Government bets big on EVs, but is it enough?

India’s electric vehicles (EV) sector has much to cheer these days. Earlier this week, the sector received a shot in the arm when the union minister for road, transport, and highways, Nitin Gadkari, said that the centre has plans to set up at least one EV charging kiosk at each of the 69,000 petrol pumps across the country, at a virtual conference. The minister, during the conference, also highlighted the various steps the government had undertaken so far to give an impetus to e-mobility, going so far as to say that it aims for a speedy adoption of electric vehicles in the country.

“The future is very bright and India has the potential to become the largest EV market in the world as the government continues to push for EV adoption,” Gadkari was quoted as saying.

Gadkari also had urged the auto industry to join hands and come together to fulfill the broader national agenda of reducing pollution. Reducing GST to 5%, to allow delinking of battery cost of two and three wheelers from vehicle cost—since it accounts for nearly 30% of the total cost for the vehicle—he said were some of the measures the government had implemented to help the EV sector.

The industry, jubilant over the government’s latest e-mobility push, said that these measures, in particular that of setting up charging kiosks, would go a long way in helping people overcome the range anxiety while driving EVs. "We welcome the announcement of setting up of charging kiosk at every fuel station. It is a massive initiative that if done quickly and in sufficient density could address the issue of range anxiety in a big way,” says Sohinder Gill, director general, Society of Manufactures of Electric Vehicles.

Similarly, Aravind Sanka, co-founder, Rapido, a bike sharing startup, pointed out how the latest move by the government could go a long way in building a sustainable environment in the country. “This [move] will encourage many to adopt electric vehicles and we will be happy to onboard EVs as part of our bike-sharing mobility business. We have always strived towards reducing pollution and decongestion in cities through increasing awareness of the benefits of adopting 2W ride-sharing commutes. This will help us do just that in the long run,” he says.

This is not the first time that Nitin Gadkari had spoken about the government’s e-mobility push. Just last week, he had expressed confidence in India’s ability to emerge as a global hub for electric vehicles by 2025. “Automobile manufacturers need to reduce cost and forego profit initially to capture market and fuel growth. E-mobility is going to be the future mode of economic transport. There is economic viability for manufacturers, but presently they are not in a mood to reduce cost. Reducing cost may result in some losses initially, but will bring great benefits. As a marketing strategy you have to reduce the cost to get numbers,” he had said.

Tarun Mehta, co-founder and CEO of electric vehicles company, Ather Energy, too expressed satisfaction. “Ather has been building its own charging network for electric four wheelers and two wheelers since 2018. It is great to see the central government also taking the initiative to make charging stations more ubiquitous and accessible,” he says.

Mehta, however, did mention the complexities of EV charging stations. “Most charging of EVs happens at home and overnight, to improve adoption and promote the shift to electric mobility, charging options need to be made more visible and easy to use. We hope that between the charging points being set up by the Government and the 6500 Ather grid points we intend to install in the coming years, EVs will truly take off in India.”

Challenges abound

But while these initiatives by the government would, indeed, help give the much needed push to EVs, still the sector is plagued with many challenges. This is a sentiment that Gill echoes. He underlines that charging kiosks in itself will not be enough, especially when there is paucity of parking space for EVs while the battery is being charged. “Providing sufficient space for parking EVs, specially e-cars, for a few hours while they are being charged could be a challenge that needs to be addressed while setting up such stations. A mix of battery swapping and charging station could perhaps be optimal as it would cater to all sorts of EVs, including E2Ws and E3Ws,” he argues.

Gill further suggests that few other steps that the government can take is to rejigg the FAME 2 policy to increase the demand for electric two wheelers by providing more incentives so that the overall cost of ownership is low. "The anomaly of very high GST on the batteries, if sold separately from the vehicles, also needs to be addressed,” he says. The government floated its Faster Adoption and Manufacturing of Hybrid and EV (FAME) scheme first in 2015, with an initial outlay of $130 million worth of subsidies for electric vehicles. In its second iteration in 2019, the government scaled up the subsidy outlay for EVs to $1.4 billion.

Furthermore, industry players argue, that one of the key reasons why EV adoption is still low in India is because battery costs continue to be high. India needs to localise the manufacturing of lithium-ion cells which can significantly push the cost of ownership down. But charging infrastructure is the first step, experts reason.

“A robust charging network is a prerequisite to accelerate adoption of electric vehicles. Countries like Norway, Netherlands, and the U.S. have successfully adopted EVs by addressing the infrastructure challenges first. It is encouraging to see how the Indian government is also approaching EVs in a similar way and taking substantial steps to enable a supportive ecosystem,” says Saurav Kumar, founder and CEO, Euler Motors, an EV startup founded in 2018.

Kumar says that this move from the government will instill more confidence in the people for making EVs mainstream in India.

Moreover, two and three wheelers are low hanging fruits when it comes to EV adoption in India. Amit Raj Singh, co-founder and managing director, Gemopai said these steps will make EVs a better proposition than their petrol counterparts. Gemopai is a joint venture between Delhi-based startup Goreen E-Mobility and Opai Electric, one of the largest manufacturers of EVs in the world.

"Even though Gemopai scooters can be charged at home conveniently, we feel this move will give a much required boost to the EV adoption in the country and help in reducing the cost of ownership, making it more favorable in comparison to petrol counterparts. One of the main factors that affect the adoption of EVs in the country is the lack of charging stations at various points," he says.