Electric Vehicles in India

Background

Road Electric Vehicles (EVs) include a large range of vehicles from electric two - wheelers, three - wheelers (rickshaws), cars and electric buses.

In addition, plug - in electric vehicles can be classified into two types: battery electric vehicles (BEVs), and plug - in hybrid electric vehicles (PHEVs). BEVs have an electric motor in place of combustion engine and use electricity from the grid stored in batteries. Plug - in hybrid electric vehicles (PHEV) use batteries to power an electric motor and liquid fuel such as gasoline or diesel to power an internal combustion engine or other propulsion source.

EVs can go beyond the above mentioned technology based classification, and can be classified on the basis of their attributes such as charging time, driving range, and the maximum load it can carry. Of these attributes, the two most important characteristics of an electric vehicle of concern to the consumer are:

• Driving range (i.e. the maximum distance an EV can run when fully charged)
• Charging time of batteries (i.e. the time required to fully charge the battery) and Charging time depends on the input power characteristics (i.e. input voltage and current), battery type and battery capacity.

Battery in EV

The choice of batteries depends on the energy density, weight and costs. Electric cycles and low range mopeds have simple battery units while electric cars deploy a large number of batteries. Traditionally, most electric vehicles have used lead - acid batteries due to their mature technology, easy availability and low cost. However, since the 1990s battery technologies have evolved significantly and several new types of batteries have been developed. More recently, batteries using combinations of lithium ion and its variations are gaining widespread acceptance due to better efficiency, reduced weight, lower charging time, better power output, longer lifetime, and reduced environmental implications from battery disposal.

The following four types of batteries are commonly used today in EVs:

• Lead Acid
• Nickel Cadmium (NiCd)
• Nickel Metal Hydride (NiMH)
• Lithium - ion (Li- ion) - Lithium - ion batt eries have higher specific energy relative to the other battery types. In the future, technology innovations with Li - ion and other battery technologies are expected to result in batteries with much higher specific energy and lower costs.

Battery Charging

In low power applications the power conditioning which includes the AC to DC conversion, the power control unit which delivers a variable DC voltage to the battery, and various filtering functions are all carried out within the charger and can be implemented at a relatively low cost. The Battery Management System (BMS) is tightly integrated with the battery. It monitors the key battery operating parameters of voltage, current and temperature and controls the charging rate to provide the required constant current / constant voltage (CC/CV) charging profile and it triggers the protection circuits if the battery's operating limits are exceeded, isolating the battery if needed.

Ecosystem for Electric Vehicles

1. Market
• Testing and certification
• Vehicle Servicing
• High capital cost and Financing
• Electricity quality
• Market for electricty storage
• Consumer perceptions
• Raw Materials for batteries
2. Technical
• Efficiencies of batteries
• Driving range of EVs
• Charging time
• Safety
• Environmental Impacts
3. Policy
• Taxation of vehicles and components
• Subsidies on fossil fuels
• Electricity tariff policies
4. Infrastructure
• Charging infrastructure
• Smart Grids
• Battery recycling
• Dedicated lanes for E - 2 Wheelers

Indian EV scenario

India’s commitment to the EV30@30 initiative - to reach a 30 percent sales share for EVs by 2030 - presents a cumulative investment opportunity of as large as INR 19.7 lakh crore ($US266 billion). There has been a recent increase in public budgetary allocations and corporate investment in EVs in order to achieve this. Central and state governments have approved fiscal incentives for EVs, charging infrastructure, and manufacturing that are helping achieve parity in total cost of ownership with internal combustion engine (ICE) vehicles for several segments and use cases. Original equipment manufacturers (OEMs) and component manufacturers are investing in indigenous manufacturing and supply chains. EV startups are attracting significant venture funding due to their product and business model innovation, capturing as well as creating the market opportunity presented by EVs. 

Production-Linked Incentive (PLI)

Production-Linked Incentive (PLI) scheme worth INR 18,100 crores (US$2.4 billion) approved for investments in advanced chemistry cell (ACC) battery manufacturing and worth INR 26,058 crore (US$3.5 billion) approved for automotive manufacturing focusing on EVs and hydrogen fuel cell vehicles.

