India is experiencing a surge in the adoption of electric vehicles (EVs) as it strives to depend less on imported energy and move towards a more sustainable future. Electric mobility can help combat pollution due to the increasing number of vehicles on the roads. By 2030, India intends to achieve the electrification of 70 per cent commercial cars, 30 per cent private cars, 40 per cent buses, and 80 per cent two- and three-wheelers by 2030.
The government has implemented several measures to promote electric mobility in India, including the provision of subsidies and tax breaks to buyers of electric cars. Furthermore, to encourage the adoption of EVs, the Department of Heavy Industries announced Faster Adoption and Manufacturing of Electric Vehicles Phase II (FAME II) programme subsidies worth Rs 100 billion. The FAME India Phase II scheme was passed in 2019 to encourage electric mobility in the country. According to the plan, 7,000 electric buses, 500,000 electric three-wheelers, 55,000 electric four-wheelers and 1 million electric two-wheelers will all be supported.
Realising early on that electric mobility advancements are not possible without proper charging infrastructure, the government laid special emphasis on charging infrastructure in FAME II by allotting Rs 10 billion and sanctioned 2,877 EV charging stations across India. Apart from this, the state governments are actively increasing the number of EV charging stations in their jurisdictions by providing attractive incentives. States such as Kerala, Madhya Pradesh, Haryana and Andhra Pradesh provide attractive capital subsidies for the installation of fast and slow EV chargers. Further, Delhi, Gujarat and Maharashtra have emerged as favourable locations for setting up private charging stations due to the availability of additional state subsidy. For charging stations, Chhattisgarh, Haryana, Odisha, Delhi and Andhra Pradesh provide 100 per cent net state goods and services tax (SGST) reimbursement.
Recent policy developments
Widespread charging infrastructure is essential for EV adoption. In this regard, in April 2022, the NITI Aayog issued a draft battery swapping policy that will be in effect until March 31, 2025. The policy will be implemented over a period of one to two years from the date of its launch, and it will cover all metropolitan cities with a population of more than 4 million people. After the policy’s official launch, the second phase will be implemented over a period of two to three years and will cover all UTs and major cities with a population of more than 500,000. The draft policy seeks to accelerate the widespread adoption of EVs by developing a battery swapping ecosystem that ensures minimal to no EV downtime while lowering costs and space requirements. The policy’s objective is to encourage battery swapping in EVs.
Later, in November 2022, the Ministry of Power issued an amendment to the revised consolidated guidelines and standards for EV charging infrastructure issued in January 2022. According to the amendment, the public charging stations will have a feature for prepaid collection of service charges with time-of-day rates and discounts for solar hours. Apart from these national-level policy developments, various state-level initiatives have taken place.
Rajasthan: In May 2022, the Rajasthan government approved the Rajasthan Electric Vehicle Policy, which had been delayed for almost a year. The EV policy’s primary goal is to encourage the use of EVs throughout the state. The Rajasthan Transport Department released a notification in July 2021 stating that EV purchasers will be reimbursed the SGST price in addition to receiving a one-time grant from the government. Reportedly, the grant transfer would be handled by the District Transport Officer. The Rajasthan government has also granted an additional Rs 400 million in budgetary support for SGST refunds to eligible recipients.
Chhattisgarh: In July 2022, the Chhattisgarh government launched its EV policy, which intends to foster EV manufacturing facilities and job opportunities in the sector. The government established a five-year objective of attaining 15 per cent new EV registrations for personal and commercial operations. According to the policy, the state government will grant one-fourth of the cost of plant and machinery towards the development of EV production facilities. Charging stations will be deployed in both public and private facilities. Incentives such as road tax exemptions, registration fee waivers, and capital subsidies have also been offered. SGST reimbursement has been provided by the state for EV makers during the policy term. The government will additionally compensate energy operators for the purchase of batteries to be used in swapping stations.
