6 Apr 2022 , 02:19 PM
Giving more insights, Mr. Shamsher Dewan, Vice President and Group Head, ICRA says, “India remains a laggard in EV charging infrastructure penetration. However, like most global counterparts, the policy push has been strong in India as well, to increase the number of EV charging stations. To capitalize on the potential opportunity in the space, several PSUs and private players have also announced plans to foray into charging infrastructure.”
In order to increase the EV charging network, the Government of India (GoI) has allocated a total outlay of Rs1,300 crore for the same in the FAME scheme. Further, the GoI has proactively amended guidelines for charging infrastructure development in the country. The revised policy has simplified land and electricity procurement and issued guidance on locations of priority for EV charging infra installation. This apart, several states have also subsidized electricity procurement tariffs for EV charging stations. Overall, the policies aim to proactively promote more EV charging stations, with a sizeable part of the population expected to have charging infra access in the next 3-5 years.
However, the EV charging infrastructure business is capital intensive. Even excluding land, the initial upfront cost is approximately Rs29 lakhs, without subsidy. This apart, the operating costs are over Rs10 lakh/year, thus making asset utilization critical. ICRA estimates that it would take about 4 years for an EV charging station to breakeven based on current expectations of EV penetration and commensurate asset utilization (30% in 4 years), without accounting for any subsidy. The localization is only 10-15% currently, with the hardware components largely imported from China and Taiwan. Increase in localization can have cost savings.
Adds Mr. Dewan, “Battery-swapping is an alternative solution instead of developing EV charging infrastructure, especially for commercial applications. This is also currently in nascent stages in India. Battery swapping is advantageous — it is a quick way of recharging a vehicle and is cost and time efficient. It reduces the upfront cost of EV, as battery ownership is replaced by battery leasing. There is increased predictability of battery life due to controlled charging conditions. However, ensuring interoperability, adequate financing availability and maintaining sufficient battery inventory can prove to be challenging.”
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