EV Expansion: Increasing focus on charging infrastructure augurs well for the segment

Increasing focus on charging infrastructure augurs well for the segment

India’s market for electric vehicles (EVs), as well as their charging infras­truc­ture, is rapidly evolving and ex­pand­ing. As per the dashboard of the Fas­ter Adoption and Manufacturing of Ele­ctric Vehicles in India (FAME)-II sc­he­me, around 0.8 million EVs have been sold in the country, as of Jan­uary 2023. Charging infrastructure development is gaining momentum, driven by central government programmes, particularly the FAME scheme, as well as initiatives by public and private players, inclu­ding oil marketing companies. Ongoing government tenders, clarity on EV charging regulations and delicensing of EV charging are expected to further increase public charging point density in India in the near future.

Growth drivers

Rising fuel prices and the attractive total cost of ownership of EVs are resulting in a switch to EVs. The rise in awareness re­garding tail pipe emissions is also making end users seek cleaner transportation alternatives. Moreover, supportive po­licies and regulations are driving the demand for EVs. The government has set a target of achieving 30 per cent EV sales penetration by 2030. To help meet this am­bitious target, the Department of Hea­vy Industries launched the FAME In­dia scheme in 2015.

Phase II of FAME has been under implementation since April 2019, with budgetary support of Rs 100 billion. It is mea­nt to incentivise demand for EVs by providing upfront subsidies and creating EV charging infrastructure. One million electric two-wheelers, 500,000 electric three-wheelers, 55,000 electric cars and 7,090 electric buses are planned to be supported under FAME-II, through subsidies. An allocation of Rs 10 billion has also been made under FAME-II for the provision of EV charging stations. However, a large portion of the funds allocated for public charging infrastructure remains underutilised. Under the two phases of FAME, a total of 562 charging stations ha­ve be­en installed as of December 7, 2022 (479 under FAME-I and 83 under FAME-II). The Ministry of Heavy Indus­tries had sa­nctioned 520 charging stations under Phase I, and 2,877 charging stations ac­ross 68 cities in Phase II.

State governments are also taking active steps to increase the EV charging network in their states by providing attractive incentives in the form of capital subsidies and 100 per cent reimbursement of the state goods and services tax. So far, 18 states – Andhra Pradesh, Delhi, Karna­ta­ka, Kerala, Maharashtra, Tamil Na­du, Te­langana, Haryana, Uttar Prade­sh, Madh­ya Pradesh, Odisha, Rajasthan, Gujarat, Assam, Goa, Meghalaya, West Be­n­gal and Uttarakhand – have either approved, notified or formulated dedicated EV policies. States such as Har­ya­na, Kerala, Madhya Pradesh and Andhra Pradesh provide attractive capital subsidies for deployment of fast and slow EV chargers. Meanwhile, Delhi and Maha­ra­sh­tra are favourable locations for ins­ta­lling of private charging due to the availability of additional state subsidies. Besi­des these incentives, some state el­ectricity regulatory commissions have announ­c­ed tariff for EV charging as a separate category in their tariff orders.

Market trends

EV sales have grown considerably over the years – from 56,399 in 2016-17 to 428,213 in 2021-22, recording a compo­und annual growth rate of nearly 50 per cent. As per the FAME-II dashboard (ac­cessed on January 13, 2023), the overall number of EVs sold in the country has re­ached 813,607. Meanwhile, the requir­ed EV charging infrastructure to support the EVs is still lacking. As of August 2022, there are a total of 2,826 operational public charging stations (PCSs) 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 (OEMs) and procurement by public sector undertakings (PSUs), commercial fleet operators, bus operators and charging service providers.

