Finance Minister Nirmala Sitharaman during her budget speech on 1 February focused on infrastructure, agriculture and MSME sectors but also made key announcements for the electric vehicle sector of the country.
To provide a major push for electric vehicles in Indian markets, Finance Minister Nirmala Sitharaman announced in her budget speech that a policy for servicing batteries, or battery-swapping, is being prepared and deployed.
Abhijeet Sinha, the National Programme Director of Ease of Doing Business (EoDB), in an interview with Sputnik talked about the benefits of the battery-swapping policy and other challenges for the electric vehicle segment in India.
Sinha, who also holds the additional post of Project Director in National Highways for Electric Vehicles, had recently commissioned India’s largest electric vehicle charging station in Gurugram city of Haryana state under the Ease of Doing Business programme.
This charging station is the largest in India, with 100 charging points for 4-wheelers. Previously, India’s largest EV charging station was situated in Navi Mumbai city of Maharashtra state, with 16 AC & 4 DC charging ports for EVs.
Sputnik: The electric vehicle ecosystem is evolving in India. What challenges do you see for the stakeholders?
Abhijeet Sinha: No matter how easy and smooth transition regulatory bodies and certification agencies attempt to facilitate while uplifting bars to ensure as a nation we are going in the direction of development and international competence with these new standards.
Industry still feels that they aren’t getting enough time and predictable insights about the upcoming standards or compliance they need to match or the clarity they need to make their long-term investment and business decisions.
This makes them hesitant toward change alongside other stakeholders who are too reluctant to invest in them due to lack of confidence.
This announcement of new Battery Swapping Policy in Budget 2022 is aimed to bring new technical battery standards in the next 60 days and a holistic national policy with clarity on tax, compliance, import regulations and relaxation in the next three months.
Instead of letting this policy become another challenge for the industry to make it an exception, the Ease of Doing Business Services division is going to hold both “consultation” over standard in detail and “pilot prototype units” in order to bridge the technical gap.
Sputnik: How do you see the introduction of a battery swapping policy for the electric vehicle ecosystem in India?
Abhijeet Sinha: It’s going to be a turning point towards a massive amalgamation of technology and economy meeting its 1.38 billion consumers. But these two identical ecosystems on battery swapping can be seen shortly nationwide:
1. Cities are going to stop large cargo and diesel trucks before entering the city and unloaded materials are going to reach inside the city on e-2W and e-3W. This alone is estimated to double the number of jobs (of those) currently employed in doorstep delivery of food and retail in the cities. This we are starting in Gurugram and Noida cities shortly with @NHEV under EoDB as a pilot.
2. In a nationwide impetus to make charging stations on highways standard as wayside amenities, each station is going to work like a cargo hub also for e-commerce with 20 e-2w and e-3W. This shall shrink delivery time from weeks to days in neighbouring cities and days to a few hours. Mathura, Agra, Vrindavan, Bahror, Kothputli, Jaipur (cities) from Delhi is going to be its pilot on a 500km e-highway connecting Jaipur-Delhi-Agra (cities).
Sputnik: Don’t you think that instead of adopting a battery swapping policy, India should focus on manufacturing batteries so that the prices of electric vehicles can be brought down?
Abhijeet Sinha: The federal government has also started working in this direction of increasing its existing strength from less than 10GWh (Gigawatt Hours) to more than 50GWh by 2025 and over 150GWh by 2030.
The government in January this year received a total of 10 bids with capacity ~130 GWh from companies like Reliance New Energy Solar, Hyundai, Ola, L&T, Amara Raja, Exide, Rajesh Exports, Larsen & Toubro, and India Power among others, under the Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage.
The federal cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal of the Department of Heavy Industry for implementation of the Production Linked Incentive (PLI) Scheme ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ for achieving manufacturing capacity of Fifty (50) GigaWatt Hour (GWh) of ACC and 5 GWh of “Niche” ACC with an outlay of INR 18 billion ($239 million).
