Distribution Companies can benefits from and support India’s EV revolution

With systematic and advance planning, DISCOMs can profit from the acceleration of EVs and support the growth of charging infrastructure

The future of transport electrification is looking bright in India and market trends predict that by 2030, at least 5 crore (50 million) EVs could be driving on Indian roads. As the penetration of electric vehicles and charging infrastructure increases, the role of power generation and distribution companies will become increasingly important to ensure clean and consistent electricity supply for EVs, as well as to support the growth of charging infrastructure in the country.

Distribution companies (DISCOMS) in particular have a key role to play as they will have to identify and predict EV loads, control charging time for better grid management, upgrade sanctioned loads, cables, wiring, metering and other electrical infrastructure. This requires high capital investment which India’s cash trapped DISCOMs are not incentivised to undertake. However, this growth in electric vehicles is a huge opportunity for them as every EV owner will become a new customer.

DISCOMs have a lot to gain from electric vehicle growth in India

By 2030, a report by ASSOCHAM and EY predicts that DISCOMs could earn up to $11 billion in revenue from the increased use of electricity by EVs, which would grow to roughly 69.6TWh. Further, evidence suggests that in India, 80% of EV charging happens at home, with only 10 - 15% happening at public charging stations, mostly for “top-up” charging. This is an opportunity for DISCOMs to significantly grow their consumer base as every EV sold will be a new customer. For example, a premium electric car needs at least 20 times the energy consumed by a typical refrigerator. Given that this car would be charged at home 80% of the time, DISCOMs can profit from the increased electricity use in the long run if they invest in the infrastructure needed to upgrade the domestic household consumption load that enables home charging for the EV customer.

“It is time that DISCOMs change their mindset and view EVs as a resource. This is surety of business for them. If this opportunity is not grabbed, they will lose it to public charging infrastructure providers. DISCOMs already have the advantage of serving existing customers. By ensuring timely support for setting up home chargers and load upgrades, and incentivising customers to charge only when they are in energy surplus, DISCOMs can encourage EV users to charge at home, and help in grid load management. Since EVs are still at a nascent stage in India, DISCOMs have the advantage of experimenting with different technologies and be future ready by acting now.” said Shri Anil Kaushik, AGM, E-mobility, NTPC Vidyut Vyapar Nigam Limited, speaking at an event in Hyderabad.

Fig 1: Nearly 80% of charging in India happens at home, making every EV owner a potential customer for DISCOMs

Further, with the right vehicle grid integration strategies, DISCOMs can address the biggest upcoming challenge of grid stability and reliability of power. EVs can essentially act as decentralised battery storage units, and several can be rigged together to feed power back to the grid during peak power demand, which is the main premise of Vehicle to Grid projects (V2G). Further, customers perceive them as a trustworthy source of information, placing them in a unique position to influence behaviour by educating customers on the best practices for charging EVs, including when, where and how to charge. This would be critical to manage and balance grid loads in the future.

Fig 2: The growth of EVs is an opportunity to experiment with Vehicle to Grid pilot projects for DISCOMS Source: AEEE

A good example of the proactive role of DISCOMs comes from Delhi, which has the highest number of EVs in India. Mr. Pradeep Aggarwal, Manager (E-Mobility), Delhi BSES Rajdhani Power Ltd., says “We see EV users as customers and are devising ways to address their needs. EV customers want hassle free installation of private chargers at their homes, a separate EV connection, net metering, and promotional tariffs. For this, we have completely digitised everything related to EV charging - procedures for application of charging points, government regulations, safety guidelines - it is a single window for customers. We have no fixed charges or incremental tariffs for units used for EVs. We apply Time of Day tariffs, with a 20% surcharge during peak hours and a 20% discount during off peak hours. This incentivises users to charge EVs only during lean periods, which helps us manage the load.”