Various modes are being used for charging EVs, such as private, public, captive and battery swapping. Private charging is typically carried out on residential pre­mi­s­es, while public charging infrastructure is available at publicly accessible lo­cati­ons. Captive chargers are the ones in­s­tall­ed at government offices, corporate ho­u­ses, etc. and used by commercial fl­eets such as electric cars and buses. Fi­nally, the battery swapping model, which involves replacing discharged electric batteries with charged ones, is expected to gain traction in the Indian market. Most of the battery swapping is currently taking place in the e-rickshaw segment, and it is becoming increasingly popular. India is the first country to publish an off­icial battery swapping draft policy. Fur­ther, charging infrastructure can be classified into alternating current (AC)- and direct current (DC)-based chargers. AC chargers are further divided into light EV (LEV) charge points (for e-scooters and rickshaws), Level-1 AC chargers and Le­vel-2 AC chargers. DC chargers, me­an­while, are classified into Bharat DC-001, CHA­de­MO and Combined Char­g­ing Sy­stem (CCS) Type 2 chargers. Of the total EV charger sales in 2021, the majority were accounted for by Level-2 AC chargers, which are typically supplied with passenger electric four-wheelers, and installed by PSUs and charging point op­erators (CPOs) at PCSs. Meanwhile, CCS chargers are mai­nly utilised for captive charging of electric buses and fast charging of PCSs.

Policy push

In January 2022, the Ministry of Power (MoP) issued the revised consolidated guidelines and standards for charging infrastructure. According to these, the tariff for electricity supply to PCSs will be a single-part tariff and will not exceed the average cost of supply until March 31, 2025. There will be a separate metering arrangement for PCSs, so that consumption may be recorded and billed as per tariffs for EV charging stations. Dis­coms may leverage funding from the Re­va­mped Distribution Sector Scheme for the general upstream network augmentation necessitated by upcoming charging infrastructure in various areas. Further, discoms have been directed to provide electricity connections to PCSs in accordance with the timelines specified in the Electricity (Rights of Consu­mers) Rules, 2020. As per these guideli­nes, land available with the government or public entities will be provided for the installation of charging stations on a revenue sharing basis at the fixed rate of Re 1 per kWh, initially for a period of 10 years. Recently, in November 2022, the MoP issued an am­endment to these guidelines. The am­end­ment envisages PCSs offering a prepaid feature for service charges, including time-of-day rates and solar hour discounts.

In April 2022, NITI Aayog drafted a battery swapping policy. As per the draft policy, battery swapping would fall under the battery-as-a-service model, whereby customers can pay a regular subscription fee at fixed intervals to service providers for battery services th­rou­ghout a vehicle’s 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 will 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.

Initiatives being taken in the Indian market

Currently, Energy Efficiency Services Limited’s (EESL) subsidiary, Convergen­ce Energy Services Limited (CESL), is supporting the roll-out of public charging infrastructure in India. In October 2022, CESL announced the list of selected agencies for the installation of 124 ba­ttery swapping stations, 352 standing chargers for electric two- and three-wh­eelers and 1,294 standing DC fast chargers for electric four-wheelers across ei­ght cities. These will be built under a build-own-operate model valid for eight years. Under this tender, CPOs will be given the right to use the sites provided to them by CESL for setting up and operating the charging infrastructure in the area. This business model is a shift from the earlier mode of business where CESL was responsible for investing, owning and operating these stations. With this tender, CESL has 1,770 EV charging stations under implementation.

Apart from EESL, various other PSUs such as NTPC Limited, Rajasthan Elec­tronics and Instruments Limited and Bharat Heavy Electricals Limited have announced plans to implement EV char­ging stations on a massive scale across the country. Meanwhile, oil PSUs, which are seen to be in a strategic position to build charging infrastructure, especially on highways and expressways across the country, are allowing CPOs to set up charging stations at their retail outlets. Oil marketing companies such as Indian Oil Corporation Limited, Bharat Petro­leum Corporation Limited and Hindus­tan Petroleum Corporation Limited have pledged to use their outlets to cu­mu­latively set up 22,000 EV charging centres by 2025. Discoms such as BSES, Tata Power Delhi Distribution Limited and Bangalore Electricity Supply Com­pany Limited are proactively partnering with several market players to set up ch­arging stations and battery swaping poi­nts in their areas of operation. Tata Po­wer recently announced the K2K (Kash­mir to Kanyakumari) Plan for na­tion-wide installation of around 25,000 EV charging points over the next five years. The National Highways Authority of India is also working closely with the go­vernment to build charging infrast­ru­c­ture on national highways. It plans to cover 35,000-40,000 km of national highways with charging stations by 2023.

