Editorial

The spark India’s Electric Vehicles dream needs

Sentinel Digital Desk

The increase in sales of electric vehicles (EVs) in India in September is good news. With the share of EVs still being less than one percent of total registered vehicles, achieving the national target appears to be quite challenging. Apart from high upfront costs, range anxieties over a lack of adequate charging stations continue to pose roadblocks to mass EV adoption. The installation of more charging stations along highways can provide the required boost towards meeting the national goal of replacing at least 30% of private cars, 70% of commercial vehicles, and 80% of two- and three-wheelers by 2030. Average annual EV sales need to increase significantly over the next seven years to achieve these targets. A look at the state-wise distribution of public EV charging facilities reveals a wide regional disparity that needs to be addressed to make EVs popular across the country. Assam, for instance, has only 170 charging stations compared to about 2800 in Maharashtra (the highest among all states). Across the country, the total number of charging stations has increased to about 8,000 from 5,254 in January, which is indicative of the pace. This falls too short given the requirement of 13 lakh charging stations by 2030 projected by the Confederation of Indian Industries to achieve a ratio of one charger per 40 EVs. India’s current average is one charger for 135 EVs, against the global average of about 10 vehicles per charger. Industry estimates show that charging an EV battery at a public charging station can provide a private car with a mileage of Rs 1 per km, compared to about Rs 8–9 per km in the case of petrol, about Rs 6 for diesel, and Rs 2.5 per km for compressed natural gas. The size of the battery is critical to the time required for charging, and faster charging of a large battery will substantially increase the cost. For those adopting EVs for mobility within a city, charging for about 6–8 hours with a home-based charger is okay, but the anxiety of driving beyond the city periphery without any certainty of getting a charging station grips the owner, which prevents the majority of owners of vehicles that run on petrol or diesel from going for EVs. This brings the issue of subsidies offered under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) into the centre stage of policy discourse on EV adoption. The Central Government proposes to substantially increase allocation under FAME 3.0 to about Rs 40,000 crore to Rs 50,000 crore from Rs 10,000 crore under FAME 2.0 to bolster EV adoption. Wider stakeholder consultation will go a long way in deciding priorities between subsidising EV purchases and building an EV charging ecosystem, including EV battery production, while finalizing the allocation for different segments of the scheme. Subsidising EV purchases or EV battery purchases is not going to accelerate the pace if the required charging infrastructure is not built up simultaneously. The cost of lithium batteries continues to rule the roost of EV adoption, and hence subsidy for EV batteries has an attraction that can be expected to be optimal if the number of EVs per charger can be reduced significantly. New start-up ideas like door-to-door EV charging have taken wings, and encouraging such innovative start-up ideas will help increase the availability of chargers for EVs, and EV purchasers can save on the expense of purchasing a home-based charging kit. Heavy dependence on imports to meet domestic demand for Advanced Chemistry Cells (ACC) for battery vehicles remains another key challenge in the pathway for the transition to EVs. The government approved a production-linked incentive scheme with a total outlay of Rs 18,100 crore for five years till 2025–26 for the manufacturing of ACC, but investments in manufacturing ACC cells are negligible and almost entire demand is required to be met through import. The government hopes that commercial production of the first set of ACC batteries in the country will start in January next year, which will also boost domestic EV production. As lithium-ion batteries account for about 40% of EV costs, PLI-supported domestic manufacturing can be expected to significantly bring down the upfront cost, making it affordable for many more car owners to adopt electric vehicles. Rising petrol and diesel costs are pushing existing car owners to explore the option of going for EVs for mobility solutions, and this factor, coupled with the lowered cost of batteries, will fuel demand for both EVs and adequate charging stations. Finding a realistic answer to the question of whether the energy goals of the country for 2030 ensure the availability of adequate cleaning energy to cater to the demand for projected EVs is essential to ascertaining if targets are going to be met for the mitigation of emissions from fossil fuels. Energy for charging EVs being generated from renewable sources is another critical requirement to ensure that EV adoption does not lead to more carbon emissions.