Government support and incentives can help DISCOMs play a stronger role in India’s e-mobility journey

Globally, DISCOMs are already playing a key role in increasing charging infrastructure. China, which has the largest charging network in the world with a ratio of 2.55 vehicles per charging point, achieved this through dedicated policies aimed to build charging infrastructure. Close to 60% of its EV charging happens through public chargers and 40% at home. Around 2015, the country released various stand alone national and provincial policies and implementation rules regarding charging infrastructure development, including a directive to incorporate construction and upgrading of distribution grids into local planning. This ensured that grid companies were future ready to provide power supply for the growing demand from EVs. They were directed to ensure all “make-ready” requirements for home charging were implemented for free and cost recovery was achieved through electricity tariffs. Today, close to 20% of public charging stations in China are operated by China State Grid and China Southern Grid, and many are implementing V2G pilot projects as well.

For India’s DISCOMs, the high capital investment needed to upgrade their grids seems like an insurmountable hurdle. “In the US, some studies estimate that the cost of grid upgradation in the next 10 years is close to $1,700 - 5,700 per electric vehicle. Such a study has not been done in India, but this shows the level of investments needed. The Indian government and DISCOMs will have to find innovative financing mechanisms to support this transition” says Shri Ajay Mishra (IAS Retd.), Former Special Chief Secretary, Energy Department, Government of Telangana.

With the national and various state governments aiming for a significant shift to e-mobility, EV policies could also include financial provisions, incentives and directives for DISCOMs to ramp up grid infrastructure and develop technological solutions. “Any investment of public funds going towards EV charging reaps 6X more adoption in EVs than providing subsidies. Our state and national level policies should think about how to maximise the results from their investments. Supporting DISCOMs in building charging infrastructure and grid management is the need of the hour.” highlights Ms. Pramoda Gode, Consultant, E-mobility.

Impact of EV Charging on DISCOMs Cost of Supply: A Case Study of Delhi

As the automobile sector transitions from conventional to electric vehicles (EVs) globally, electricity distribution utilities (DISCOMs) become critical to facilitate EV charging.

Infographic: Enabling DISCOMS to Scale EV Charging

As the automobile sector transitions from conventional to electric vehicles (EVs) globally, electricity distribution utilities (DISCOMs) become critical to facilitate EV charging.

EV Segment	Demand Incentives
Electric 2-wheeler	Purchase incentive of Rs. 5,000/- per kWh of battery capacity; Maximum incentive of Rs. 30,000/- per vehicle Incentive for scrapping and de-registering old ICE two wheelers registered in Delhi: Up to Rs. 5,000/- of the incentive shall be reimbursed by the GNCTD All delivery service providers shall be expected to convert 50% of their fleet operating in Delhi to electric by 3V March, 2023 and 100% by 31st March, 2025.
E-Autos	Open permit system shall be applicable & be given on first-come-first-serve basis; no cap on permits issued to e-autos in Delhi Purchase Incentive of Rs. 30,000/- per vehicle shall be provided by GNCTD Interest subvention of 5% on loans and/or hire purchase scheme for the purchase of an e-auto Incentive for scrapping and de-registering old ICE auto rickshaws registered in Delhi: Up to Rs. 7,500/- of the incentive shall be reimbursed by the GNCTD The auto-rickshaw permits linked to the de-registered ICE vehicle can be surrendered and exchanged for an e-auto permit at no additional cost.
E-rickshaws & E-carts	Purchase Incentive of Rs. 30,000/- per vehicle shall be provided by GNCTD Interest subvention of 5% on loans and/or hire purchase schemes Buses
E-buses	Pure electric buses shall constitute at least 50% of all new stage-carriage buses (i.e., for all public transport vehicles with 15 seats or more) procured for the city fleet including for last-mile connectivity Induction of 1000 pure electric buses by 2020
Goods Carriers	A Purchase Incentive of Rs. 30,000/- to the first 10,000 e-Carriers to be registered in Delhi after the issuance of this policy. Interest subvention of 5% on loans and/or hire purchase schemes. Incentive for scrapping and de-registering old ICE goods carriers registered in Delhi: Up to Rs. 7,500/- of the Incentive shall be reimbursed by the GNCTD Goods carriers (i.e., L5N and N1 type)
Four wheeler	Purchase Incentive of Rs. 10,000/- per kWh of battery capacity Maximum incentive of Rs. 1,50,000/- per vehicle to the registered owners of the first 1000 e-cars to be registered in Delhi after the issuance of this policy

