By 2030, EVs could outnumber the total vehicles in India today

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By 2030, as many as 40% of new vehicles sold in India – approximately 24 million – could be battery powered, according to a recent study by Germany-based, TFE Consulting. This is encouraging given that in 2017, less than 0.01% of cars sold in India were electric and there were only 220-250 operational charging stations, compared to 56,000 petrol stations.

The TFE report expects electric vehicles (EVs) to match the initial cost of conventional internal combustion engine (ICE) vehicles by the early 2020s. Factors driving down costs include rapidly decreasing battery costs, technological advances in charging infrastructure, innovative business models, the influx of smart digital technologies, as well as green policies and subsidies.

Currently, while electric cars offer up to an 80% reduction in operating costs compared to diesel or petrol cars, their capital costs are 40-100% higher. It also takes around 150 km, as a daily driven distance, for an electric car to outcompete a petrol car.

With government organization Energy Efficiency Services Limited (EESL) floating a tender for 10,000 electric vehicles and increasing consumer interest, there is a vast business opportunity for building fast charging stations. To create a stable supply of power to these charging stations, the EV transition would need to be managed together with a higher share of fluctuating wind and solar PV power in India’s grid.

As per the TFE study, demand for advanced charging technology has already seen growth, with the recent tender by EESL for the installation of 2,000 charging centers throughout India. Of these, 200 will be fast DC chargers, making this the first sizeable installation of DC chargers in India.

Hero Future Energies and ABB are among the top companies setting up solar PV-powered charging stations for electric vehicles. Last year, pv magazine reported that Fortum is collaborating with NBCC India to develop 150 electric vehicle (EV) charging stations in India, while ABB has bid for the tender to provide 4,500 charging stations across the country.

Hero Future Energies plans to charge batteries and then provide them to vehicles with drained batteries after they complete a trip, according to Livemint.

Domestic battery manufacturing industry

As the battery pack and its management contribute to more than 50% to the cost of an electric vehicle, the TFE report suggests that India should seek to develop a domestic battery manufacturing industry. Today, most of these expensive battery packs are manufactured in countries like China and Japan, and imported to India.

A mature manufacturing scenario in India has the potential to capture 80% of economic opportunity presented by the domestic EV market, by only importing raw metals and developing the entire battery pack inside India.

Battery swapping technologies can make small EVs competitive with ICE vehicles in terms of upfront costs. Selling EVs without a battery pack (or a considerably smaller battery pack) and having swappable batteries available through a pay-as-you-go model decreases the capital cost of EVs considerably. EVs sold without the batteries would today be at par in cost with a conventional vehicle.

Battery swapping technology would also help utilities and renewable energy producers, as batteries can be charged whenever there is excess energy in the grid, or when there is significant renewable energy generation. This might create alternative off-take opportunities for distributed solar or other renewable energy farms in India.