Additionally, charging station network developers such as Fortum, Magenta Po­wer, Volttic and TecSo Charge Zone have developed their own charging platforms for managing their EV charging networks. Further, vehicle OEMs are collaborating with CPOs for providing existing and upcoming buyers with assurance regarding public charging points. For instance, vehicle OEMs such as Hero Electric, BYD India and Ather Energy have tied up with CPOs such as Charge Zone and Magenta ChargeGrid.

Tariff design and policy support

The fixed or demand charge for an electricity connection is levied on the sanctioned load for the connection or the maximum power demand registered du­ring the billing period, which must be paid irrespective of the actual power us­age. Energy charges are the variable component of an electricity tariff appli­ed on the total volume of energy/electricity consumed during the billing period. There is significant variation across states in terms of tariff design. A few sta­tes, including Gujarat, Haryana, Karna­taka and Maharashtra, have introduced demand charges while some states such as Andhra Pradesh, Delhi, Chhattisgarh, Telangana and Uttar Pradesh have notified only energy charges. Each state sets its own rates for distinct consumer gr­oups; therefore, the two sides of the tariff, energy and demand charges, differ from one another.

Issues and challenges

EV sales witnessed a year-on-year rise of 168 per cent in 2021. However, the number of PCSs set up by PSUs increased by only 39 per cent during the same period. Further, the current utilisation rate of PCSs in India is in the range of 10-15 per cent. This low utilisation rate has been de­terring investors and CPOs from ex­pa­nding their fleets. However, with the inc­reased usage of EVs by commercial fleet operators and the increased adoption rate of EVs by the public, the utilisation ra­tes are expected to increase. Further, EV drivers may find it challenging to charge their vehicles on different charging networks until the networks become interoperable. CPOs will need to join hands and remove this barrier to provide a se­amless charging experience to drivers. As per Customized Energy Solu­ti­o­ns, the electrification of transport will le­ad to a rise in demand for energy and thus grid capacity. In the business-as-usual scenario, with the current adoption rate of EVs, the deployment of around 28 GW of charger capacity will be required betw­een 2022 and 2030. The current annual installed capacity, as of 2021, stands at 201.5 MW. The key challenge would be to contain the tariff rates within affordable limits amidst such grid investments.


Collaboration between EV OEMs and CPOs is providing assurance to existing and upcoming buyers with respect to the availability of public charging poin­ts, which will boost the purchase of EVs. According to India Ratings and Re­sear­ch, in the next decade, India might ne­ed 0.23 million charging stations, en­tailing a total investment of Rs 1.05 trillion by 2031-32 to cater to the growing de­mand for EVs and the resultant re­quirement of power. Of these, 63,000 charging stations, entailing an investment of Rs 269 billion, are expected over the next five years.

In terms of energy requirement for the charging infrastructure, as per studies being carried out by the Central Elec­tri­city Authority to estimate the demand in 2031-32, a provisional requirement of 69 billion units for EVs has been considered. Further, action plans for nine major cities have been prepared by the Bureau of Energy Efficiency for installation of PCSs. As per the initial estimates, a total of 46,397 PCSs are being targeted to be installed in these cities by 2030.

Going forward, the recent policy initiatives and steps taken by oil marketing co­mpanies, as well as private and public players, towards setting up EV chargers are expected to boost the country’s EV ch­arging ecosystem significantly.

Nikita Gupta