Vehicle Segment	Battery Size in KWH (approx.)	State Subsidy Amount(Rs.)	Total State Subsidy (Rs.)	Maximum ex-factory price to avail incentive (Rs.)
Electric Two wheeler	2 KWH	10000/- per kWh	20000/-	1,50,000
Electric Three wheeler	5 KWH	10000/- per kWh	50000/-	5,00,000
Electric Four wheeler	15 KWH	10000/- per kWh	150000/-	15,00,000

Sr No	Vehicle segment	Number of EVs	State subsidy
1	2W	100	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.30,000/- per vehicle.
2	3W	50	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.50,000/- per vehicle.
3	4W	50	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.2,00,000/- per vehicle

Sr. No	Owner of PCS	Subsidy
1	Retail Outlet of Oil Marketing Companies	15% of the cost of putting up Public Charging Infrastructures and Stations will be reimbursed by the State Govt. in the form of subsidy/ incentive.
2	Local Entrepreneurs	25% of the cost of putting up Public Charging Infrastructures and Stations will be reimbursed by the State Govt. in the form of subsidy/ incentive

Sr No	Vehicle segment	Ceiling for Early Bird	2023 – 2027
1	2W	35	172
2	3W(E-Rickshaw/ E-Cart)	10	40
3	3W	10	40
4	Car(Including Taxis)	40	167
5	Bus	11	49
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	10	41
Total	–	116	509

Distribution Companies can benefits from and support India’s EV revolution

Editorial Team

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Impact of EV Charging on DISCOMs Cost of Supply: A Case Study of Delhi

Infographic: Enabling DISCOMS to Scale EV Charging

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5 kWh

Sr No	Vehicle Segment	Subsidy (Whichever Is Lower)	Maximum ExShowroom Price to Avail (INR)
1	Two-Wheeler	10% of the Ex-Showroom Price or INR 15,000	1,50,000
2	Three-Wheeler – e Rickshaw / e-cart	10% of the Ex-Showroom Price or INR 30,000	3,00,000
3	Three-Wheeler	10% of the Ex-Showroom Price or INR 50,000	5,00,000
4	Car	10% of the Ex-Showroom Price or INR 2,50,000	25,00,000
5	Bus	25% of the Ex-Showroom Price or INR 50,00,000	2,00,00,000
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	10% of the Ex-Showroom Price or INR 3,00,000	30,00,000

Sr No	Vehicle Segment	Subsidy (Whichever Is Lower)	Maximum ExShowroom Price to Avail (INR)	No of EVs to be subsdised
1	Two-Wheeler	20% of the Ex-Showroom Price or INR 60,000	1,50,000	28
2	Three-Wheeler – e Rickshaw / e-cart	20% of the Ex-Showroom Price or INR 60,000	3,00,000	10
3	Three-Wheeler	20% of the Ex-Showroom Price or INR 1,00,000	5,00,000	10
4	Car	20% of the Ex-Showroom Price or INR 5,00,000	25,00,000	33
5	Bus	50% of the Ex-Showroom Price or INR 1,00,00,000	2,00,00,000	11
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	20% of the Ex-Showroom Price or INR 6,00,000	30,00,000	9
Total				101

Sr. No	Classification of EV	2022-23	2023-24	2024-25	2025-26	2026-27	Total
1	2W	2,000	8000	20,000	54,000	85,000	1,69,000
2	3W	200	800	2000	4,000	10,000	17,000
3	4W(Non Commercial)	100	400	1400	3,000	7,000	12,000
4	4W(Commercial)	10	40	100	300	650	1,100
5	Buses	10	25	65	200	600	900
	Total						2,00,000

