EV Charging Landscape: Market overview and opportunities

Market overview and opportunities

India’s electric vehicle (EV) market is growing by the day with over 1.3 million EVs as of July 2022. Although the share of EVs as a percentage of total vehicles on Indian roads is just 0.5 per cent, it is increasing consistently on the back of a surge in EV sales in recent years. In the past five years, EV sales have grown by seven times. With increasing sales, charging infrastructure development is also gai­ning momentum driven by central go­vernment programmes, particularly the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) sche­me, as well as initiatives by public and private players, including oil marketing companies. Power Line takes a look at the EV charging infrastructure market and rece­nt developments…

Market overview

EV sales have grown considerably over the years – from 56,399 in 2016-17 to 428,213 in 2021-22 – recording a CAGR of nearly 50 per cent. As of April 2022, there were a total of 1,742 public charging stations (PCS) in the country. In terms of sales, 17,520 units of EV chargers were sold in the country aggregating to a capacity of 201.5 MW in 2021, as per data from Customized Energy Solutions. This includes chargers supplied by EV original equipment manufacturers,  and procurement by PSUs, commercial fleet operators, bus operators and charging service providers.

There are various modes for charging EVs – private, public, captive and battery swapping. Private charging is typically carried out on residential premises wh­ile public charging infrastructure is at pu­b­licly accessible locations. Captive chargers are the ones installed at gover­n­ment offices, corporate houses, etc. and operated by commercial fleets such as electric cars and buses. Meanwhile, battery swa­pping involves replacing discharged electric batteries with ch­arged batteries. Further, charging infrastructure can be classified into alternating current (AC) and direct current (DC) types. AC chargers are further divided into light EV (LEV) charge point (for e-scooters and rickshaws), Level-1 AC ch­arger and Level-2 AC charger. DC chargers are segregated into Bharat DC-001, CHAdeMO and CCS2. Of the total EV ch­arger sales in 2021, the majority was acco­unted by Le­vel-2 AC chargers which are typically supplied with passenger electric four-wheelers as well as installed by PSUs and charging point operators for PCSs. Meanwhile, CCS chargers were mainly utilised for captive charging electric buses and fast charging PCSs.

Update on FAME-II

FAME is the central government’s flagship scheme for promoting EVs and the development of charging infrastructure. Launched in 2015, Phase I of the scheme ended in March 2019 while Phase II is currently under way. In April 2021, the Ministry of Heavy Industries (MHI) ex­tended  FAME Phase II (FAME-II) by two years. Earlier, the implementation of the programme was planned over a period of three years from April 1, 2019, however, it will now be in force up to March 31, 2024. Certain amendments were notified to the scheme, including a specific demand incentive for electric two-wheelers of Rs 15,000 per kWh in place of a uniform demand incentive of Rs 10,000 per kWh for all vehicles. In addition, the cap on incentive for electric two-wheelers was raised from 20 per cent to 40 per cent of the total cost of vehicles.

Under Phase I of FAME, the MHI sanctioned 520 EV charging stations, of whi­ch 479 were installed as of July 1, 2022. Under Phase II, the ministry has sanctioned 2,877 EV charging stations in 68 cities spread across 25 states/union territories. As of July 1, 2022, 50 charging stations have been installed. Also, the MHI has sanctioned 1,576 EV charging stations across nine expressways and 16 highways. Under FAME-II, Rs 10 billion has been allocated for the development of charging infrastructure.

Recent policy developments

The Ministry of Power released the Charging Infrastructure for Electric Vehicles – Revised Consolidated Guide­lines and Standards on January 14, 2022. A key provision in the guidelines is that EV owners can now charge their ve­hicles at their residence/workplace using their existing electricity connections. In addition, any individual/entity is free to set up PCS without requiring a licence, provided the stations meet the technical, safety and performance standards and protocols.

In addition, the land available with the government/public entities will be provided for the installation of PCSs to other government/public entities on a revenue sharing basis at a fixed rate of Re 1 per kWh. The rate will be paid to the owner of the land on a quarterly basis. Such agreements may be initially entered into by parties for a period of 10 years. The same model may also be adopted by a public agency for providing land to a private entity. In this case, a PCS will be allotted on bidding basis, at a floor price of Re 1 per kWh. Charging stations will be re­quired to tie up with at least one online network service provider to enable ad­vance remote/online booking of charging slots. Online information provided to EV owners should include the PCS location, type and number of chargers install­ed/ available, and service charges for EV ch­ar­ging. Obtaining electricity via the open access route is allowed, and any PCS/ chain of charging stations may obtain electricity from any generation company through this route.

The guidelines state that at least one charging station must be available in a grid of 3 km x 3 km, in a bid to remove range anxiety. Furthermore, one charging station must be installed at every 25 km on both sides of highways/roads. For long range and heavy duty EVs, there must be at least one fast charging station every 100 km. These should be set up on each side of highways/roads, preferably within or alongside the PCS.

Further, in Union Budget 2022-23, the finance minister announced the goverment’s intent to launch a battery swapping policy. Sub­se­quently, NITI Aayog drafted a battery swapping policy on April 20, 2022. As per the draft policy, battery swapping would fall under the battery-as-a-service mo­del, wherein customers can pay a regular subscripti­on fee at fixed intervals to service pro­viders for battery services throughout the vehicle life­time. Only ba­t­teries using advanced chemistry cells, with performance equivalent or su­perior to EV batteries supported under FAME-II, would be considered under the proposed policy. The policy would provide incentives for greater adoption of swappable batteries in EVs. The incentives available to EVs that come pre-equipped with fixed batteries will also be available to EVs with swappable batteries. The state governments are also required to ensure th­at PCSs are eligible for concessional EV charging tariffs. Such stations have be­en proposed to be brought under the existing or future time-of-day tariff regi­mes, to allow swappable batteries to be char­ged during off-peak periods when electricity tariffs are low.

Earlier, in May 2021, the central government approved the production linked incentive (PLI) scheme for manufacturing of advance chemistry cells (ACCs) in the country in order to bring down pri­ces of batteries and consequently redu­ce EV prices. In September 2021, the PLI scheme for automobile and auto components, which includes EVs with a budgetary outlay of nearly Rs 260 billion, was announced for a period of five years. The goods and services tax on EVs and chargers has also been reduced from 12 per cent to 5 per cent and from 18 per cent to 5 per cent, respectively.

The way forward

India needs about 400,000 charging stations to meet the requirements for the 2 million EVs that are expected to come on the roads by 2026, as per a Grant Th­ornton Bharat-FICCI report. Oil marketing companies have reportedly announ­ced the setting up of 22,000 EV charging stations in prominent cities and on national highways across the country. Of the total, Indian Oil Corporation Limited will install 10,000 EV charging stations, Bharat Petroleum Corporation Limited will install 7,000 and the remaining 5,000 will be installed by HPCL. Private companies such as Tata Power, Fortum, ChargeGrid, Volttic, ABB and Delta have also contributed to setting up EV charging infrastructure in India. According to ICRA, around 48,000 additional EV ch­argers at an investment of around Rs 140 billion will be installed over the next three-four years in India.

In sum, the recent policy initiatives and steps taken by private and public players in setting up EV chargers are expected to help in scaling up the country’s EV charging infrastructure considerably in the coming years.