One major obstacle in the growth of the EV market in India has been the lack of charging stations. Bhavya Bagga of CXO News & APAC News Network analyses the dynamics of the EV charging market and how the things are improving fast.
The electric vehicle (EV) market in India is on the brink of substantial growth, driven by a combination of government policies, increasing consumer awareness, and technological advancements. NITI Aayog, in alignment with the government’s vision, has outlined a roadmap for electric mobility in India, setting specific targets for different types of vehicles.
The objective is to achieve a 30% EV sales by 2030, indicating a strong commitment to transitioning towards a more sustainable and eco-friendly transportation system. These concerted efforts underscore India’s determination to embrace EVs as a key component of its future mobility landscape.
However the EV industry in India still faces significant challenges in infrastructure and adoption despite ambitious targets set for 2030. A crucial factor in meeting these targets is the development of a strong EV charging infrastructure to support the increasing number of EVs on the roads.
The growth of the EV market in India, according to many, is hindered by the need for substantial investments in charging infrastructure to alleviate range stress and promote further adoption. Aditya Singh Ratnu of Zevo believes, “The widespread adoption of EVs hinges on robust charging infrastructure, advancements in battery technology, and supportive policies.”
Ratnu further asserts that EVs outperform internal combustion engine (ICE) vehicles in terms of environmental sustainability, energy efficiency, and long-term cost savings. A major challenge for EV adoption in India is this lack of consumer awareness about their benefits, charging needs, and functionality.
The Changing Perspective
Recent developments, nevertheless, indicate that things are moving northwards as far as charging infrastructure is concerned. EV) charging stations across India saw a major spike in power consumption in the first quarter of FY25, more than doubling compared to last year. According to the Central Electricity Authority (CEA), public charging stations consumed 176.87 million units (MU) of electricity between April and June 2024, up from 84.95 MU in the same period in FY24 – a 108% increase.
This surge comes as the number of EVs on Indian roads continues to climb. In FY24, EV registrations grew by over 42%, with 16.81 lakh vehicles registered compared to 11.83 lakh the previous year. By July 2024, the total number of EVs registered in India stood at 45.75 lakh.
Delhi topped the list for electricity consumption at charging stations, using 83.86 MU, which made up 47% of the total. Maharashtra followed with 44.48 MU, while Gujarat came in third at 14.38 MU.
The increase in charging infrastructure has also been significant. The number of public charging stations jumped from 1,800 in early 2022 to 16,347 by March 2024, reflecting the growing need for EV infrastructure as the country moves towards its 2030 target of 50 million EVs.
The EV charger demand in India witnessed this increase since 2022 onwards owing to tenders announced by PSUs like Convergence Energy Services (CESL), NTPC Vidyut Vyapar Nigam, Indian Oil Corporation (IOCL), and Kerala State Electricity Board (KSEB). These are expected to add around 6,000 charging stations by the end of 2024.
The current market represents public, captive, and private (e-4W) charge points deployed across the country. The EV charger ecosystem is dominated by type-2 AC charger, which accounted for 82% of the market in 2021-22, followed by AC001 type chargers with 12.5% of the market.
Who are the players in EV charging?
Broadly, three types of players are present in the Indian charging ecosystem. The winning strategy for each player would differ, depending on the ‘field of play’ which is governed by the choice of charging technology (AC/DC), customer segment (Residential/Fleet), vehicle segment (2W/3W/4W), location (public/private) or service proposition.
Charger OEMs provide the charging equipment and associated charger management system, both global and home-grown players are present in Indian market. Product customisation, design innovation and software integration would serve as key differentiating factors for charger manufacturers. Charger manufacturing currently captures the largest pie of charging opportunity. The market is poised for strong growth on the back of increased demand from CPOs and residential/commercial customers alike.
Ensuring product and service quality at a competitive cost is very critical in the value-conscious Indian market. To differentiate themselves in an otherwise commoditized business, players would require to specialise in customised products, designs or broadening their scope to provide value-added services like software for predictive maintenance.
Charging point operators (CPOs) are responsible for installation and maintenance of charging stations, can either own and operate a set of charge stations, or simply operate them for third parties. Right selection of location, technology, power infra, value-added services and ensuring network reliability are crucial for CPO’s successful operations.
The CPO segment in India is still in its infancy, and companies are experimenting with various approaches and models, in order to address the diverse demands of various vehicle and consumer segments. While specifics vary, right selection of the following operating model elements is essential for success in this space.
At current utilisation levels, CPOs are unable to recover their costs and generate meaningful returns. The issue is more pronounced in case of DC chargers due to significantly higher costs associated wit charging equipment and power infrastructure. To illustrate, a single DC 60 kW charger takes a minimum of eight years to achieve breakeven at current utilisation levels of three to four cars per day, if we assume nil land rent. However, as utilization improves, the initial investment can be recovered at a much quicker pace.
Strategic partnerships and alliances would be crucial for players to develop and sustain their competitive advantage in the CPO market. CPOs across the globe have used this strategy to fulfil one or more of their business objectives, including driving utilisation, ensuring customer stickiness, enhancing customer experience, and achieving scale. Ancillary service providers offer payment solutions, navigation and booking, turnkey services, remote maintenance etc. This is currently a very small share of the market.
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