EV Charging Infrastructure in India – current status, challenges and way forward

Cover image credit – Volttic EV Charging Solutions

Current status of electric vehicle market in India

The below chart shows the EV sales in India from 2016-2021. The highest EV sales from the 3W segment on account of the rapid proliferation of e-rickshaws which serve as an economical option for last-mile connectivity. The second highest EV sales are from the 2W segment. Similar to the 3W segment, electric 2W sales are being driven by low-speed 2Ws. Increasingly, the products in the high-speed 2W segment are posting competition to ICE 2Ws, especially with the recent increase in FAME incentives for the segment.

The electric 4W segment, while making up for a relatively small size in terms of annual units sold has started to register good growth this year. TATA Nexon EV alone sold more than 1,000 units in August 2021. The number of total EVs registered in 2021 so far has already surpassed last year’s total registrations, according to data in Vahan Portal.

There are still several challenges to EV adoption in the country – slow deployment of charging infrastructure is one of the key impediments.

Types of EV Charging Infra options in India

In India, the majority of EV Charging Infrastructure is around Plug-In Charging Stations and Battery Swapping. Plug-in charging stations are being set up to cater for all types of vehicle charging requirements. The battery swapping business targets the 2W and 3W segments.

Setting up an EV Charging Station in India – Considerations and RoI Estimate

Plug-in charging infrastructure status

As per the data published by Central Electricity Authority, there are 927 public charging stations in India, as of 30th June 2020.

Department of Heavy Industries sanctioned 3,397 charging stations under FAME-I & FAME-II. Under FAME-I, 427 charging stations were established in different cities of India. This number also includes charging stations established on some well-known highways connecting major cities.

Under FAME-II, 2,877 stations have been sanctioned with the target of PAN India coverage. The top 5 states (Maharashtra, Tamil Nadu, Gujrat, Andhra Pradesh and Madhya Pradesh) have been allocated with ~48% of total charging stations under FAME-II. Effective implementation of these charging stations is likely to positively impact the consumer sentiments towards apprehensions about charging vehicles and range anxiety.

Furthermore, the Government has declared setting up a PCS (public charging station) as a de-licensed activity and has allowed private charging at residences and offices. These changes were brought into effect by the Ministry of Power in Dec 2018. A big push to the public charging infrastructure has been provided by Public Sector Undertakings who are leveraging their existing infrastructure to build public charging facilities.

Policies and subsidies for charging infrastructure

The government has formulated financial and non-financial schemes including capital, tax and sell-side incentives for EV Charging Infrastructure players.

Summary of central and state EV Policies

Total INR 1,000 Cr has been allocated under the FAME II scheme realizing the need for faster development of charging infrastructure. Up to 100% funding is allocated for setting up charging infra at central or state govt offices. State governments have also announced incentives on charging infrastructure basis their vision of EV penetration. It should be noted that electricity incentives are only valid for public charging stations and not for captive infrastructure.

Key Issues around Charging Infrastructure Ecosystem

Some major issues are lack of connector standardization, no common APIs mapping charging infrastructure across the country, telecom provider dependent connectivity and issues with discom infrastructure, including power outages, voltage fluctuation and absence of net metering.

EV charging Infrastructure financing – In addition, projecting cashflows for charging stations is a major concern for financial institutions due to the limited utilization of chargers. To evaluate an EV charging project, the financier will evaluate the projected cash flows and risks associated with the project. At present, for a PCS, there is typically a large outflow, including the capital expenditure, grid connection cost, energy cost, debt servicing, the land fee (if any), as well as operations and maintenance. The projected cash inflow requires EV growth rate assumptions which are highly dependent on state and national policies, availability of vehicle models in the market, consumers awareness and emergence of charging business models.

Way forward for India

Overall the charging infrastructure development needs to speed up to boost consumer confidence in EVs, especially for personal use. Unique business models such as last-mile delivery in the 3W segment make charging and swapping viable due to very high utilization. As India’s EV ecosystem is constantly evolving, the following are various co- existing and competing product and business model options for the future.

This article was first published in EVreporter September 2021 magazine.

Also Read: EV Charging Solution Providers in India

About the author

Preetesh Singh, Manager at Nomura Research Institute Consulting and Solutions India. He can be reached at preetesh.singh@nri.com Extensive contribution by Shravan Banot, Deputy Senior Consultant at NRI