National Electric Mobility Mission Plan (NEMMP) 2020

• Target of deploying 5 to 7 million electric vehicles in the country by 2020
• Emphasizes importance of government incentives and coordination between industry and academia
• Target of 400,000 passenger battery electric cars (BEVs) by 2020 ~ avoiding 120 million barrels of oil and 4 million tons of CO₂
• Lowering of vehicular emissions by 1.3 percent by 2020
• Total investment required – INR 20,000 – 23,000 cr (approx 3 billion USD)

e-Rikshaw

• The Government of India announced the DeenDayal scheme in June 2014, which would help in the financing and procurement of the battery rickshaws in the country.
• In March 2015 the Motor Vehicles (Amendment) Bill was cleared establishing battery-powered e-rickshaws as a valid form of commercial transport
• 3 wheeled vehicles run by battery power of no more than 4,000 Watts
• 4 passengers, luggage of 50 kg and with a single trip under 25 kilometers
• The number of battery operated e - rickshaws in Delhi has risen from 4,000 in 2010 to more than 1,00,000 in 2014, and is now an integral part of the transport eco-system in the state.
• In January 2014, Tripura became the first state in India to regulate the functioning of the e-rickshaws, and they came up with the Tripura Battery Operated Rickshaw Rules 2014 for the purpose. Tripura Battery Operated Rickshaw Rules 2014 consists norms / guidelines such as driver age limits, license fee, renewal fee, Road Tax, provision for vehicle fitness certificate, insurance for e-rickshaw and identification of routes for operation of these vehicles.

FAME India scheme

The Department of Heavy Industry is administering the scheme “Faster Adoption and Manufacturing of Electric and Hybrid Vehciles in India”, popularly known as FAME India scheme since 01^st April 2015.

FAME Phase I

Under the scheme, subsidy is being given to 11 cities for launching electric buses, taxis and three-wheelers. The cities include Delhi, Ahmedabad, Bangalore, Jaipur, Mumbai, Lucknow, Hyderabad, Indore and Kolkata, plus two cities – Jammu and Guwahati under special category. The nine big cities in the list will be given subsidy for 40 buses each while Jammu and Guwahati will get for 15 buses each. Subsidy for taxis will be given to Ahmedabad ( 20 taxis), Bangalore (100 taxis), Indore ( 50 taxis) and Kolkata (200 taxis) – based on their demand. Bangalore will get subsidy for 500 three wheelers, Indore for 200 and Ahmedabad for 20. This comes to a total of 390  buses, 370 taxis and 720 three wheelers.

FAME Phase II

Government has approved Phase-II of FAME Scheme with an outlay of Rs. 10,000 Crore for a period of 3 years commencing from 1st April 2019. Out of total budgetary support, about 86 percent of fund has been allocated for Demand Incentive so as to create demand for xEVs in the country. This phase aims to generate demand by way of supporting 7000 e-Buses, 5 lakh e-3 Wheelers, 55000 e-4 Wheeler Passenger Cars (including Strong Hybrid) and 10 lakh e-2 Wheelers. However, depending upon off-take of different category of xEVs, these numbers may vary as the provision has been made for inter as well as intra segment wise fungibility.

Revision of Faster Adoption and Manufacturing of Electric Vehicles Phase II (FAME II) demand incentives for electric 2-wheelers (e-2W) from INR 10,000 per kWh to INR 15,000 per kWh. Incentive cap increased from 20 percent to 40 percent of the capital cost of the e-2W. Energy Efficiency Services Limited (EESL) will be
responsible for aggregating and leasing 3 lakh electric 3-wheelers (e-3W) as well as electric buses (e-buses) available under FAME II.

Only advanced battery and registered vehicles will be incentivized under the scheme. With greater emphasis on providing affordable & environment friendly public transportation options for the masses, scheme will be applicable mainly to vehicles used for public transport or those registered for commercial purposes in e-3W, e-4W and e-bus segments. However, privately owned  registered e-2Ws are also  covered under the scheme as a mass segment.

To know more details, click here.

Drivers for growth of electric vehicles in India

• Thirteen out of 20 cities in the world with highest air pollution are in India  It is envisaged that Low carbon scenario with ‘highest’ EV penetration shows 50 percent drop in PM 2.5 by 2035 (UNEP, DTU and IIM- A).
• Master plans for most cities in India target 60 - 80 per cent public transport ridership by 2025 - 2030 (Center for Science and Environment)
• With the Government of India targeting 100 GW of solar by 2022, electric vehicles can improve reliability and utilization of renewable by acting as storage
• However, there needs to be proper planning with reference to monitoring and control of charging infrastructure as unplanned increase in penetration of EVs in an area can lead to increase in peak load of already stressed distribution network.
• Large scale penetration of EVs will require both demand side incentives (e.g., tax incentives) and improved charging infrastructures as well as integrated planning for distribution Grid management.
• EVs offer the opportunity to act as a distributed storage in the urban energy system which could help in better integration of intermittent renewables like wind and solar and can feed the grid at peak timings if price incentives are designed in terms of dynamic tariff as part of Smart Grid implementation.

