The 2022 Trends in Charging Ecosystem Development for 2/3W EVs

EVBy all accounts, the Indian EV market is witnessing an uptick especially in the 2 and 3-wheeler space. The November 2021 sales of electric 2Ws showed over 200 % yoy growth registering over 40k unit sales in a month for the first time. Till then over 120,000 2W EVs were registered – a number that’s already over 4x of the number of 2W EVs registered until November in the previous year.

At the same time, there are over 2 million electric 3Ws on roads – a majority of them being e-rickshaws – a common sight in most parts of north and east India. This market as well is witnessing a 33% CAGR with over 10 million electric 3Ws expected on roads in the next half a decade.

Unlike other parts of the world, this uptick is mainly being driven by the favourable economics of owning an electric 2/3W compared to its petrol counterpart. This favourable economics is on account of the high price of petrol, favourable subsidies and increased prices of BS-VI petrol 2/3Ws.

We are also witnessing well-funded startups and legacy companies bringing their EV manufacturing online. Ola Electric has set up the world’s largest scooter factory in Tamil Nadu and over INR 5000 crores have been committed to the manufacturing of electric 2/3W EVs by the likes of Bounce, Ather, Bajaj and TVS.

All this is great news for the electrification of transport in India. India is primarily a 2-wheeler market for personal and 3-wheeler market for public transport with 80% of India’s automotive sales happening in the 2/3W market. Electrification of this segment can significantly reduce emissions from transport in India.

Despite the growth in sales of 2 and 3-W EVs in India, there has not been significant growth in the charging infrastructure. There are only ~1000 public EV chargers in India. We still hear about concerns regarding charging. There are pictures of electric scooters being charged in someone’s kitchen because they didn’t have access to a charging point in their parking area.

It is also not clear yet which form of charging will dominate the Indian 2/3W EV landscape.

Methods for 2/3W EV charging

There are 2 ways in which 2/3W EVs can be charged today. The first is via a plug-in charger where the users might have to wait for up to 3-5 hours to fully charge their vehicles. The second is via battery swapping stations where the user can exchange a discharged battery pack for a fully charged one within two minutes akin to a petrol pump.

Today the jury is still out in terms of which of the 2 methods are likely to dominate the 2/3W EV charging. Two factors that decide how the end users will recharge are the use case and the battery form factors that the vehicle manufacturers will build into their vehicles.

For users whose vehicles might be parked for extensive periods (e.g. a personal/commuter EV), a plug-in charging type mechanism can help address their charging needs. On the other hand, vehicles which need to be constantly on the move (e.g. a commercial EV), battery swapping would be the best option as it would ensure maximum uptime of the EV.

Vehicle manufacturers are taking a bet on charging v/s swapping by building vehicles with fixed and swappable batteries respectively. OEMs like Ather Energy and Ola Electric have designed vehicles with a fixed battery whereas Hero Motocorp (in partnership with Gogoro) and Bounce Infinity plan on deploying a fully swappable solution.

Interestingly, some OEMs like Piaggio are also taking a hybrid approach where they are building vehicles with fixed and swappable battery platforms allowing end users to choose depending on their use cases and access to charging/swapping points.

What is taking shape in 2022

It is estimated that we will need over 300,000 charging points by 2026 to cater to the needs of the growing 2/3 W EV market. To support the deployments of charging infra in India, there are in place various policies and incentives already in place at the central and state level.

The central government via its FAME policy has budgeted for Rs.1000 crore towards deployment of public charging infrastructure. At the same time, state governments have provided additional incentives in their respective EV policies for deployment of charging infrastructure. For example, the Maharashtra EV policy provides incentives of up to INR 10,000 for slow chargers which are typically used by 2/3W EVs. For captive charging, the governments like Delhi have mandated in 2021 that 5% of all parking spots be reserved for setting up of EV charging points.

A combination of such incentives and an increased ownership of 2/3W EVs mean that many of the charging infrastructure business models that were earlier unviable have started to make sense. If 2021 was the year EV adoption took off, 2022 is the year that EV infra deployments will take off.

The deployment of this charging infra will be led by OEMs like Ola Electric, Bounce Infinity, DISCOMs (like Tata Power to set up up to 1000 public charging points), Energy companies (like BPCL and IOCL in partnership with OEMs, and charging point operators) and third party charging point operators (like Magenta).

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