Government supports new energy mobility sector as it goes mainstream
Electric mobility in India has crossed its early milestones and is picking up pace. N Mohan, Deputy General Manager (Head - EV Charging Infrastructure)-Convergence Energy Services Ltd., describes the government incentives to provide a boost to this fledgling industry.
E-mobility is picking up pace in the country with support from the government in the form of phase-II of FAME and an outlay of Rs.10,000 crore. So initially we see this as a kind of education and choice the customer has to be encouraged to make, which will create that initial demand for electric two-wheelers. The government of India has amended various policies and regulations to promote the adoption of EVs and help kick-start the industry. EV adoption is further strengthened by State governments and UTs who adopt EV policies and benefit from central government schemes. So far eighteen States/UTs have announced EV policies and have set aggressive targets for EV deployment.
CESL is deploying a suite of business models for the different EV categories to increase use cases
FAME-II has increased the demand incentive to Rs.15,000/kWh of battery capacity and capped 40 percent of the cost of the vehicle.
CESL is facilitating scale-up of e-2W deployment using the following two business model schemes:
1. Vehicle deployment for the State government/ Urban Local Bodies/ Public Sector Unit officials
2. E-2W distribution to retail consumers
Under the schemes CESL will:
- -empanel the widest range of electric automobile makers to supply FAME-2 compliant e-2Ws
- -deploy a digital platform for officials and retail consumers to procure and supply EVs through empaneled OEMs
- -enable the financing of e-2W for the period of 3 to 5 years through a financier (CESL or Financial Institution such as Scheduled Banks or NBFCs) empaneled by CESL, as required
- -will offer to purchase e-2Ws on an upfront basis. In case of leasing to government officials, a State nominated nodal agency will pay EMIs by deducting the same through the official's salary.
- -facilitate delivery of e-2W, insurance, registration, and extending all post-sales and service support through OEMs
- -also act as the nodal agency for administering the demand incentive and interest subvention, if any in the State EV policy.
The inherent operating cost-benefit in e-3Ws has given this segment the best momentum in e-mobility. What it now needs is a logistics boost. The Ministry of Heavy Industries has mandated Energy Efficiency Services Ltd (EESL) to procure 300,000 e-3Ws for use by multiple user segments, and accordingly, we will aggregate demand for 3 lakh vehicles. As we try to build different usages for the 3W segment, we are structuring a simple business model using the following four use cases
1. For last-mile public transport
2. Goods delivery
3. Garbage collection
4. LPG distribution
The e-3Ws can be purchased on an upfront basis. Alongside we are trying to see how well we can structure financing solutions by on-boarding NBFCs and financial institutions. Typically, we want to see that this financing is for a 3-5-year period empaneled by CESL, which will facilitate delivery of e-3W, insurance, registration, and extend all post-sales and service support through notified OEMs. CESL can also act as the nodal agency for administering the demand incentive and interest subvention, if any, in the State EV policy.
The passenger car category is more like a proven business option. We see several startups, fleet aggregators, and fleet operators who are trying to switch from ICE to electric vehicles. We see this model growing fast and the stakeholder requirement is the need to have more EV models in the market. Presently in the e-4W segment, although the range is a factor, we strongly feel that for the commercial segment a larger number of new EV models are expected, so fleet operators can pick suitable options and switch from ICE to EV for their business requirements.
The Grand Challenge invites State transport undertakings (STUs)to express their demand for electric buses and access the FAME-II subsidy. A total of 3,472 buses or subsidy equivalent is available for rolling out e-buses. Nine metro cities having a population of more than 4 million have been shortlisted for the Grand Challenge or electrification of their bus fleets. There will be a differential allocation based on their rankings. We are working on this Grand Challenge after EESL was nominated to do the demand aggregation of e-3W and e-bus components under FAME. FAME is designed to support the electrification of public and shared transport, and help create charging infrastructure.
In the case of e-buses OPEX is the proven model. We will aggregate demand in nine cities for e-buses under this scheme. There are still some gaps and issues that we were facing here earlier. We are working with the State Transport Corporations across these nine cities and are trying to understand the technical requirements. Initially, we will work with the OPEX model and address some of the current challenges, which the OEM partners provide as feedback. Some of these are concerns about the performance parameters, the technical requirement, and technical specifications. Through the GC we are trying to address these gaps and are trying to bring in formalization in the technical specifications. We are also trying to see that there is a clear understanding of the scope and risk and that they are shared equally between the stakeholders.
The GC has been announced on September 30, 2021, and hopefully, in the next three months we should be able to roll out the procurement, based on the demand price arrived at from the STCs. By March 2022, we intend to roll out the e-buses to these nine cities.
We are also building several digital platforms to enable familiarity with e-mobility in the country. Users can easily access these digital platforms or dashboards and check products as well as the information available on EVs available in the market. On the platform, vehicles manufactured by the EV OEMs will be listed with the price and the models. This information on the e-station platform is being given to the customers to keep them up-to-date with the kind of EVs available, their price, and specifications.
EV charging infrastructure
Charging infra plays an important role and we are actively building it up. As we see it, the industry always talks about three major e-challenges in e-mobility. The first is range anxiety; the second is time anxiety, and the third is charge anxiety. The range anxiety is about how many kilometers a vehicle can travel in a single charge. So, although the industry is responding very swiftly, we have even more refined versions of EVs where the adequate range has been supplemented by the EV OEMs.
The time anxiety is about the customer's concern about how much time he has to spend at the charging station to get a full charge for his EV. Here we have a divergent usage in the industry since in India we have multiple charging porta-boxes and connectors. However, gradually we are seeing a sort of organization coming about concerning connectors as well. We feel that maybe in the next two years the industry would go with an almost standard sort of connector in the 4W segment. In 2W we see some challenges concerning the proprietary connectors charging for multiple owners. But gradually, with the intervention by the Department of Science and Technology and NITI Aayog, we see that formalization would happen in the 2W and 3W segments as well.
Charging anxiety is about consumers looking for charging stations. How easily can a customer access a charging station? Under the FAME scheme, there is a strong push being given for EV charging infrastructure. Priority is being given for State governments and public sector companies to build up the initial level of basic charging stations in the country, followed by expansion for highways and expressways under the DHI FAME-II scheme. So far, in India, we have an adequate number of fast-charging stations being deployed, and gradually slow charging is also being deployed alongside. This is being undertaken at some of the strategic locations based on demand and need for EVs.
This year will be a crucial one for everyone. We understand that once there is a clear roadmap and sufficient infrastructure, then consumers will look at EV as the first choice for their mobility needs. A lot has happened over a short period. This is now the moment we see that the industry has to complement. I think rather than looking at competition, we should look at e-mobility that can only grow when we partner and collaborate.