Does India’s current EV infrastructure support the rising EV adoption trend? Compared to other markets, India’s EV infrastructure is still not up to the mark and needs work. Tesla is selling its cars at prices between 20 and 50% above the cost of traditional gas-powered cars. Moreover, India’s charging infrastructure is far from sufficient to accommodate the growing demand for electric vehicles.
EVs in India are not cost competitive to an average customer
The price of EVs in India is not cost competitive for an average consumer. A recent survey revealed that the cost of an EV in India is not yet competitive to the global average. According to the research, the average tipping price of an EV in India is USD 36,000, or about Rs 27 lakh. This disparity is largely due to the misperception that EVs in India cost a lot more to maintain than conventional vehicles.
Another factor contributing to the cost of EVs in India is that they are generally more expensive than ICE vehicles. This is due to the higher cost of batteries, which may account for 40% of the total cost. Manufacturers and policymakers must assess how much the EVs cost and how far they travel before they can make them cost competitive for the average consumer. This can be addressed by investing more in R&D and manufacturing locally.
While EVs in India are not yet cost competitive for an average consumer, it is important to note that this gap should be narrowed down as the country’s population ages. Compared to their gas counterparts, EVs cost more per mile than gas vehicles. The cost-per-mile is also higher for electric light-duty vehicles with more range. As a result, they are sold at luxury car prices.
While this gap may appear large, a country’s policies are often more conducive to EV manufacturing than another. For example, India’s ambitious goal of reducing its oil import bill by half by 2030 is possible if the country makes the switch to electric vehicles. The EV transition could also save 107,566 crore rupees. It also has climate policy goals in mind – the country is part of the Paris Climate Treaty and wants to minimize its carbon emissions.
The government of India has outlined several policy goals to encourage the use of electric vehicles. Among other goals, the government has aimed to electrify public transport in the country by 2030. It has also set ambitious targets for the manufacturing of EVs, including electric three-wheelers and two-wheelers. The government has also announced incentives for scrapping old vehicles. For example, it has announced that public transport bus fleets will be using EVs by 2030. It also intends to set up charging stations in cities, including in Bangalore, Delhi, and Mumbai.
EV infrastructure in India needs to be improved
The government has announced a plan to set up as many as 22,000 charging stations by March 2022, under the Faster Adoption and Manufacturing of Electric Vehicles (FAME) India Scheme. The scheme also allocates INR 1,000 crore to develop EV charging infrastructure. However, there is no clear timeline for setting up these charging stations. The speed of installation varies by city size. As of February 2022, the Ministry of Power has approved INR 42 Cr for the construction of 2,877 EV charging stations across nine megacities.
The first step towards mass EV adoption is the creation of a viable charging network. In India, there is an overall dearth of charging infrastructure. But the government has a good intention. A few companies such as HOP Electric Mobility, which manufactures two-wheeler EVs, have built a network of charging and battery swapping stations. Such facilities will help consumers quickly charge their electric vehicles.
Another challenge for the growing EV adoption trend is the availability of public charging stations. As of this writing, only 1% of passenger vehicles in Europe are electric. However, if this figure increases by 50%, that would add up to over 150 million EVs in Europe. The government must prepare public charging infrastructure for this additional demand. Moreover, managed charging reduces peak loads. And, it also manages the intensity, duration, and time of charging for vehicles. Ultimately, managed charging reduces the impact of customers on the electric grid.
The government has announced that it is working to increase the demand for EVs. It has also introduced a vehicle scrappage policy, which allows citizens to scrap their old vehicles and replace them with new, clean and low-emission vehicles. EV demand in India is set to rise sharply in the coming years, as it continues to increase petrol and diesel prices. This is encouraging news for consumers, who can benefit from the growing EV market.
Further, India should also improve its battery regulations to increase the availability of EVs. It must also coordinate training for workers to handle batteries. Finally, it needs to coordinate policy coordination to promote the EV manufacturing industry and facilitate clustering and joint ventures. Despite the EV adoption trend in India, the country still lacks the infrastructure to meet the needs of its consumers.
EVs in India are sold at a 20% and 50% premium
In India, EVs are sold at a premium over internal combustion vehicles (ICs) by up to 20%. This high premium is not favourable for value-conscious consumers, who would rather opt for cheaper ICs. The premium also increases with the size of the vehicle, as a two-wheeler EV breaks even with its IC counterpart at 15000 km, compared to one lakh for an IC. The price sensitivity of the Indian consumer is further compounded by the low penetration of finance and the lack of clarity about the resale value of EVs.
The government is providing incentives for EV manufacturers, including interest-free loans on net SGST. A 10% market share is being targeted by the end of FY22, and the EV industry has a target of one million units by 2025. Besides EVs, a state-sponsored incentive program encourages the manufacture of electric buses. Incentives for electric vehicles also include charging stations and infrastructure.
Deloitte has published a forecast that predicts the EV market in India over the next decade. During the COVID-19 recovery period, EV sales will increase by a further 20 percent. However, ICEs will see a decline in market share after that, due to COVID-19. Overall, EV sales will continue to grow over the next decade.
The high upfront costs of EVs in India are likely to decrease as more OEMs offer affordable EV models. This premium is likely to disappear sooner than later, as the total cost of ownership of an EV is already significantly less than the ICE equivalent. And tax schemes aimed at promoting EV adoption will also help the market grow at a higher pace. So far, India has seen a 30% price premium compared to the IC market.
The battery costs for EVs have fallen significantly as the technology behind them advances. While a battery costs between 20% and 30% of a car’s overall price, the cost of lithium ion battery packs has declined drastically over the last three decades, with nearly 90% of that reduction occurring over the last decade. Battery manufacturing costs have also fallen dramatically, reducing the premium for EVs in India by 20 to 50%.
Tesla uses high-performance superchargers unique to Tesla
The high-performance superchargers that are uniquely Tesla are fast chargers that release DC electricity and bypass the onboard charger. The fast charging technology can charge the battery in about 70 minutes, significantly faster than a home charger. Unlike home chargers, Tesla Superchargers are located in nearly every city in the U.S., including downtown urban areas and shopping malls. These stations are also available to Tesla owners with solar panels and Tesla powerwalls to take advantage of their high-speed charging options.
The Tesla Supercharger costs are based on a per-kilowatt-hour basis, although in some regions, charging is billed by the minute. This is because electricity consumption is measured in kilowatt-hours, which equals to kilowatt-hours. For these reasons, the Supercharger cost varies widely across the Supercharger network. Tesla also changes the prices.
While the high-performance superchargers are not the only benefit of the Tesla Superchargers, they are a big bonus for the company. It has long been possible for a Tesla owner to meet other Tesla owners in the supercharger stations, and this has helped Tesla build its fan base. In fact, if more EVs were allowed to use the Tesla Superchargers, the network might grow even more. And the increased number of people using the Tesla Supercharger network could also be a big marketing opportunity.
While the V3 Superchargers are capable of charging a Model S sedan at 15 miles per minute, not all of these stations are V3 Superchargers. This means that the current model S and X will not be able to leverage the full 250 kWs of power. In the past, Tesla increased the charging rates for pre-2020 models but it’s still not possible to charge an older Model S at 250 kWs at all Superchargers.
Because Tesla’s network is unique, not everyone will be able to use it. But the infrastructure is already in place, and the company is constantly improving and expanding it. This allows for faster charging times and increased battery capacity. But the company’s generosity may backfire in the future if EVs are banned from the network. So the question is, how will this network work once it is fully operational?