Vehicle Category	Incentive	Maximum Incentive	Number of Electric Vehicles to be incentivized
e-Bicycle	Upfront: 25% of Cost of Bicycle	Rs. 3,000	First 25,000 Bicycle purchased during the policy period
e-2W	Upfront : Fixed Battery: Rs. 5,000/kWh Swappable Battery: Rs. 3000/kWh Scrapping : Rs 5,000	Rs. 30,000 Rs. 15,000 Rs. 5,000	First 10,000 vehicles registered during the policy period
e-Cart	Upfront : Fixed Battery: Rs. 5000/kWh Swappable Battery: Rs. 3000/kWh Retrofit Kit: 15% of cost	Rs. 30,000 Rs. 10,000 Rs.10,000	First 1000 e-Carts registered during the policy period
e-Autos	Upfront : Fixed Battery: Rs. 5000/kWh Swappable Battery: Rs. 3000/kWh Retrofit Kit: 15% of cost Scrapping : Rs 7,500	Rs. 30,000 Rs. 15,000 Rs. 15,000 Rs. 7,500	First 1000 e-Autos registered during the policy period
e-Goods Carrier L5N	Upfront : Fixed Battery: Rs. 5000/kWh Retrofit Kit: 15% of cost Scrapping: 15,000	Rs. 50,000 Rs. 15,000 Rs. 15,000	First 1000 Goods Carrier L5N registered during the policy period
e-Goods Carrier N1	Upfront: Fixed Battery: Rs. 5000/kWh Retrofit Kit: 15% of cost Scrapping: 15,000	Rs. 80,000 Rs. 25,000 Rs. 15,000	First 1000 Goods Carrier N1 registered during the policy period
4 W- e-Cars (Personal)	Upfront: Fixed Battery: Rs. 5,000/kWh Scrapping: 7000	Rs. 1,50,000 Rs. 7,000	First 2000, 4 W- e-Cars (Personal) (including Hybrids as defined in FAME II) registered during the policy period. Applicable only for vehicles with ex showroom price below INR 20 lakhs
4 W- e-Cars (Commercial)	Upfront: Fixed Battery: Rs. 10,000/kWh Scrapping: 7000	Rs. 2,00,000 Rs. 7,000	First 1000, 4 W- e-Cars (Commercial) (including Hybrids as defined in FAME II) registered during the policy period

Vehicle Category	Early Bird Incentive	Maximum Early Bird Incentive
e-Bicycle	Rs. 2000	Rs. 2,000
e-2W, e-Cart, e-Autos, e Goods Carrier (L5N and N1), e-4W (personal & commercial)	Rs 3,500/kWh	Rs. 50,000

Category	Incentive	Maximum Incentive
Private Charging	Infrastructure Incentive: Grant on purchase and installation of charging equipment	Rs. 6,000	Only for the first 30,000 private chargers installed during the policy period.
Public Charging	Reimbursement of GST paid 100% reimbursement of GST paid on the Fast Charging/Swapping Electric Vehicle Supply Equipment (EVSE) procured by private enterprises/individual	Rs. 50,000	Only for the first 50 fast charging /Swapping EVSE installed during the policy period. (Will not be applicable on Chargers under Central Subsidy)
	Upfront electricity infrastructure: Upfront cost on infrastructure for bringing power supply to Electric Vehicle Charging Station	Rs. 5,00,000	Only for the first 50 Public fast Charging/Swapping Stations installed in the state during the policy period. (Will not be applicable on Chargers under Central Subsidy)
	Electricity Duty Exemption: 100% Electricity duty exemption for Public Charging and Swapping stations	For policy period	For policy period

Sr. No	Vehicle segment	Incentive available	Number of vehicles to be incentivised	Maximum incentive per vehicle
1	e-2W (L1 & L2)	INR 5000/kwh	1,00,000	10,000
2	e-3W autos (L5M)	INR 5000/kwh	15,000	30,000
3	e-3W goods carrier (L5N)	INR 5000/kwh	10,000	30,000
4	e-4W cars (M1)	INR 5000/kwh	10,000	1,50,000
5	e-4W goods carrier (N1)	INR 5000/kwh	10,000	1,00,000
6	e-buses* (SRTu)	10% vehicle cos (ex factory)	1000	20,00,000

