EV growth faces charging woes even as carmakers push ahead with launches

India's charging infrastructure lags behind EV demand despite policy incentives

The Indian market for electric passenger vehicles (e-PVs) is minuscule, accounting for 2 per cent of the passenger vehicle market in 2023-24. It is expected to go up just 100 basis points in FY25. Of this, two-wheelers account for more than half the electric-vehicle (EV) market. But car manufacturers are undaunted by these numbers. According to a report in this newspaper, leading car companies in India have 15 to 20 launches planned in the coming year, a major acceleration from seven or eight launches in 2024. Most of these EVs are likely to be high-end sports utility vehicles. Carmakers may be betting on the future — principally, rising disposable incomes powering an expected market penetration of 15 per cent by 2030 and an anticipation of an expansion in charging infrastructure. The first two factors have a certain strategic logic. But if recent trends are anything to go by, EV infrastructure in the form of charging or battery-swapping stations may stall those plans in first gear.

 

It is nine years since the country launched its EV programme called FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) in 2015. But India has a little over 12,000 public charging stations to service 1.7 million EVs. S&P Global Mobility reckons that another 9,000 public and semi-public charging points will be added by the end of this calendar year, still way short of the requirement. For comparison, China has 3.2 million public charging points to service 20 million EVs. To be sure, manufacturers are responding by investing in such networks themselves. Tata Power, for instance, is moving forward with the installation of home chargers, and its sister company Tata Motors has tied up with two firms to set up charging stations as well as with oil retailers Shell and Hindustan Petroleum Corporation to leverage their fuel-pump infrastructure. Reliance Industries has similarly ridden on the BP network to set up 5,000 charging points. Mahindra & Mahindra, Hyundai, and MG Motor also have charging-network plans in place.

 

The question is whether these plans by the big players have the critical mass to make an appreciable difference. The bulk of the charging-point operators are startups and small and medium enterprises; for them, it’s a chicken-and-egg situation. The lack of a charging infrastructure has kept the EV market small, so a 5 per cent average utilisation rate is hardly an incentive to expand. Add in the high costs of real estate, or chargers and electricity, and the economics of the charging point business are still dull. Battery swapping, the alternative technology to keep EVs running, is still to find a sparking point in India for lack of standardisation and the same high cost structure (land, equipment) as charging points.

 

Overall, it is difficult to escape the conclusion that it is the government that must drive the charging-infrastructure network. To this end, new policies and incentives have been promised for charging stations, especially on highways. The government has also said it will set up a unified national platform for private players. It launched the third phase of the EV-subsidy scheme, the PM Electric Drive Revolution in Innovative Vehicle Enhancement, in September with an allocation of Rs 2,000 crore for charging infrastructure. It remains to be seen how the ecosystem develops. Until a robust charging ecosystem develops, carmakers would do well to keep their EV launches on the drawing board rather than risk putting an expensive EV cart before the battery-charging horse.