State EV policies

The following states have EV policies in place

• Andhra Pradesh Electric Mobility Policy 2018-23
• Electric Vehicle Policy of Assam 2021
• Goa EV Concessional Charging Infrastructure Policy-2021
• Gujarat State Electric Vehicle Policy 2021
• Maharashtra Electric Vehicle Policy, 2021
• Karnataka Electric Vehicle & Energy Storage Policy 2017
• Kerala Electric Vehicle Policy 2019
• Delhi Electric Vehicles Policy, 2020
• Uttarakhand Electric Vehicles Policy 2019
• Madhya Pradesh Electric Vehicle (EV) Policy 2019
• Tamil Nadu Electric Vehicle (EV) Policy 2019
• Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy 2019
• Telangana Electric Vehicle & Energy Storage Policy 2020-2030
• Draft Bihar Electric Vehicle Policy 2019
• Haryana Electric Vehicles Policy
• Punjab Electric Vehicles Policy 2019
• Meghalaya Electric Vehicle Policy 2021
• Odisha Electric Vehicle Policy 2021
• West Bengal Electric Vehicle Policy 2021

Recommendations

1. Adequate capacity addition primarily through Renewables in distribution grid in order to meet additional demand created by high penetration of EVs.
2. EV charging station to be designed preferably with rooftop solar generation to minimize dependence on fossil fuels in entire supply chain hence shifting towards clean energy.
3. Encourage EV manufacturers to design vehicles with changeable batteries, so that EV owner can just move in the charging station, replace his battery with fully charged battery and move on. The charging station can plan to charge the batteries during off peak time at reduced electricity tariff or direct from roof top solar power.
4. Use of dynamic pricing model and smart grid tools for charging stations to encourage charging at non - peak timings hence aiding to Peak Load Management.
5. Area wise integrated planning of public transport, EV promotion and Renewable Generation with dynamic pricing of electricity and Smart Grid tools for monitoring and control.
6. Adoption of EV standards Charging connector standards are being developed by Automotive Research Association of India. Rating of charging sockets: Does household 16A sockets are good enough for household EV charging? Or does it need industry standard sockets?
7. Utility to sanction installation of charging point at homes for EV charging based on available capacity of distribution grid in that area.
8. Identification of EV charging nodes in the existing distribution network without affecting the voltage profile of the network.
9. Suitable pricing mechanism to be developed, in case Utility needs to augment the distribution grid to support EV charging.
10. Intelligent Charging Stations equipped with Fast chargers, timers and capable of switching to normal charging mode based on real time grid conditions/parameters.
11. Battery disposal /recycling norms as per ( Batteries (Management and Handling) Rules, 2001 ) published by Ministry of Environment, Forest and Climate Change need to be strictly enforced so as to prevent adverse environmental impacts of battery.
12. Investment in R&D for future battery technologies resulting in batteries with much higher specific energy, environment friendly and lower costs. As batteries constitutes 50% cost of EV’s.
13. Other initiatives that may help scale up EV in cities include local plans for electric vehicles, subsidies, dedicated parking and related incentives, use of information technology (IT) to locate charging stations, collaboration with private companies, as well as public car share and lease.

Source : Electric vehicles in India and its impact on Grid - Compiled by NSGM - PMU

Inclusion of EVs in Priority Sector Lending Guidelines

• Cumulative investment in India’s electric vehicle (EV) transition could be as large as INR 19.7 lakh crore ($US266 billion) between 2020 and 2030, highlighting the need for higher liquidity and lower cost of capital for EV assets and infrastructure. The recently announced first-loss risk-sharing instrument led by NITI Aayog and the World Bank has the potential to meet this gap.
• Including EVs in the Reserve Bank of India’s priority sector lending (PSL) guidelines can complement the $US300 million facility and encourage the financial sector to mobilise necessary capital.
• Priority sector lending mandates certain banks to direct a specified percentage of bank credit to priority sectors. Inclusion for retail lending to EVs has the potential to increase investor confidence by providing a market signal of ongoing government commitment to the sector. It can also ensure a swift and equitable transition by providing a mandate for financial institutions to direct credit to segments and use cases where credit deficiency persists despite compelling economics. 
• Electric two- and three-wheelers, as well as fourwheelers in commercial use cases, represent favourable segments towards inclusion of EVs in priority sector lending due to greater need for formal credit, higher potential for job creation and scale in urban and rural areas, relatively high sales forecasts, greater model availability, and smaller gap to parity in total cost of ownership.
• To operationalise the concept of including EVs in priority sector lending, central government policymakers can liaise with the Reserve Bank of India to design and issue the requisite guidelines. Financial institutions and the EV ecosystem can contribute by outlining how PSL inclusion can influence their growth and investment plans. This report can serve as the basis for this discussion.
• While this intervention is promising, it will not solve the financing challenges alone and a variety of persistent risks to EV finance remain. Additional policy and market measures to address those challenges include statelevel fiscal incentives, open data on vehicle performance, industry-led buyback programmes, and loan guarantee facilities.

Source : NITI Aayog, RMI, and RMI India, Banking on Electric Vehicles in India: A Blueprint for Inclusion of EVs in Priority Sector Lending Guidelines, January 2022