Uttar Pradesh: In September 2022, the Uttar Pradesh cabinet approved a new EV policy. As per the draft of the UP Electric Vehicle Policy, 2022, a 15 per cent rebate would be given on the purchase of electric two/three/four-wheelers, EVs and e-buses. For the first three years after the implementation of the EV policy, a 100 per cent exemption will be given for the registration of EVs and road tax. In the fourth and fifth years, 50 per cent relaxation will be given. The new policy provides capital subsidy at the rate of 30 per cent on investment subject to a maximum of Rs 10 billion per project to a maximum of first two ultra-mega battery projects, investing Rs 15 billion or more each for setting up battery manufacturing plants with a minimum production capacity of 1 GWh in the state.
Haryana: In November 2022, the Haryana government notified its EV policy. The policy aims to promote the manufacturing of EVs and their components in the state. The EV policy offers various financial incentives to EV manufacturers by giving incentives on fixed capital investment, net SGST, stamp duty, employment generation, etc. Notably, there is 100 per cent reimbursement of stamp duty along with exemption in electricity duty for a period of 20 years. The policy includes provisions to lower the initial cost of EVs in addition to strengthening the infrastructure. It also includes programmes for charging and battery swapping stations, state reimbursement of goods and services tax, capital subsidies, employment generation subsidies, electricity duty exemptions, stamp duty reimbursement, patent fee reimbursement, R&D incentives, and human capacity building excellence centres.
Key market players
The Indian EV charging sector is witnessing collaborations amongst a number of private and public companies to deploy EV charging stations across the country. While various PSUs such as Energy Efficiency Services Limited, Convergence Energy Services Limited, NTPC Limited, and Indian Oil Corporation Limited were the initial drivers of EV growth in India, other companies have also shown their presence in this early phase of the Indian charging station market. The growing charging market has opened up new opportunities for technology providers and charging infrastructure developers like Fortum, Exicom, Statiq, Ather Energy, Jip-bp, and Mahindra & Mahindra. In addition, a number of firms are extending their footprint by securing financing and entering untapped cities. Companies are investing heavily in R&D and developing new models in order to establish their market presence.
Various tenders and projects are being announced in this space. For instance, in May 2022, Magenta ChargeGrid and Ather Energy partnered to install charging stations, with the former taking on the responsibility of managing the stations using the ChargeGrid platform. Then, in June 2022, Maharashtra State Electricity Distribution Company Limited announced its plans to set up two EV charging stations in the city. In the same month, Statiq entered into a partnership with Hala Mobility to improve the mobility network for EV users in a collaborative fashion. In August 2022, Statiq planned to invest Rs 400 million in the development of EV charging infrastructure for residential and commercial projects. In the same month, Tata Power and JP Infra Mumbai Private Limited joined hands to install over 60 EV charging points across JP Infra’s residential projects to accelerate sustainable mobility in Mumbai.
Further, in September 2022, Rajasthan Electronics and Instruments issued a tender to appoint agencies to identify, install, operate and maintain 738 EV charging stations across India. In the same month, Hero MotoCorp and Hindustan Petroleum Corporation Limited announced their partnership to develop charging infrastructure for EVs in India. Shell also planned to set up more than 10,000 EV charging stations in India by 2030. Then, in October 2022, Mahindra & Mahindra and Jio-bp, a fuel and mobility conglomerate between Reliance Industries Limited and bp, expanded its existing collaboration for setting up a charging station network. In November 2022, Servotech Power Systems Limited was awarded a major project by Bharat Petroleum Corporation Limited to supply and install 800 units of DC fast EV chargers at different locations across the country in the next four months. In the same month, Statiq announced its collaboration with Nexus Malls to set up EV chargers in parking lots at its 17 locations across India.
The government is taking rapid strides to encourage the growth of EV charging infrastructure across the country. However, there are still many issues, especially with regard to land allotment, grid connectivity, economic feasibility for developers, relevant standards and interoperability that need to be addressed to create a robust and collaborative ecosystem. To this end, different stakeholders must collaborate to scale up and find affordable solutions to support on-the-ground development.
To conclude, the Indian EV charging market shows immense potential owing to the expected rise in demand for EVs. While the utilisation of chargers and their economic viability may continue to be concerns in the near term, innovation, collaboration and the evolving market dynamics will ultimately lead to the expansion of the EV ch0arging ecosystem in India.