Mint Sustainability Summit: EV adoption in India faces inadequate charging facilities and the rise of alternative fuels

New Delhi: The slow adoption of electric vehicles (EVs) in India is due to the relentless need to find alternative fuels and lack of adequate charging infrastructure in the country, according to industry leaders speaking at the Mint Sustainability Summit 2024 on Tuesday.

According to Harsh Kapoor, partner at Monitor Deloitte, EV adoption has been complicated by the push for various alternative fuels, such as hydrogen, although LNG is considered a solid transitional alternative fuel. However, he said EVs are not the only category being affected by slowing sales.

“Global auto sales are in decline, so it’s not just electric vehicle sales that are under pressure,” Kapoor said.

While EV sales in India have been growing, they are dominated by two- and three-wheelers. In fiscal 2024, the number of EVs sold in the country rose to 1.67 million from 1.17 million in fiscal 2023, according to data on the Society of Manufacturers of Electric Vehicles (SMEV) website. Sales of four-wheeled EVs rose to 90,432 from 47,499 units.

Challenges facing the electric vehicle industry include inadequate charging infrastructure, lack of standardized charging standards, evolving battery technologies, and high upfront costs.

Anand Mimani, CEO of Greenline Mobility Solutions, said financing remains a major concern for alternative fuel vehicles in the country.

“No bank or anyone else wants to finance it easily. If the government gives a little push, adoption can be much faster,” he said.

Subsidies are not the solution

However, Aanchal Jain, CEO of PMI Electro Mobility Solutions, a global technology company specialising in advanced manufacturing of electric buses, said subsidies are never a long-term and sustainable solution. India has reached a stage where subsidies for intercity buses are no longer necessary, she added.

“The prices that have been discovered for tenders for electric buses without subsidies have been lower than those discovered with subsidies previously. This is due to economies of scale. Our production is no longer tied to subsidies,” he said. “Subsidies are no longer necessary for intra-city electric buses. However, for other new sectors such as school buses and inter-city buses, subsidies may be needed to boost demand.”

Sales of electric buses increased to 3,693 in fiscal year 2024, up from 1,984 in the previous year. As of August 20 of the current fiscal year, 1,251 electric buses had been sold, according to information on the SMEV website.

According to Kapoor, there are additional challenges hindering the adoption of new technologies in vehicles, such as total cost of ownership, including resale value, and price stability of fuels such as LNG.

“Technology is not the only limitation to the adoption of new technologies in vehicles,” he said.

Anmol Jaggi, CEO of BluSmart, an all-electric taxi service, expressed disappointment at the lack of new EV models and said the growth of charging infrastructure remains a challenge.

“I am a little disappointed that there are no new EV models in the market. I would like to see at least 25 models in the market,” Jaggi said. “When we started in 2019, EV charging was the biggest problem. Even in 2024, charging is the biggest problem despite installing thousands and thousands of chargers.”

Jaggi said the two main factors affecting charging infrastructure are terrain and load. A huge investment is required to strengthen the distribution and transmission infrastructure, he added.

“The current grid cannot support the load of so many electric vehicles coming onto the grid,” he said.

Jaggi said that given the current market situation, achieving a 10% market share for electric four-wheelers by 2030 could be difficult. Electric vehicles accounted for 6.5% of total vehicle sales in 2023, according to JMK Research & Analytics Private Ltd, a specialist research and consultancy firm.

India wants electric vehicles to account for 30% of all vehicle sales in the country by 2030.