Road Tax / Vehicle Registration Fees	Manufactured within the State	Manufactured outside the State
Exemption on Road Tax	100% exemption for first 10,000 buyers 75% exemption for 10,001-15000 buyers 25 % exemption after 15000 buyers upto policy period	25% upto policy period
Exemption from Vehicle Registration Fees	100% exemption for first 10,000 buyers 75% exemption for 10,001-15000 buyers 25 % exemption after 15000 buyers upto policy period	25% upto policy period

S No	Type of PCS/SPCS	Incentive amount	Maximum Incentive available per PCS/SPCS	Max number of PCS/SPCS to be incentivised
1	Slow	60% of the cost	INR 10,000	15,000
2	Moderate/Fast	50% of the cost	INR 5,00,000	500
3	Solar Based fast#	70% of the cost	INR 7,00,000	500

Type of Unit	Max Limit	Max Admissible Subsidy
Micro	30% of FCI	Rs 2 Cr
Small		Rs 7 Cr
Medium		Rs 15 Cr
Non MSME		Rs 30 Cr

Criteria	Threshold Value
Min. top speed	40km/hour
Min. acceleration	0.65m/s2
Max. electric energy consumption	Not exceeding 7kWh/ 100km
Warranty	At least 3 years comprehensive warranty including that of battery from the manufacturer

Incentives Description	Incentives
Assured Buyback	6% of total vehicle cost capped at INR 10,000/-
Battery warranty of at least 5 years	4% of total vehicle cost capped at INR 6,000/-

Vehicle Segment	Max vehicle to be supported	Approx. battery size	Approx incentive @10,000 per kWh
Electric 2 wheeler	24,000	2 kWh	20,000/-
Electric 3 wheeler	70,000	5 kWh	50,000/-
Electric 4 wheeler	4000	15 kWh	150,000/-
4 wheeler (SHEV)	1000	1.3 kwh	13,000/-
Electric bus	1000	250 kwh	25,00,000/-

Criteria	Threshold value
Min. top speed	40 km/hr
Min. acceleration	0.65 m/s2
Max. electric energy consumption Not exceeding	7 kWh/100km
Warranty	At least 3 years comprehensive warranty including that of battery from the manufacturer

Sr No	Vehicle Segment	Incentives
1	Assured Buyback,	6% of total vehicle cost capped at INR 10,000/-
2	Battery warranty of at least 5 years	4% of total vehicle cost capped at INR 6,000/-

Category of vehicle	% Of subsidy	The maximum amount of subsidy
Electric Two-wheelers	15%	Rs. 5000/-
Electric Three-wheelers	15%	Rs.12,000/-
Electric Four Wheelers	15%	Rs. 1,00,000/-

Vehicle Segment	Incentive Available ( INR)	No. of Vehicles to be Incentivized	Maximum Incentive per Vehicle (INR)
Electric Two Wheeler (L1 & L2)	5000/kwh	1,00,000	10,000
Electric 3 Wheeler autos (L5M)	5000/kwh	15,000	30,000
Electric 3 Wheeler goods carrier (L5N)	5000/kwh	10,000	30,000
Electric 4 Wheeler cars (M1)	5000/kwh	10,000	1,50,000
Electric 4 Wheeler goods carrier (N1)	5000/kwh	10,000	1,00,000
Electric buses	10% of vehicle Cost	1,000	20,00,000

Vehicle Segment	Scrappage Incentive
Electric Two-Wheeler	INR 7,000
Electric Three-Wheeler	INR 15,000
Electric Four Wheeler	INR 25,000

CHARGING STATION	Incentive
Small Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for first 300 charging stations up to a Maximum subsidy of INR 1,50,000
Medium Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for the first 100 stations up to a Maximum subsidy of INR 2,00,000.
Large Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for the first 100 stations up to a Maximum subsidy of INR 10,00,000.

Vehicle Segment	State Subsidy Amount (in Rs.)	Max ex-factory price to avail incentive (in Rs.)
2 wheeler	Rs. 10,000/- per kWh	1,.50,000
3 wheeler	Rs. 10,000/- per kWh	5,00,000
4-Wheeler	Rs. 10,000/- per kWh	15,00,000