Setting up infrastructure to support EVs is a challenge. There are over 60,000 petrol pumps across India. That gives us an idea what the mass adoption of EVs may mean in terms of charge station penetration. And, of course, workforce retraining is needed to create the necessary service, maintenance and repair ecosystem.
In March 2019, the Cabinet cleared the Rs 10,000 crore FAME-II programme. The FAME I (faster adoption and manufacturing of hybrid and electric vehicles (FAME) was launched on April 1, 2015 with Rs 895 crore support and a two-year timeline, which was extended multiple times.
FAME II has a three-year timeline from April 2019. It aims to support 1 million two-wheelers, 500,000 three-wheelers, 55,000 four-wheelers and 7,000 buses. Currently EV sales are growing very fast off a low base. The Society of Manufacturers of Electric Vehicles (SMEV) claims 630,000 EV auto-rickshaws were sold in 2018-19 along with 126,000 two-wheelers and about 3600 passenger cars. That’s less than 4 per cent of total two/three-wheeler sales of over 19 million in 2018-19, and less than 1 per cent of 3 million plus car sales.
FAME-II will have Rs 1,500 crore outlay in 2019-20; Rs 5,000 crore in 2020-21 and Rs 3,500 crore in 2021-22. It offers a subsidy of Rs 150,000 each to 35,000 electric four-wheelers, and Rs 13,000 each to 20,000 strong hybrid four-wheelers. It will subsidise 7,090 e-buses at Rs 50 lakh each.
Delhi’s draft Electric Vehicle
Policy 2018 is also ambitious: It targets an EV base of 25 per cent of all new vehicles registered by 2023 and aims to set up battery-swapping facilities and charge stations every 3 km. Delhi registers about 700,000 new vehicles annually.
Delhi’s policy also offers a lot of tax breaks and subsidies in addition to FAME-II. There’s a subsidy of up to Rs 22,000 for electric two-wheelers, with additional subsidies for battery-swapping EVs. There’s a cash-back incentive of Rs 15,000 for scrapping BS-2/BS-3 standard two-wheelers. All road tax, registration, MCD parking fees are waived for all EVs and there’s a cashback of Rs 10 per trip for e-autos or e-cabs. In addition, the state will buy 1,000 electric buses in 2019-20.
Charge stations are delicensed under FAME-II with a target of a charge station every 3 km in urban areas and every 25 km on the highways. Every charge station needs different fast-charge and slow charge plug-points.
The fast charge systems include a combined charging system and a ChadeMo plug with 50 kw connections with 200-1000 volts of DC power. They also need Type 2 AC fast chargers with a 22 kw connection at 380-480 volts. There also need to be two slow charge points — Bharat AC 001 (10 kw, 230 volts) and Bharat DC 001 (15 kw 72 volts).
EV adoption will depend on many things falling into place. The market will probably respond positively to the policy push. Vehicle prices should fall as volumes rise and the cost of batteries falls. Similarly, the number of charge stations and qualified service personnel will surely grow.
However, this will take time and there will be an enormous reformatting of value chains. By 2030, global IC sales should peak and EV sales will start to take over. If we go by the trends in India, EV two and three-wheelers seem likely to take off first and the ride-share market will probably be more enthusiastic than private owners. But that could change as the ecosystem develops and prices reduce.