“Wholesome communication campaigns that provide consumers with all the working knowledge they need to own and operate their EV will be a key pivot in India’s EV journey”

In conversation with Sustainability Outlook, Carson Dalton, Senior Director of Ola Mobility Institute talks about India’s readiness for transition to EVs and challenges and opportunities that exist in the value chain.

Is grid decarbonization part of the roadmap of India’s EV transition? To what extent have state level policies factored this in?

EVs will be considered clean only when they are powered by a clean source of fuel i.e. renewable energy, so decarbonizing the grid is definitely going to play a major role in the roadmap of India’s transition to EVs.

Even though e-mobility is at a nascent stage, it is encouraging to see how states have taken leadership in coming up with their respective EV policies. A few state policies like those of Delhi, Andhra Pradesh, Kerala, Karnataka, etc. speak about renewable energy-powered EV charging stations. A few states have considered low-cost connection and zero wheeling charges for charging EV using renewable sources. For example, Delhi has a provision for energy operators (including battery swapping operators) to avail power banking facilities with the DISCOMs. Andhra Pradesh has added a clause in its EV policy which states that the EV charging service providers can procure power through open access from renewable sources irrespective of the size of the demand. States like Uttarakhand have also included renewable energy in their EV policy and will be providing special tariffs for charging EVs using renewables. Tamil Nadu state with one of the highest renewable installed capacity (i.e. 12,180 MW) has also included in its EV policy that the power produced from renewables can power EVs and in turn help in reducing overall pollution.

India has set a target to achieve 175GW of installed renewable energy capacity. With new schemes/ ‘policies from the central government, the states are amending and redefining their policies to include renewable-grid integration, and thereby make the transition to an e-mobility future even more sustainable.

(Source: Ola Electric Mobility Pvt. Ltd)

How are states addressing ‘Make in India’ initiative through their EV policies?

First and foremost, it should be noted that out of the 10 states and UTs that the EV-Ready India report analyzed, 8 have made specific references to inviting investments towards EV manufacturing in their cities. This is a testament to the opportunity various states see in EVs providing the much-needed boost for industrial manufacturing.

The incentives as referenced in the policies have come in various forms. Andhra Pradesh, for example, provides incentives as concessions on capital investments for manufacturing units; Karnataka plans to create a venture capital fund for EV startups; Maharashtra has identified a package scheme for MSMEs and large manufacturing units operating on the production side; Uttar Pradesh intends to provide various incentives such as capital interest subsidy, infrastructure interest subsidy, industrial quality subsidy, exemption from stamp duty and electricity duty, SGST reimbursement, etc. for EV manufacturing units – large, medium, small and micro alike.

On the part of the Central Government, the recently announced reduction in corporate tax to 15% for all new manufacturing units across the country will further boost localization and strengthen the domestic supply chain market.

What is interesting is that manufacturing is being looked at for every component of the e-mobility domain from vehicles to batteries and charging infrastructure, among others. This is in line with India’s aspirations to build indigenous models that are made in India, and made for India.

In the long-term will behavioral interventions be required for an uptake in demand of EVs?

More than interventions, communication is what will be key to improving uptake of EVs in India. The Indian consumer today has low awareness on which model to buy, where to charge if s/he buys one, what are the life-cycle costs that s/he would have to incur. Range anxiety, understandably, is a key issue, as is the depreciated value of the vehicle and its place in the reseller market.

Wholesome communication campaigns that provide consumers with all the working knowledge they need to own and operate their EV will be a key pivot in India’s EV journey.

Andhra Pradesh is one of the states that has addressed this issue in its policy and has taken steps to create awareness among the people. The state plans to include “celebration of green days” to promote the new technology and is also encouraging manufacturers to provide test rides.

What are some challenges states are facing in accelerating transition to the EV sector?

The three key challenges hindering the EV sector growth are:

1. Lack of innovation and R&D leading to limited options to of EV models across segments
2. High upfront cost
3. Lack of charging infrastructure and network

In the past few years, a lot of development has happened in the EV sector but the chicken and egg situation still exists. Equipment manufacturers are still not confident to launch new models. The reasons are: the existing stock of the manufactured vehicles, the additional investment in BS-VI - i.e. in making vehicles compliant with recent and stringent emission norms, the low demand for EVs from the consumer side, the uncertainty towards investing in new and evolving technology, the uncertainties around policy, and more. There is limited innovation happening on the R&D side which is keeping the technology cost high (especially on the battery side) making EVs much costlier in comparison to an ICE counterpart. Industry should adopt mobility as a service ethos and redesign their components to meet the operating needs of fleet operators. As a result of fewer EV models across segments in the market and high upfront cost, the charging network is not developing. The lack of charging infrastructure is also adding to the range anxiety of the end-user further slowing down the adoption of e-mobility.

EV first or charging infrastructure first is like an endless cycle and it is high time now to take a bold stance to fix it. By coming up with policies, the states have taken the first step towards this transition. OMI’s report has analyzed the state EV policies across the EV, infrastructure and network value chain considering all aspects of the EV life cycle starting from raw material extraction to end use of the product. By adopting such a holistic approach the policies can provide much more clarity to the OEMs and other industry players to plan their next move.

What are some of the key opportunities businesses within the EV sector can tap into as the policies start to get more conducive?

India’s EV market is still at a nascent stage and a business opportunity exists in every stage of the value chain. Right from the production of renewable energy for integration at the charging source, to battery pack chemistry, to vehicle manufacturing to scrappage systems to charging solutions - the opportunity is varied and equally compelling.

India has an opportunity to lead the way in EV rollout globally. Businesses should be committed to ensuring that interventions are best fitted to serve the Indian context and should not shy away from deployment of creative solutions.

Carson Dalton is Senior Director, Ola Mobility Institute, a policy research and social innovation think tank that works at the intersection of mobility innovation and public good. Carson earlier lead corporate affairs for Ola International where his efforts were focused on market access for Ola, the company now has operations in Australia, New Zealand and the United Kingdom.