By Randheer Singh, Director, Electric Mobility, NITI Aayog
Climate change has forced the world to come together and chalk out an actionable roadmap to prevent further degradation of the environment. With the shift in global automotive supply chains, most global organisations are committing to net zero, alternative sources of energy to power machines and automobiles, and other requirements have become a priority. Land transport is a low-hanging fruit to tackle the urban air and noise pollution menace. Zero-emission vehicles offer a promising solution to get rid of tailpipe emissions and noise pollution.
However, the inherent issue with zero-emission vehicles is range anxiety. Unlike the internal combustion engine (ICE) counterparts, which have petrol bunks at every nook and corner built over a century, the electric vehicle (EV) charging network is still evolving. Further, due to large tank sizes, more kilometres can be covered with an ICE vehicle. The real penetration of EVs in India has happened in the past 1.5 years. Consumers still do not have much choice in terms of electric four-wheeler availability, and very few models and manufacturers have launched their offerings.
Having said that, the segment-wise requirements of charging infrastructure are different. Passenger electric two-wheelers will predominantly be charged at homes. Commercial electric two-wheelers and three-wheelers have a run of around 100-120 km per day, and therefore, they need a top-up charge once in a day. Looking at the idle time for commercial electric two-wheelers and three-wheelers, there can be destination-based AC charging. Locations like tea stalls, roadside parking, auto stands, metro parking, railway parking, hotels/dhabas, small shops, government housing societies, and facilities can be used for this purpose. Thus, a business model with such entrepreneurs can be evolved.
The Ministry of Power has already made EV charging a delicensed activity and this should pave the way for small entrepreneurs to become “chargepreneurs”. For buses, initially, depot charging (intra-city) will be the preferential mode (due to space constraints), and later opportunity charging will also evolve. Buses will need to adopt the hybrid model, wherein a partially removable battery can be inserted within a short time at selected locations. Besides, ultra-fast charging can be evaluated. Again, bus charging needs to be decoupled from bus original equipment manufacturers (OEMs).
As far as electric four-wheelers are concerned, passenger vehicles will mainly rely on home- and destination-based charging (office/home complexes), but the commercial ones need dedicated public charging or captive charging infrastructure creation. Owing to the high land costs, varied business models need to be evaluated wherein the top-up charging can be done (15-20 minutes) at fast charging stations. At such top-up places, DC charging will be the preferred mode.
Another business model that India is evaluating is battery swapping for light EVs. In fact, India is the first country to publish an official battery swapping draft policy. Some important points from the policy are the introduction of a unique identification number for each battery (in line with the VIN number on vehicles). This will help trace the battery and its raw materials. This will also help in fixing the extended producer responsibility as per the Battery Management Rules, 2022. Battery swapping has the potential to disrupt the battery-as-a-service market along with mobility in the light EV segment. This will also help in grid balancing and acting as an auxiliary source of power. For instance, in rural areas, solar power can be used to charge batteries during the daytime, power houses, feed the grid during peak requirements, and enable battery swapping for automobiles. In urban areas, battery charging can be regulated using the time-of-day concept, and through bidirectional power feed, these batteries can be used to feed back to the grid if the requirement arises. The concept is similar to the vehicle-to-grid (some countries in the West already have this). Battery swapping decouples the battery from the vehicle. Hence, the cost of the vehicle goes down by 40 per cent. However, the biggest benefit is that consumers need not worry about battery degradation, etc. This will work on the subscription model. It will enhance safety as batteries are charged under OEM supervision after every use. Further, upgrades to the cell technology will be readily available to the consumers. The market forces will determine the best technology at an affordable price made available to consumer.
Key to any business is managing profitability along with expansion and investments. On similar lines, for the charging infrastructure business to flourish, asset utilisation is needed. Currently, for electric four-wheeler public charging stations, the utilisation is 6-7 per cent. It is estimated that with the doubling of utilisation by 2025, the tariff structure for charging will fall by 15 per cent. The Faster Adoption and Manufacturing of Electric vehicles (FAME) II still has a large portion of the allocated Rs 10,000 million for public charging infrastructure that is underutilised, and the authorities are gearing up to speed up the completion of public charging infrastructure establishment in the next one to one and a half years. Therefore, we will soon see public charging points at every 25 km. There will be slow chargers on either side of the highways connecting cities with a population of more than 4 million and fast charging points at every 100 km on the highways and expressways. The target for urban areas is to have at least one charging point in every 3×3 km grid.
Indian Railways is another potential hotspot to develop charging infrastructure. The recently announced Indian Railways EV charging infrastructure policy helps in unlocking this potential. Not only railway stations but railway housing societies are also prominent places, and they can be used for public or semi-public charging station set-up. Every railway station in this country (no matter where) should have at least one 15A plug point with Railtel connectivity to offer charging.
However, one important aspect that needs to be taken care of by all charging point operators and OEMs is interoperability. The asset utilisation and capex involved in land, power connection, upgradation of transformers at the distribution level, etc. need cooperation among them. Recently, Tesla has opened up its EV connector design. This can be used for AC charging up to 1 MW of DC. The idea is that adapters can be eliminated and direct charging at other networks be made available and vice versa. A similar exercise to adopt either a Tesla charger (since now the connector is open) or some Indian standards needs to be evaluated and the industry should come forward with a proposal before the authorities start prescribing something (as happened in the US).
Finally, charging infrastructure is an asset-heavy and capital-intensive business, therefore, the financing structure specific to this sector needs to be evaluated and banks need to float tailor-made solutions to support this segment. Traditional players in vehicle, automotive parts, rectifier manufacturing, oil marketing, refining companies, etc. have the opportunity to foray into this sunrise sector and make their transition too.