It was 2018. The world was still far from being in a grip of any pandemic. The roads of Delhi were jammed with usual traffic and the skies were covered with dull grey shade formed by a mix of smoke from millions of tailpipes and Punjab rice fields burning. On one such hazy winter evenings in Delhi, I was coming back to my hotel in Greater Kailash from attending an event on electric vehicles. The distance was short and I took an electric rickshaw. On the way, I talked to the driver about the rikshaw, about his driving experience, and more specifically, about charging. Within that 15 minute ride, it dawned on me that a big chunk of the panel discussion I had just attended in a posh hotel was, well, wrong. One point that was repeatedly harped again and again in that and pretty much every panel discussion before, was how the lack of charging infrastructure was the main impediment for electric vehicle adoption.
The rickshaw I sat in is nothing new in North India. These are ubiquitous, found in most tier 1 and tier 2 cities with plain terrain, operating as a great last-mile connectivity option from railway stations, bus depots, or bazaars. These are cheap Chinese imports with lead-acid batteries.
The regulations about these rickshaws are haphazard. At different times and different places, these were banned, then permitted, then banned, or permitted with time or geography restrictions. Mainstream banks rarely gave loans for buying these rickshaws. The owners of these rickshaws borrow money from private loan sharks at the rate of 22 to 28%. The charging infrastructure is non-existent. Most of these drivers used to charge these e-rickshaws illegally, by throwing a hook over the overhead wire. This method was highly accident-prone and unreliable.
Yet, despite complete lack of charging infrastructure, despite intervention from the police due to unclear regulations, despite crazy high-interest rates on loans, the number of these rickshaws in India in 2018 was over a million. Yes, million!
The reason is that on a unit economics level, per km of the ride, these rickshaws are profitable business despite all the problems. Since then every time I hear the “chicken and egg, which comes first” a reference to the electric vehicle and charging infrastructure problem, I think of that rickshaw ride.
Don’t get me wrong. It’s not that lack of charging infrastructure isn’t a problem. It is. But it is only for a very small segment – personally owned four-wheelers. Which comprise of about only 2 to 4 % of the total vehicles in India by numbers. And these vehicles do not run a lot of km. A typical Ola or Uber four-wheeler runs anywhere from 150 to 250 km a day, about 25 days a month. A typical private car runs about 20 km per day if used for commute. Many not even that much. These cars sit as ornaments decorating parking spaces for most of their life.
Apart from privately owned four-wheelers, there are buses, rickshaws, two-wheelers, ride-sharing cars, trucks, tankers, bicycles. Out of these, the trucks are not going to switch to electric anytime soon even if charging infrastructure is there. Two-wheelers are not really constrained by a lack of charging infrastructure as most of them have a single charge range far more than the typical daily need. I personally own an electric two-wheeler with a single charge range of 60 km and in the last two and a half years, I never had to look for charging outside my home. And even then, many two-wheelers come today with removable batteries, which will allow you to charge anywhere where you can find a 5 amp socket. That means anywhere you can charge your mobile phone.
Electric vehicles are not the first time we have faced this “chicken and egg” problem. Before this similar problem was faced on cell phones and cell phone towers. Before that, it was TV sets or TV content creation infrastructure. Before that something else.
Every time there was an area, a small segment of the population was willing/able/needed to change to a new world. In the case of cell phones, the first two professions that adopted cell phones were stockbrokers and doctors. These two had value for real-time information and had money to pay for it. They financed the first cell phone towers. Then it began to spread and eventually caught like wildfire.
For electric vehicles, we need to identify these easy absorption areas, like e-rickshaws, and make it as easy to spread in that area. A targeted penetration, and subsequently targeted charging infrastructure building is much more feasible than carpet bombing the nation with charging stations and waiting for people to buy electric vehicles.
On another note, while we discuss the subsidies, i.e. the demand side incentives at length, we rarely discuss the supply-side incentives. An ideal example of how an entire nation and indirectly the whole world is nudged towards greener transport is fuel efficiency standards adopted in the USA in the 1980s. It was the joint work of several NGOs like Sierra Club. These standards were set so that auto manufacturers had to make more and more fuel-efficient cars, setting the bar higher every year. The automakers could tell in 1990 how much fuel efficiency their cars need to have in 2010. That level of long-term clarity was needed for research and subsequent incorporation of that research in, product development.
Successive US governments did not touch these standards. These standards not only set the targets but also set the penalties for not meeting them. These resulted in carbon credits that handsomely benefitted Tesla and as they say, the rest is history.
A comprehensive vision to switch will have the following components.
It will have a public education component. Citing another example from the USA, when the government made it necessary for restaurants to put calorie information on the menu, people automatically started making healthy choices. Why can’t we do this for vehicles? Why can’t we give energy star-like ratings that appliances have? It will also have stricter enforcement of PUC. Currently, PUC is done by people sitting in a parked vehicle along the highway. So easy to bribe them and get the vehicle passed. Why can’t we enforce the PUC checks at the dealer? The dealer has an incentive to find the problem so they can fix and make money. They will be hard to bribe.
Last but not the least, carbon tax. Supply-side incentives. Unless the big companies are forced to create more electric vehicles, they will not do it. And unless there are good electric vehicle models out there, demand-side incentives will not work.
Lack of charging infrastructure is not the main problem. It’s the lack of charging infrastructure and lack of electric vehicle penetration both are symptoms of the same problem. Lack of clear long term vision to switch. It does need to have clarity in terms of the watercourse way, the least resistance way of making the change happen.
Author: Kedar Soman, Co-Founder & CTO, eBikeGo
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