Also companies, including Hyundai Motor India, Mahindra & Mahindra, Tata Motors and Kia India, have been asked to manufacture EVs under the production-linked incentive (PLI) scheme for the automobile industry to produce EVs under the Faster Adoption and Manufacturing of Hybrid and EV (FAME-II) scheme and bring down their prices up to 30 to 40 percent.
Initially, these shortlisted companies have to ensure achieving a domestic value addition of at least 25 percent and incur the mandatory investment (INR 2.25 billion/GWh) ($29.7 million/GWh) within the next two years and raise it to 60 percent domestic value addition within five years.
Also domestic production of ACC will lead to a net savings of INR 2 – 2.5 trillion ($26.44 – $33.06 billion) due to the reduction in oil imports.
Sputnik: Apart from a battery swapping policy, do you think that charging infrastructure in India should also be made robust to increase the penetration of electric vehicles?
Abhijeet Sinha: Charging infrastructure in India is also getting standardised like fuel pumps in design, investment, compliance and income patterns to increase the penetration on scale with electric vehicles.
The National Highway for Electric Vehicle (NHEV) has already started breaking national records of charger utilisation, asset monetisation and Capex break-even with its 1st prototype Alektrify in Gurugram (city), as it’s not only India’s largest charging station but has also been the most profitable one since it’s been commissioned.
Four major strengths developed by these NHEV stations which are inspiring the EV industry today and which are available for replication in 18 more routes to make them e-highways in the next two years are:
1. Availability of technical backup in the next 30 minutes , if you break down on these Jaipur- Delhi – Agra e-highway in case your EV breaks down or runs out of battery without being able to make a call for help.
2. EV Fleet operators like Ola, Uber, Blusmart would be able to get EVs at 30 percent lower price as they are getting batteries on subscription and only paying for the vehicle.
3. Capex spent on chargers and amenities are utilised more than 30 percent while our national average of public charger utilisation is still below 3 percent.
4. Investors choosing to invest in ‘charging stations’ rather than fuel pumps will now reach their breakeven in 36-40 months less than four years against the national average of 35-40 years for break-even.
Sputnik: The government is also looking for more participation from private players. How can this be done effectively so that the electric vehicle segment can be a level-playing field for all?
Abhijeet Sinha: The Indian transport and logistics ecosystem has 142,126 km (88,313 mi) roads covered by 60,799 diesel petrol stations, out of which 26,849 belong to Indian Oil (IOCL),14,675 to Bharat Petroleum (BPCL) and 14,161 to Hindustan Petroleum, while the numbers of CNG stations are only 3,180.
Asserting total numbers of charging stations can be a bit tricky, if single or double chargers are counted as charging stations, thus a Central Electric Vehicle & Charger Registration System ( Central EVCRS) is being piloted under the National Highway for Electric Vehicle (NHEV) with government support. This would bring both EVs and chargers, their multiple charging network and local apps on the same national registration platform along with coverage, availability and a visible pace in which we are covering our highways and cities with EV chargers.
But the investment required to build such a mammoth nationwide charging infrastructure is not possible with government funds, purchase or subsidies alone.
We need private sectors participating as investors and FDI too. And to bring them on board, the e-mobility business will have to prove itself viable and demonstrate a visible pattern of reaching its breakeven from the day of investment infused in EV charging infrastructure to give ROI (Return on investment) to its initial investors to attract more in the business.
The National Highway for EV (NHEV) pilot (project) is placing this entire ecosystem of registration, investment, break-even and ROI by standardising ‘charging stations’ in India like fuel pumps in design, investment, compliance and income patterns starting with Jaipur- Delhi – Agra first 500km prototype of E-Highway at the expense of barely INR 5 million ($66,135) per kilometre.
The success of this pilot will reduce government participation to just a facilitator and will increase private sector participation up to 90% as a major stakeholder of this new green circular economy.