and establishing a charging infrastructure investment facility funded by public money, say partially.
- Setting up a charging station, being a capital-intensive exercise with no immediate returns requires financial assistance. The creation of a fund specially curated for Charging Infrastructure is therefore required to lower the initial CAPEX for setting up the business and cover the associated risks. One such instrument is viability gap funding capable of reducing the overall cost of operations of the business.
With the above steps, the charging infrastructure in India will ramp up and with this will ramp up the EV sales in India.
