New rules take India to the cusp of electric vehicles revolution

FAME, electric vehicles in India
The FAME scheme offers incentives to buyers of EVs and manufacturers, helping to create jobs and reducing dependence on imports.

The buzz over electric vehicles just got louder. The excitement is palpable as the nation looks to build an ecosystem for green mobility and attempts to curb air pollution with a slew of policy measures for increased adoption of EVs. The revised rules announced recently allow individuals and operators to set up charging stations for electric vehicles without a licence while providing land on a revenue-sharing model.

The EV sector has hit a speed breaker because of insufficient charging infrastructure and high cost of electric vehicles. The latest guidelines came at a time when the industry was losing steam. The December data shared in Parliament showed that India had only 1028 public EV charging stations with a sizeable chunk of them in and around the national capital region.

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According to a Grant Thornton report, India would need 400,000 public charging stations to cater to an estimated total of two million EVs plying on the roads by 2026. The new policies are expected to increase the number of charging points across the country exponentially.

Here are some of the key changes that were announced:

  • Any individual/entity is free to set up public charging stations without the requirement of a licence. Such stations must meet the technical, safety, performance standards and protocols.
  • The proposed charging stations can obtain electricity from any generation company through open access provided for this purpose within 15 days of receipt of the application.
  • The charging stations shall be provided with power connection within seven days in metro cities, fifteen days in other municipal areas and thirty days in rural areas.
  • For financial viability a revenue sharing model has been put in place for land used for the same.
  • A target of one charging station in a grid of 3×3 kilometres, and at every 25km on both sides of highways are planned. One fast charging-station every 100 km for long-range or heavy vehicles including buses and trucks.
  • The guidelines meet international charging standards.

Towards an electric vehicles future

Clearly, this is a step in the right direction as it facilitates EV owners to charge their machines using regular connections, allowing a tariff ceiling, open access, an effective land use revenue sharing model that would all combine to give a much-needed boost for the adoption of EVs. Also, the new announcement would stand in good stead if seen against the backdrop of the government target of 30% EV sales penetration for private cars, 70% for commercial vehicles, 40% for buses, and 80% for two- and three-wheelers by 2030.

These changes could give the EV sector the much-needed boost, but there is a need to do much more. Setting up public charging infrastructure is not an easy task as it could become not only an expensive proposition, but also may involve the tedious process of dismantling an already congested travel corridors where suitable charging spaces need to be created.

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Further, alternate solutions like installing charging points within residential complexes, housing societies, parking lots, shopping malls, railway stations, offices, and small shops need to be speeded up. Reserving at least 10% of parking lots for charging points could be helpful. The housing ministry has already amended the residential property bye laws to mandate sufficient EV charging points in housing colonies, buildings and apartments.

It would be worth considering the setting up of battery swapping stations as an alternative strategy on a larger scale. These points are relatively easy to install and operate as they need less space and could be a viable option, mainly for electric three-wheelers due to benefits such as low charging time, reduced upfront cost (battery leasing model), and better battery life (charging under controlled environment).

Another important aspect that needs to be looked into while planning the charging infrastructure is that the increase in number of EVs may add a significant load to the power grid which may require an upgrade of the existing infrastructure. There will also be a need to develop a recycling ecosystem to manage the battery waste that will accompany the increase in number of electric vehicles. The current e-waste management policies must, therefore, be strengthened to ensure that the cities do not turn into a dumping ground for EV waste.

India is on the cusp of embracing clean mobility in a big way. Apart from the user-friendly policies, there are several foreign players who are keen to invest in India in the EV space. Tech giant Foxconn, Tesla Inc, Hyundai, Mercedes are some of the names that have expressed their interest in entering the country’s EV market.

According to a CEEW Centre for Energy Finance (CEEW-CEF) study, the Indian EV market will be a $206 billion opportunity by 2030 if India maintains steady progress to meet its ambitious 2030 target. The government is also prioritising the shift to clean mobility. Realising the potential, leading domestic players such as Ola Electric, Ather Energy and Mahindra Electrics are rapidly growing their market presence.

Apart from the Union government, states such as Karnataka and Tamil Nadu are rolling out investor-friendly EV policies. According to the CEEW-CEF study, the EV market in India would require a cumulative investment of over $180 billion in vehicle production and charging infrastructure.

Another report by India Energy Storage Alliance (IESA) projects that the Indian EV market will grow at a CAGR of 36% till 2026. The EV battery market is also projected to grow at a CAGR of 30% during the period. With so many players, the road ahead for the industry seems much cleaner.

The Indian automotive industry is the fifth largest in the world and would grab the third spot by 2030. But catering to this vast domestic market by only focussing on the conventional modes of fuel will not be sustainable. Today, policymakers are developing a mobility option that is “shared, connected, and electric” and have projected an ambitious target of achieving 100% electrification by 2030. By making the shift towards electric vehicles, the country stands to benefit.

Analysts say clean mobility will not only decrease India’s carbon fuel dependency, but also make business sense for automakers. EVs are likely to save $60 billion in fuel cost by 2030, making the pitch even stronger. The day is not far when charging EVs will be much like charging mobile phones at home. The future looks clean, shared and connected and India could be well on the cusp of an electric mobility revolution.

(Rajiv Theodore is a senior journalist and commentator based in New Delhi.)