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Charging Station Builders Still Await Clarity As India Pushes Electric Vehicles

India offers tax breaks and subsidy to buyers if they dump fossil-fuel driven cars and scooters.

A worker conducts quality checks on an electric vehicle (EV) charging point. (Photographer: Ian Waldie/Bloomberg)
A worker conducts quality checks on an electric vehicle (EV) charging point. (Photographer: Ian Waldie/Bloomberg)

India offers tax breaks and subsidy to buyers if they dump fossil-fuel driven cars and scooters and switch to electric vehicles as the nation looks to curb one of the world’s worst air pollution and reduce energy imports. But there’s one missing link.

Prospective electric vehicle owners will want certainty that they don’t run out of power in the middle of nowhere and can’t replenish batteries quickly enough. Yet, the companies that can build infrastructure to give them that confidence still await clarity.

Budget 2019 allowed a tax deduction of up to Rs 1.5 lakh on interest paid on loans taken to purchase electric vehicles between April 1, 2019 and March 31, 2023. The GST Council is also looking to reduce tax rate to 5 percent from 12 percent.

The second phase of a government scheme, called Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles II, also offers incentives to purchase electric vehicles for commercial usage—buses, passenger vehicles and three-wheelers and privately owned two-wheelers. About 85 percent of its Rs 10,000-crore outlay, according to a statement, will be spent to offer incentives to buyer in the next three years.

The allocation for charging infrastructure is 10 percent or Rs 1,000 crore. And the industry isn’t sure how to avail even that.

There has been no clarity by the government as to how will it be used, Paresh Bhatt, chief-new business services at Tata Power Ltd., told BloombergQuint over the phone.

BloombergQuint on Wednesday emailed queries to the Power Ministry. The story will be updated once it responds.

High Costs

The nation wants to turn 30 percent of private vehicles and 70 percent taxis battery-powered by 2030. NITI Aayog has set a target of turning all two-wheelers electric in six to eight years.

Companies have just started installing charging stations. According to numbers they shared with BloombergQuint:

  • State-run Energy Efficiency Services Ltd. has commissioned 295 AC and 161 DC chargers in government buildings where it has supplied cars under India’s first such tender. It has installed 51 public charging stations complying with slower Bharat EV charger DC-001 standard in the New Delhi Municipal Council area.
  • Tata Power has 85 charging points for public and it’s own use in 15 cities including Mumbai, Delhi, Hyderabad, Bengaluru, Pune, Indore, Vijayawada & Hosur.
  • Ather Energy has installed 34 charging stations in Bengaluru and 10 in Chennai in malls and tech parks.

The costs of the technology are prohibitive and would require investments. Companies aren’t willing to commit just yet.

“We are not planning investments as of now, till clarity emerges in setting up charging stations, said Ravneet Phokela, chief business officer at Ather Energy, the maker of electric scooters and charging infrastructure. The cost of Ather’s two-wheeler fast-charging station is Rs 1.5-2 lakh, according to Phokela. “The industry estimate of equipment cost if the government guidelines have to be adhered to is Rs 40-45 lakh.”

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Priyank Aggarwal, vice president, strategy and business development at Exicom Power Solutions, told BloombergQuint over the phone that an AC charger, which can plug in three vehicles at a time, costs around Rs 50,000. A faster DC charger that plugs in a single vehicle costs Rs 1.5 lakh, and the version that allows two vehicles to be replenish battery at the same time costs Rs 3.5 lakh, he said.

Exicom had won the tender for supplying chargers to state-run Energy Efficiency Services Ltd.

Lack Of Two-Wheeler Standards

The nation wants to turn 30 percent of private vehicles and 70 percent taxis battery-powered by 2030. But it’s electric scooters that have seen the most demand so far.

While the nation has accepted both European CCS and Japan’s Chademo fast-charging standards, it’s yet to finalise the protocol for two-wheelers and three wheelers.

That’s preventing companies like Tata Power to venture into this business, said Bhatt.

Phokela said the fast chargers they have are not compatible with scooters other than Ather’s because there aren’t any standards. “Standardising chargers is important for interoperability.”

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Charging Costs

“The cost of operating an electric vehicle is lower than fossil fuel-powered cars and scooters. Running cost of an electric taxi is Rs 1.5 per km, whereas it is Rs 3 per km on CNG and Rs 6 per km on petrol,” Saurabh Kumar, managing director at Energy Efficiency Services, told BloombergQuint.

This cost can be reduced further, he said.

The state-run company had placed the first order to buy 10,000 electric sedans but delayed the second phase of it. It will now focus on public transport and fleet taxis.

“Running cost of e-Verito (Mahindra & Mahindra’s car) is Rs 1.10 per Km. We want this to be further reduced for customers,” he said. “The Delhi Electricity Regulatory Commission has set up a tariff of Rs 5.5 for charging. It has three types of duties. So, the actual tariff becomes around Rs 7 per unit. We have asked it to remove duties.”

(Updates an earlier version to incorporate Ather Energy’s comment on the cost of its two-wheeler charging station)