The EV Charging Conundrum

Most of the discussion around Electric Vehicles (EVs) among policy circles was initially centered on adoption and manufacturing incentives. However, as the adoption is taking off, charging infra is emerging as a key metric. Going forward, as price points for EVs come down further due to efficiencies in battery manufacturing and a wider range of models become available in the market, presence and density of charging infra shall become the most significant driver in facilitating EV purchases. Cities and states who have applied resources and efforts towards building a robust user-friendly infrastructure shall see a higher EV adoption rate than others.

What is noticed anecdotally is also reflected in consumer research. According to McKinsey’s 2016 EV consumer survey of buyers considering battery-powered EV in China, Germany, and the United States, the third most serious barrier was found to be charging infrastructure; first and second being high price point and driving range. The debate on whether EV adoption or charging infrastructure should be prioritized in policy formulation has also been settled unambiguously - charging infrastructure has to be established first to enable a smooth transition to EVs.

The Government of India has made Charging Infrastructure as one of the key enablers for EVs under the ambitious FAME II scheme - a subsidy provision for 1000 charging stations under the scheme. The Department of Heavy Industry has already invited proposals from Governments and private entities interested in establishing slow and fast charging stations with capital grants ranging from 50-100%. It is estimated that from around 200 public charging points currently, this initiative alone shall lead to increasing public charging points to about 7000. Given that India is seeing a faster transition to EVs in 2W and 3W segments, slow charging stations are being equipped with chargers that are compatible with existing models in both categories. The fast-charging stations, on the other hand, are being equipped with technology catering to passenger cars and light commercial vehicles. 

While some of the enablers to facilitate EV purchase decision from the ease of charging perspective are coming into place, there are others which could make the policy push more enabling for ensuring cleaner mobility and business sustainability.

#1 First and foremost, initial establishment of charging infrastructure should not be seen from the perspective of generating commercial gains, rather it should be considered as a step towards the long term goal and getting customers oriented to EVs. This implies incentivizing the initial charging stations with minimal lease rentals on space, special electricity tariffs for EV charging and viability gap funding for upstream electricity connection and civil work.

#2 Second, since the volumes are set to grow dramatically, the electricity distribution infrastructure needs to be gradually strengthened to cater to additional load for EV charging. Additionally, an initial push towards the usage of renewable sources of electricity to the extent possible will actualize the goal of clean and green mobility. Some interesting ‘prosumer’ models based on solar energy have emerged in the West which can certainly be implemented in India.

#3 Next, to develop a robust long term strategy and seamless execution on the ground, states could consider an inter-departmental cell comprising the departments of transport, power, and city administration. This will enable getting locations, back-end power supply, and long term transport planning right at the first instance itself.

#4 Finally, the policy should continue to provide adequate flexibility so that business models of both large operators and startups can evolve to meet changing consumer preferences.

As it is often said, seeing is believing, the presence of public charging infrastructure will ease the barrier in the minds of potential customers and hopefully drive greater adoption!