Two and three-wheelers drive sale of EVs

The International Institute for Sustainable Development (IISD), an independent think tank, said in July 2021 that India lagged behind other key markets for Electric Vehicles such as China, Europe, and the United States.

The global EV stock reached 7.2 million units in 2019, of which 47% were in China, 25% in Europe and 21% in the United States. The rest of the world accounted for only 600,000 units, with just 170,000 sold in India, the IISD report stated.

Tom Moerenhout, an associate with the Geneva-based IISD says, “electrification of road transport serves multiple purposes. It is a green industrial policy that supports post-pandemic economic recovery. It is intended to reduce oil imports and strengthen energy security. And it is central to reducing air pollution and mitigating climate change.”

Almost 97.5% of all electric vehicles sold in India were two-wheelers. Through government-backed incentives, 87,659 electric vehicles have been procured and 6,265 electric buses have been allotted to various state and city transportation undertakings. Parliament was informed during the winter session that 8.70 lakh electric vehicles or EVs had been registered in India, most of them being two and three-wheelers, by 2020-21.

Arun Sreyas, CEO and co-founder of RACEnergy, a Hyderabad-based electric vehicle infrastructure company, believes that on the implementation front, the idea has still not trickled down from the bureaucratic level to the ground level, where you need to set up an EV meter for charging or swapping stations to exchange batteries.

“You’re not going to go to the energy minister to get the meter. You will reach out to the local authority. But the required information have not yet trickled down. Yes, the cabinet has approved the policy etc., the process has become easier, but it’s still a challenging thing to do, because we need to educate everybody all the way till the ground level to get the whole process done,” he explains.

Focused on battery swapping, RACEnergy has developed an integrated solution by taking the cost of the battery out of the vehicle and offering energy as a service through a network of swapping stations.

Drivers can swap their discharged batteries with charged ones within 2 minutes, enabling them to operate on the road for longer durations. To onboard vehicles to its platform, the company provides retrofit kits that convert existing internal combustion engines (ICE) auto-rickshaws into electric, making it economical and scalable. The company will shortly be launching in Hyderabad facilities to charge batteries under a temperature-controlled environment to arrest the challenge of quick battery degradation.

Pulkit Khurana is co-founder Battery Smart, India’s largest network of battery swapping stations for electric two and three wheelers. Instead of setting up charging points where one drives an EV and waits while the battery gets charged, Khurana and his colleagues have stations in 150 locations across Delhi NCR where they swap 5000 batteries each day.

“Think of us as petrol pumps for EVs. The idea is that EV users should come in, take two minutes to exchange their discharged battery for a charged one. And they’re ready to go for the rest of the day clocking 70 to 100 kilometres,” Khurana says.

Battery swapping addresses three problems. One is the time. As Khurana puts it, “You cannot expect users to stand at public charging stations for 3-4 hours, wait for the vehicles to get charged and then get back on the road, especially for a commercial user who is always on the road.”

The other hurdle this can potentially tackle is the high upfront cost and the recurring capex problem. Given that batteries are 40% of the cost, swapping ensues the battery comes as a service. “So, you save on the upfront capex and you also save on the recurring buying of new batteries after say two to three years,” he adds. Swapping also addresses the chronic anxiety of every EV user of where the battery can be charged next.

For swap stations to be a success, it will have to be available as part of a very dense network at short distances.

The high cost of batteries, which have to be imported, has put electric four wheelers beyond the reach of the middle class till now. But entrepreneurs seem upbeat about the two and three-wheeler segments.

“There are 2.5 million e-rickshaws on road in India. We don’t even think of them as an electric vehicle, although they are. They have penetrated tier-2, tier-3 cities across Rajasthan, West Bengal, Punjab etc. And that’s 90% of the EVs right now in India, but that is an India only phenomenon,” says Khurana. Most of these e-rickshaws are also not registered.

Khurana, an alumnus of IIT-Kanpur, concedes that for personal use, charging at home or the workplace might still be a better option. Overnight charging would give you sufficient range in personal use in case the vehicle is driven 30 kilometres a day, which will require charging once in three days.

As battery charging companies start directly engaging with housing societies, researchers say the government should come out with incentives for creating infrastructure and creating the right ecosystem that makes sure a battery is finally sent out for recycling.

This is as important, if not more, than rolling out vehicles and developing cell technology.

(This article was first published in National Herald on Sunday)