Four crucial focus areas for Government to accelerate EV adoption in India | The Financial Express

Four crucial focus areas for Government to accelerate EV adoption in India

Faster EV adoption is a function of multiple factors and needs consistent and comprehensive effort. A detailed analysis of the key areas to focus on.

Four crucial focus areas for Government to accelerate EV adoption in India
Initiatives such as the one taken by Delhi government to create an EV charging infrastructure at residential societies must be appreciated a lot, and similar models can be adopted by other state governments too. (Stock Shots)

Maxson Lewis

The transportation sector is one the leading and fastest growing source of carbon emissions which is
affecting the health of millions in India on daily basis. A clear indicator of how big this problem is that
out of the 20 most polluted cities in the world, 14 are situated in India. Given the current situation, a
major shift to electric vehicles (EVs) is not just an option but a requirement in order for us to move to
a better world. However, for accelerated adoption of EVs, a lot needs to be done through
collaborative efforts from various stakeholders.

Following points are meant to specifically highlight the four key areas, which must be focussed upon to help accelerate EV adoption in India:

Also Read: Consistent EV adoption targets critical for faster transition in India


1) Accelerated deployment of the EV charging Infrastructure
Globally, majority of charging takes place at the residence level. Common shared charging points at
every residential society will help early adopters to invest in the electric vehicles. This will further
help in boosting confidence for the remaining people of the society to switch to electric vehicles.
Initiatives such as the one taken by Delhi government to create an EV charging infrastructure at
residential societies must be appreciated a lot, and similar models can be adopted by other state
governments too. The Delhi government has provided subsidies on LEV AC chargers, a charger that is
affordable with necessary safety features for home charging. Going forward a time-based charging
feature in such chargers will also help to manage the grid better, making it safer and increase EV
adoption.


Public charging infrastructure is still a big challenge and a critical factor for mass adoption for electric
vehicles especially in making them a primary choice of transportation for the people. To solve the
problem of public charging, government may want to consider providing subsidies on the backend
infrastructure from funds allocated for this sector (in addition to subsidies on the EV chargers). It
seems that investment required on backend infrastructure such as distribution transformers and
other associated electrical equipment is one of the major deterrents to create fast public EV charging
infrastructure in India at this stage. Parallel to this, more efforts from state governments to reduce
the efforts, cost, and time of getting EV connection will also help in faster deployments of the EV
charging infrastructure. This can be done by minimalizing the face-to-face interactions between
connection seekers and respective discoms through a better process.

2) Better Financing for EVs
Improved financing for EVs is a need of the hour and is required to achieve scale. This problem can
be solved by including EVs under the priority sector lending (PSL), which can help to improve the
credit line for this sector and in turn will help to reduce the cost of buying EVs for both personal and
commercial segments. 3Ws which has seen good growth because of favourable TCO, has financing
rate around 16% to 20% depending. This depends on factors such as the financial health of the
company buying the assets, brand of vehicles being bought etc.
A welcome move to improve financing is a plan to launch first loss risk-sharing instrument to partly

cover losses associated with two and three-wheelers loans by government along with World Bank
and SIDBI. In addition, buyback programmes, if launched by the OEMs can also help to bring more
clarity around the resale value and thus reducing the financing rate further.

Also Read: Bottom-up EV Adoption


3) Product Innovation
Beyond incentives under various state and central government schemes, which is required when the
industry is in the initial stages of growth, product innovation is must for the long-term growth of the
sector. This is also required to install a sense of confidence amongst people to buy EVs as their first
choice of vehicles over and above petrol and diesel vehicles. Product innovation may also contribute
to the reduction of the initial investment required to purchase an EV. Long term view is necessary
here amongst the companies looking to launch such innovative products. Start-ups are already
playing huge role in electric mobility sector growth and transition in India. They can attract significant
capital based on innovative products development and launch, which will also help them to create a
long-term competitive moat.

4) Reducing Vehicle Upfront Cost
Total cost of ownership (TCO) is an important parameter which is being used to compare the cost of
electric vehicle vs the cost of petrol and diesel vehicle over the lifetime of vehicle. Through TCO, it is
well understood that high initial investment is an important barrier in most of the cases, which if
solved can lead to the more adoption of the electric vehicles. This can be achieved by the localisation
of components and improving the existing supply chain along with large scale production set-ups to
take advantage of the economies of scale. We have already seen better TCO for few electric vehicle
segments and use cases but going forward a focus on sustaining lower TCO without including
subsidies is required for mass adoption of the electric vehicle.

The author is the Managing Director & Founder of Magenta Mobility.

Disclaimer: Views expressed are personal and do not reflect the official position of the author’s institution or policy of Financial Express Online. Reproducing this content without permission is prohibited.

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First published on: 10-12-2022 at 14:40 IST