It is necessary to understand the factors that an EV charging station must account for to make good financial sense and to serve the users in the optimal manner
The Confederation of Indian Industry (CII) estimated this year that India would need about 1.32 million EV chargers by 2030. At around 9,000, a tenth of India’s petrol pumps also now offer EV charging. However, when it comes to standalone chargers, not all locations will be suitable, and not all the charging stations will perform equally on utilisation rates and financial returns.
Fig. 1: A BPCL petrol pump that will offer eventually EV charging | Image: The Statesman
A SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is therefore necessary to understand how best to optimise their siting. This article explores the several factors that an EV charging station must account for to make good financial sense and to serve the users in the optimal manner.
Strengths of EV Charging Stations
- Growing demand
EVs currently account for around 7% of all new vehicle sales in India but the figure used to be next to nil only about 10 years ago. The growth of electric 2Ws and 3Ws has especially been impressive at more than 100% y-o-y as businesses in particular adopt them to lower their operational costs. Electric cars will also get a boost with the launch of Maruti’s eVX in 2024 and Tata Motors’ expanded electric lineup.Besides, the heavy vehicle category will undergo a strong expansion as well, as the PM e-Bus Sewa scheme gets underway to add 10,000 e-buses to Indian roads by 2030. The scheme will be supplemented by individual cities and states adopting their e-bus and e-truck targets, such as Delhi’s plan to add 8,000 electric buses to its fleet by 2025.
Fig. 2: Delhi’s electric bus fleet is set to grow by another 8,000 units by 2025 | Image: Business Standard
These applications will require ready access to charging stations, and the future of mobility in India is decidedly electric.
- Convenience of siting
EV charging stations can be sited at locations that are difficult for petrol pumps. These include sites inside malls, shopping centres, office complexes and residential communities.
- Lower carbon footprint
The charging stations can lower the carbon footprint of EVs if they are run exclusively on renewable energy. Solar-powered station hubs are not uncommon in the west, and India’s expansion plans for clean energy (500 GW by 2030) would be the perfect complement to its network of EV chargers.
Weaknesses of EV Charging Stations
- Competition from petrol stations
EVs still only make up around 7% of India’s auto sales and the country added 18,852 petrol pumps between 2011 and 2017 to account for the growing number of new ICE vehicles. This trend will likely continue as India’s vehicle ownership expands from the current figure of only about 1 in 12 individuals.New investments may therefore be channelled into the additional petrol pumps instead. Also, like the Tesla Supercharging station in Harris Ranch, California, the stations may themselves be powered by diesel to facilitate round-the-clock operations, which may lower the operational cost but eat into the facility’s carbon footprint.
Fig. 3: Tesla’s Supercharger station in Harris Ranch is powered by diesel fuel | Image: Cowboy State Daily
- Competition from other stations
As EVs become more popular, more charging stations will be set up and each will attract a certain number of EV users. The “footfall” to each station will thus drop and likely affect its overall returns.
- Government incentives
The Indian government has made it possible for any individual or private entity to set up EV charging stations. Also under FAME II, each public charging station is eligible for up to Rs. 6 lakh in subsidies, and the Gujarat state government covers up to 25% of the equipment costs for all public EV charging stations. These incentives are therefore designed to encourage public and private investments and can result in good financial returns if the siting and the density of the chargers are planned properly.
- Net metering and supplemental income
Ideally all EV charging stations should be powered by solar panels that are backed up by battery storage. This would open up the possibility of feeding the excess power generated by the panels back to the grid through the local net metering mechanism. Similar to the Centre’s KUSUM scheme for farmers, EV charging stations could supplement their revenues through this mechanism and also feed clean energy to the grid.
Fig. 4: Solar-powered EV charging stations are ideal for net-metering applications | Image: Electrek
With EVs as the future, the only real threat to the charging stations comes from the EVs themselves. At the moment there is a lot of progress on solid state batteries that could as much as double the vehicles’ driving range. As and when they become ubiquitous, it would translate to less frequent stops at the charging stations for each EV.
While this may be countered by an absolute growth in EV numbers, the charging technology may also move towards battery swapping. The technology makes sense for India’s E2Ws and E3Ws as they can be recharged with a swapped battery pack in less than 5 minutes, versus having to charge for upwards of 20-30 minutes. India’s first battery swapping station in Jaipur is already a step in this direction.
Overall, EV charging stations are set to expand majorly in the country. The Indian EV market is expected to reach 1.9 million units by 2030 – the actual numbers may be higher – and the charger operators may have to adapt their operations to changes in the vehicles’ technologies. However, with electric cars and heavy duty vehicles also starting to gain greater market shares, there is every room for charging and swapping stations to co-exist.