Innovations in battery storage to further EV transition in India

Electric Vehicle (EV) sales in India have increased manifolds, in large part due to the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME) due to incentives and rising fuel prices. While estimating the demand for EV charging and readiness, EV stock, i.e., the total number of EVs currently on the road, becomes the key metric to track. According to the Vahan dashboard, there are 12.9 lakh EVs registered in India, of which more than 56 thousand are E4Ws.

India, the world’s sixth largest economy by nominal GDP and third largest by purchasing power parity, is classified as a middle-income developing market economy. 2- and 3-wheelers account for nearly half of the Indian urban mobility modal share. EVs are slowly gaining traction, with less than 2 per cent of vehicles in India being EVs.

The influence of Fame-II and EV batteries on the EV infrastructure
The announcements of these schemes demonstrate the government’s and participating agencies’ positive intent to support clean mobility. It is commendable that India is driving these schemes and discussions far ahead of many other countries still thinking. It takes a lot of guts for the government to support a technology still in its early stages.

According to Maxson Lewis, Managing Director, Magenta, “Government property is now available for the construction of EV infrastructure. Any government land-owning agency can offer land for PCS to the government or public entities on a revenue-sharing basis for 1 Rs/kWh. Furthermore, the agency may solicit bids from private entities with a floor price of Rs 1/kWh.”

Moreover, significant capital subsidies for procurement of EV chargers are available for installing PCS for chargers installed under the FAME-II scheme and other PCS to stimulate investments in capital-intensive EV infrastructure development. While praising the government schemes, Samrath Kochar, Founder & Chief Executive Officer, Trontek, commented, “Now 100 per cent foreign direct investment is allowed in this sector under the automatic route. The federal government is prioritising a shift towards clean mobility. Recent moves to amend the FAME-II scheme to make electric two-wheelers more affordable are a case in point. In addition, multiple production-linked incentives are pushing for local manufacturing, newer technologies, and products, all intended for greater adoption of electric mobility.”

The government approved The National Programme on Advanced Chemistry Cell (ACC) Battery Storage, with a financial outlay of Rs 18,100 crores, to promote domestic cell production and reduce reliance on imports. Policy measures like FAME and the more recent PLI scheme will encourage new players to enter this sector and look at starting manufacturing facilities in India.

Infrastructure for charging stations
Currently, the infrastructure is almost negligible considering the growth of EVs in the country, especially two and three-wheelers. As four-wheelers join the bandwagon, this demand and the scarcity will intensify, making the coming few years crucial for the sector.

Venkat Rajaraman, Founder & Chief Executive Officer, Cygni Energy, says, “I think, especially for EV 2 and 3 wheelers, charging infrastructure, as well as the swapping infrastructure, will co-exist. The NITI-Aayog, Department of Heavy Industries, and BIS are formulating the swapping policy. In her budget speech, the finance minister also said that the swapping policy would be rolled out in the next couple of months.

“The infrastructure required for swapping is much less than that of the charging infrastructure. Some segments will be more amenable to that swapping (especially for the last mile delivery and so on), and some other sections will be more amenable to charging (home charging for those who use EVs for their daily commute), “he added.

Challenges for the Indian EV Market
Recalling the challenges in the EV market, Rajaraman shares, “We are very import dependent at this point of time for Li-Ion cells. China controls more than 70 per cent of the lithium-ion cell manufacturing capacity, and cell manufacturing is now limited to a few countries. China is very dominant. For India, all the cells today are 100 per cent imported. “In the short term, we see a lot of volatility in lithium and other metal prices (like nickel, copper, etc.). With the Ukraine crisis underway in the London Metal Exchange, the cost of metal, especially nickel, has risen relatively high. So clearly, these are the hurdles we must overcome in the short term and also need to work to remove the imported dependency for a long time. “With regards to the immediate hurdles, the biggest challenge is related to supply-chain led price volatility owing to various factors, including the Russia Ukraine conflict and market shutdowns in China,” added Kochar.

Consumer Awareness and Demand
EVs in India has been a rural phenomenon, with 3Ws leading the race, followed by 2Ws and a further 4Ws. Currently, the greater focus is on metros where the consumer has range anxiety because of a daily travel distance of 100 km. Unlike in tier-II and tier-III areas, where the travel radius is 15-20 km, a consumer can ride 150–180 km after electrification without worrying about recharging or finding a swapping station.

Kochar said, “There is a little challenge regarding consumer awareness and demand. The market barriers, like charging facilities, high upfront costs, lack of constant power supply, and concentrated EV hubs, pose a challenge. Once a formal infrastructure is created, technology is evolved, and affordable options are put in place, the EV market will see growth in the coming years.

Localisation and Trends Today, India is dependent on cells. With the ACC PLI scheme, the cells will be localised. The start of localisation will begin in the next 2 to 3 years, and we can expect some demonstrable output from that. Other than cells, there are large aspects of battery packs that can be localised, whether it is the Battery Management System or the enclosures (metal, aluminium, plastic, etc.), or all the other components which are required, like nickel, thermal pads, breather valves, etc. In expressing his views, Rajaraman said, “Most importantly, the EV industry in India will be an extended software play. The software will play a key role because of intelligent battery packs and connected vehicles. That is one area where India can outpace China. Considering the software requirements for a swappable battery pack, software requirements for fast charging, etc., we will be able to beat China because of our inherent strength in software. These are all the areas where there could be an increase in localisation, and we could build our battery packs.”

People are hesitant to buy EVs due to range anxiety and a lack of on-route charging infrastructure. Furthermore, policies have not emphasised encouraging the development of home charging/workplace charging infrastructure, which could provide a more convenient alternative to on-route charging infrastructure for vehicle owners. Furthermore, concepts such as e-roaming have yet to emerge in India, which could provide flexibility and interoperability in charging across multiple locations.