Policy

Govt’s plan to set up e-charging kiosks across 69k stations is beset with challenges

Nandana James Mumbai | Updated on November 27, 2020

Charging an e-car takes hours is another concern flagged by players and experts   -  Kamal Narang

To accelerate EV adoption, revenue and profit concerns, implementation issues must be addressed

The government’s plan to set up at least one e-charging kiosk at around 69,000 petrol pumps across the country will be pivotal in allaying the problem of range anxiety in the adoption of electric vehicles, said experts. But the prospect of revenue and profit remains uncertain as the current EV stations in India are not viable, they said.

The economic feasibility of the plan, the sharing of capital and real estate costs, and the issue of pump owners letting go of a part of their space — especially as it takes hours to charge an EV — and not generating enough revenue from this, are other challenges, they said.

E-mobility push

Union Minister Nitin Gadkari had announced this measure in a recent release to encourage electric mobility.

The current EV stations are not viable, as pointed out by Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles and Rameesh Kailasam, CEO, IndiaTech.org, a think-tank for Indian start-ups.

It’s mostly electric cars that use such EV stations and since they are few in number — not more than 15,000 units — this has posed a challenge in these charging stations, said Gill. Besides, electric two-wheelers and three-wheelers do not rely much on public charging stations, he said. Electric two-wheelers don’t usually travel long distances and use portable batteries, while e-rickshaws resort to battery swapping — since they are commercial vehicles, they cannot afford to wait for many hours to charge at a station and lose revenue, he explained.

The big question is how many petrol pumps will agree to have an e-charging kiosk, given the very few electric cars on the road, said Gill. “Generating enough revenue for the pump owners to let go of a part of their precious space could be another challenge as none of the current stations catering to e-cars is getting adequate returns nor would they perhaps be able to earn much in the next few years as there are hardly any e-cars to charge,” he added.

Implementation

While this move will help accelerate EV adoption, the implementation will take time, as factors such as identifying charging providers, availability of space along with a grid infrastructure at the designated kiosks, as well as other logistical requirements have to be taken into account, said Shailesh Chandra, President of the Tata Motors’ passenger vehicle business unit.

Providing sufficient space for parking EVs, especially e-cars — for a few hours while they are being charged — could be a challenge that needs to be addressed while setting up such stations, said Gill.

That charging an EV — especially an e-car — takes hours is another concern flagged by players and experts.

Even a car equipped with DC fast charging would typically require an hour to get charged to 80 per cent, said Hetal Gandhi, Director, CRISIL Research. Given these factors, it is difficult to keep a vehicle under charging at a petrol pump for a significant time period until it gets fully charged, she said. “As a result, these charging kiosks are only expected to serve as outlets to avail of ‘top-up’ charging so as to complete a journey especially in areas of high EV density. Thus, home charging would still remain a critical element even after the availability of such charging kiosks.”

Other issues

Also, the number of charging guns available at a kiosk will determine the numbers of vehicles that can be simultaneously charged, Gandhi added.

Of the challenges in the setting up e-charging stations, especially at petrol pumps, Kailasam said, “Most petrol pumps have reasonable land space which they currently lease out to bank ATMs or stores and earn reasonable rental incomes. If the government proposes to set up fixed charging stations for two-, three- and four-wheelers, it may not be economically feasible as it will require significant funding either from oil companies or their dealers or both,” he explained.

Under the current model, fuel outlets run on dealership models wherein they earn certain margins from the OMCs for each unit of good retailed, said Suraj Ghosh, Principal Analyst - Powertrain Forecasts, IHS Markit. “But if charging stations have to be set up, the dealerships or OMCs will have to partner with specialised players and put in new investments. So, basically it will be like integrating a different business model into your existing model, which could pose some fundamental challenges — be it looking for a technology partner, additional real estate, compliances for EV charging set-up or creating a new revenue model,” Ghosh explained.

A mix of battery swapping and charging station would perhaps be optimal as it would cater to all sorts of EVs, and if done quickly and in sufficient density, could address the issue of range anxiety in a big way, affirmed Gill. This also ensures more revenue, he pointed out.

A phased approach would be ideal, wherein phase one would include installing charging points at fuel stations in metropolitan cities with existing EV infrastructure, Chandra pointed out. In the second phase, chargers and outlets can also be installed on key national highways, he added. Considering that petrol pumps are located at strategic locations based on traffic densities, this will help reduce the range anxiety among EV owners, as it will allow them to charge the vehicle at their own convenience, he explained.

Moreover, such initiatives need to be further supported by drastic policy interventions and fiscal incentives for an actual uptake to happen, said Kailasam.

Published on November 27, 2020

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