BriefCASE: India’s EV infrastructure growth is nearly fully charged

The electric vehicle charging space in India is powering up. The past few quarters have brought many announcements of collaborations between automakers, power companies, oil retailers, charging hardware manufacturers and service providers to expand the network of public EV charging stations across the country. However, the path is far from smooth with several obstacles remaining to be navigated around.

This week, Tata Power, one of India's largest integrated power companies, announced it had surpassed the installation of 100,000 home EV chargers in India. Last month, Tata Motors announced a collaboration with Delta Electronics India and Thunderplus Solutions to establish EV charging stations. In 2024 thus far, Tata has entered deals with oil retailers Shell and HPCL, which include leveraging the latter company's widespread fuel station network to set up EV charging stations across India. Hyundai, Mahindra & Mahindra and MG Motor have made similar announcements to install thousands of chargers in the country.

Considering the hitherto weak demand for EVs in India, these initiatives are much needed to allay range anxiety and bolster consumer confidence in EVs. According to S&P Global Mobility, there will be over 9,000 public/semipublic charging points installed in India by the end of 2024. However, India still lacks a robust network of fast chargers. Most public/semipublic chargers are slow chargers. With EVs increasingly equipped with bigger batteries, the charging times in India will only increase if EV users cannot access a fast-charger network.

Challenges galore

While there is a push from the Indian government to expand the network of EV chargers, charging industry stakeholders face several challenges that could prevent strong growth.

One of the main challenges is the availability of real estate. According to Harish Mehta, CEO of Jio BP, an EV charging services company, it is very hard for charging point operators (CPOs) to acquire good locations in cities to set up stations where drivers can charge their cars. Jio BP has one of the largest charging networks in India, boasting over 5,000 charging points. Nearly 40% of the network comprises DC fast chargers with more than 60 kW power output.

Another challenge is the initial cost of setting up a charging station, which can be prohibitively high in India's tier 1 cities. Installation and grid upgrade costs can sometimes outstrip hardware costs. According to industry sources, these peripheral costs can reach INR 500,000 (about USD 6,000) to INR 700,000 (about USD 8,335) for a 60-kW DC charger.

The high cost of DC chargers and electricity is also cited as an impediment to expanding India's charging network. According to Servotech, an EV charging solution provider, for chargers with a capacity between 15 kW and 360 kW, the cost can range from INR 300,000 (about USD 3,575) to INR 3 million (about USD 35,700).

Except for a few big players, such as the Tata and Jio groups, the majority of Indian CPOs are startups and small- and medium-sized enterprises. For these companies, charging stations are a long-term play as, with the utilization rate of EV chargers as low as just 5% currently, there is little prospect of an immediate return on the investment.

CPOs have also reported the issue of voltage spikes, especially in remote areas. Overvoltage is causing several chargers on highways to be nonfunctional, further reducing the utilization rate.

Building a conducive ecosystem

The Indian government is actively participating in building EV charging infrastructure through new policies and incentives. India's minister of heavy industries and steel, H.D. Kumaraswamy, said last week that the government is expected to finalize the third edition of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) scheme in two months. The scheme supports charging station installation on major highways.

Government authorities are also in the process of setting up a nationwide unified platform for players who want to establish EV charging stations. The platform can be used to apply for electricity connections and to keep track of applications. It is also expected to address the issue of delays, improving the rate of infrastructure expansion. In addition, several Indian states and power distribution companies are working to improve grid infrastructure.

These steps, along with the expectation of a strong EV market in India, are ensuring steady investment in EV charging infrastructure. But, as has been shown, those choosing to invest face a bumpy road ahead.

Authored By: Srikant Jayanthan, Senior Research Analyst, Supply Chain & Technology

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