EVs vs EV Infrastructure: Chicken and Egg IssueUPDATED DEC 04, 2021 - 15 MIN READ
Table of Contents
- Key attributes involved in manufacturing of electric vehicles
- Key attributes of EV charging infrastructure
The transition from traditional mobility to electric mobility is emerging as a promising strategy for controlling the greenhouse gas impact globally. Almost all the countries, including India, are encouraging the manufacturing and sales of electric vehicles to develop a successful EV ecosystem in the coming future. The primary demand of this ecosystem is to create a robust network of charging infrastructure. The entire set-up of electric vehicle charging infrastructure should satisfy the present and the future needs of this evolving electric vehicle technology system.
The schemes for incentivising the manufacturing of electric vehicles and the development of charging infrastructure are equally important for the development of the electric vehicle market in India. Development of electric vehicles and charging infrastructure is highly interrelated. Additionally, each of these subsystems requires significant investments in terms of technology, expenditure and participation by various stakeholders. This is where there exists a deep dilemma among public and private players with respect to which ecosystem to build first-electric vehicles or the charging infrastructure. The policy makers need to recognize the dependency of these two aspects on each other to solve this chicken and egg riddle of which needs to come first: the electric vehicle itself or the charging infrastructure.
Key attributes involved in manufacturing of electric vehicles
Consumers need a wide variety of electric vehicles in the market so they have multiple options available against conventional vehicles.
There is no doubt that the OEMs are benefited with subsidized offers but the price of electric vehicles remains high as compared to their ICE counterparts. Further, customers demand multiple models, variety, features in electric vehicles and payment options to make the purchase decision. Now, it becomes a crucial point for the EV manufacturing companies to provide best EV features and models while keeping cost under control.
New models are getting launched as a number of small to medium scale companies are joining this industry. These players are producing highly efficient models using automated and advanced technologies. To make EV manufacturing business more profitable and sustainable, it needs further push from the government. The government should seamlessly implement existing policies and introduce new schemes to drive major automakers toward electric vehicles.
In order to support clean mobility in India, the schemes under National Electric Mobility Mission Plan (NEMMP), FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicle) I and II are currently being implemented. Under the National Mission on Transformative Mobility and Battery Storage, various objectives are getting pursued that include promoting the manufacturing and localizing the battery and subparts of the electric vehicles to achieve a clean, connected and sustainable e-mobility environment.
This Mission will help in developing and manufacturing of the vehicle sub-parts within the country. Thus the import cost for these parts can be easily reduced and it also supports low cost manufacturing of electric vehicles. This has a positive impact on reducing the upfront cost for the end consumers, which is one of the primary barriers to the adoption of electric vehicles in India.
Key attributes of EV charging infrastructure
Charging infrastructure implementation is a complex task in India as the EV charging is not standardized. It creates a lot of confusion for the consumers as well as the investors who are playing a leading role in the wider adoption of electric vehicles in India. Therefore, EV charging standardization is very critical and helps in reducing the cost of implementing a charging infrastructure. A well-established charging infrastructure will ensure that the consumers need not worry about the refuelling of the discharged batteries on their trip.
Additionally, Indian companies who have invested in the business of charging infrastructure need to spend a hefty amount to buy charging licenses from the authorities of other countries. The business needs high investments in terms of installation cost, maintenance charges of the equipment, etc. The charging infrastructure owners manage to earn negligible or only small profit margins from this business. Therefore, it creates a barrier for new players to invest into this business and to build a dense network of charging infrastructure across the country.
Understanding the need of expansion of the electric vehicles in the market, the Government is framing policies which are emphasising on setting more and more charging infrastructure across different locations. This will be helpful in creating a reliable charging environment for EV consumers and open new opportunities for new business players to invest their money. This will be helpful in making electric vehicles more attractive and convenient for the consumers.
The setting up of a charging infrastructure needs systematic planning, authorization and final execution. This approach takes into consideration a few other parameters such as location, type of energy used and time needed to charge the electric vehicles. The existing policies help in providing resource and finance assistance so that the charging infrastructure can be expanded in the country to satisfy the growing demand of electric vehicles.
The EV driver's priority is to spend minimum time on charging their vehicle battery. Therefore, other charging models such as battery swapping should also be evaluated. This model allows drivers to easily exchange a discharged battery with the charged one in minimum time and offer a number of other benefits to the consumers.
One of the major factors that plays a key role in restricting the expansion of charging infrastructure is the time needed to set up EV infrastructure. The leading players in this area consider it as an investment opportunity with long gestation period and minimal returns. They have to explore other alternatives to help drive revenue from this business.
The government has implemented various schemes to subsidise the set up business of charging infrastructure, improve the usage of electric cars in government vehicles, increase the incentives for purchasing the electric vehicles and promote funding initiatives around electric cars.
Fig: EVs or Infrastructure
To truly popularize electric vehicles among the consumers, it is needed to boost the production of electric vehicles as well as implementation of wide charging infrastructure in the country. This can ensure that India can take leadership in building a sustainable e-mobility ecosystem.
This transport system has the potential to completely run on renewable resources thus providing a cleaner and better landscape for a healthy living. To attain a sustainable environment, the investment into the EV infrastructure implementation can be considered to be an investment in the future of our country.
EV - Electric Vehicle
OEM - Original Equipment Manufacturers
ICE - Internal Combustion Engine
NEMMP - National Electric Mobility Mission Plan
FAME - Faster Adoption and Manufacturing of Hybrid and Electric Vehicle