INTERVIEW: India's fossil fuel strategy to get a makeover amid EV push, says BluSmart CEO

India's energy landscape will witness a dramatic change as transport fuels like diesel and petrol will face acute competition from electric mobility, but refiners will remain relevant by tweaking their production slate towards petrochemicals to fill a potential demand vacuum, the founder of India's leading all-electric mobility and EV charging infrastructure operator firm told S&P Global Commodity Insights.

Anmol Jaggi, co-founder of BluSmart, said for India, which is dependent on imports for the bulk of its fossil fuel needs, making the transition from oil to electric mobility directly would work out to be relatively more profitable, than first making the switch to gas from oil and then to electric mobility.

"If I were a refiner, I would be worried about the threat from electric mobility every day. But in a country like ours, we have one of the lowest plastics consumption in the world. So the future for petrochemicals is bright," Jaggi said in an exclusive interview. "Demand for petrol and diesel is bound to come down but that will not make the refining business irrelevant."

Jaggi added that electric power as a fuel costs one-fifth of compressed natural gas and one-ninth of the cost of diesel.

According to S&P Global analysts, India's oil products demand is expected to rise from 4.9 million b/d in 2022 to 5.2 million b/d in 2023 and 5.3 million b/d in 2024. Going forward, India's oil demand is likely to continue to rise over the coming two decades, driven by growing population, transportation, petrochemicals, the residential sector and bunkering.

Recent schemes such as Production Linked Incentive, or PLI, across automobile, battery, renewable energy components, electronic components are expected to propel growth in polymer demand. S&P Global analysts expect overall annual demand growth for polyethylene and polypropylene to be around 7.5%-8.5% over the next ten years, well above GDP growth expectations for the same period.

Charging infrastructure a constraint

"The energy transition process in India has started. Now, only 2% of all new cars sold in the country are electric. We expect that to hit 25% by 2030," Jaggi said.

"Most of the electric cars available in the country are in the range of $15,000 and batteries give a range of about 200 km. The big turning point would come when we have electric cars that cost about $10,000 and give a range of about 300 km. That's when the momentum for electric cars will accelerate in India in a big way," he added.

According to Jaggi, the slow rate of expansion of charging infrastructure and publicly available charging points was acting as a constraint for the EV sector to grow at a required pace.

"EV Superhubs are the future of EV charging as it provides seamless charging access to consumers and ride-hailing fleets and we will be soon opening these hubs for public charging building some of the largest EV superhubs in the world," he added.

BluSmart has developed EV charging superhubs across all its operating locations. Spread over a total area of 1.2 million sq feet, it now has set up 34 charging superhubs and close to 4,000 charging points.

Expanding fleet

"BluSmart has disrupted the existing ride hailing market in India by building this unique operating model. With the once in a lifetime opportunity at hand, we aim to become the clean energy mobility infrastructure providers for mega cities of the world that are transitioning to cleaner and sustainable solutions," Jaggi said.

"Our mission is to decarbonize mobility at scale and provide exceptional customer experience and driver partner satisfaction," he added.

BluSmart currently operates a total of over 5,000 electric taxis in the cities of New Delhi and Bangalore and have completed 9.5 million emission free rides. The company has so far raised $109 million from various investors to accelerate growth, he said.

"We have a strategic plan in place to grow those numbers to 8,000 by March 2024," Jaggi added.

"We are currently focused only on two cities to push growth -- New Delhi and Bangalore in the near term. These two cities account for over 45% of the ride-hailing market. We want to make sure that we have tapped all the opportunities those two cities provide before tapping into other geographies," Jaggi added.

He said the government's investor-friendly policies made it easier to embrace energy transition as well as accelerate its business plans.

"I can see that we not only have strong policies to grow the EV business but also solar, ethanol blending and battery manufacturing," Jaggi said.