Keeping India at the Forefront of the Global Energy Transition

Driven by climate change and the poor air quality plaguing cities around the globe, nations are coming together to implement policies that advance the adoption of clean energy technologies while pivoting away from dirty, fossil fuels that have powered our everyday lives. We are now seeing an exciting shift in the world as electrification has become scalable, affordable and socially responsible. Of the emerging technologies, solutions that electrify transport hold the key to meeting decarbonization and emissions goals as 29% of the world’s global greenhouse gas emissions are generated by this sector alone. Critically, the transition to electrified solutions will most directly impact the people living in regions disproportionately affected by climate change and air pollution, including India, home to 14 out of the 15 most polluted cities in the world.

The EV landscape as it stands
Since 2019, India has enacted a national policy to support the electric vehicle market, the Faster Adoption and Manufacturing of Electric Vehicles (FAMEII) scheme, which holds the greatest potential to catalyze the electrification movement in-country and enable India to become a world leader in electric mobility. Notably, FAME-II provides three key frameworks to promote: local manufacturing of electric vehicles and components, the development of EV charging infrastructure, and above all, incentives to encourage consumer adoption of new electric vehicles.

As consumers (and the companies looking to offer electric vehicles in India) can attest to, the biggest barrier to entry is cost. Although electric vehicles have the overall lowest long-term cost of ownership, new EVs can have an upfront cost of 20-30% more than a new internal combustion engine vehicle, and faced with that decision, the country has not fully made the transition.

Leveling the upfront cost between traditional combustion vehicles and modern electric vehicles is one of the most important challenges facing electrification adoption not only in cost-sensitive emerging markets like India but worldwide. However, even with the national incentives provided by the government, many consumers still may not be able to afford the cost of a new vehicle, let alone an electric one.

An affordable solution for all: EV retrofitting
There are nearly 230 million two-wheelers and 5.4 million three-wheelers on India’s roads. Over 60% of these vehicles are fueled by diesel or petrol, while the remaining 2.3 million electric two- and three-wheelers already on the roads are for the majority, powered by lead-acid batteries. Sheer carbon emissions aside, each of these three existing power sources for twoand three-wheelers carry their own environmental footprint and long-term costs, such as maintenance. For India to truly advance electrification in-country, converting all 233 million existing fossil fuel-powered light mobility vehicles is a critical initiative.

For a country that is already heavily reliant on two- and three-wheelers to move around daily, obsoleting all fossil fuel- or lead-acid-powered vehicles is impractical. Many drivers rely on twoand three-wheelers for income and have already invested heavily in the purchase of their vehicles. For these drivers who are cost-sensitive, retrofitting is the best solution to replace the combustion engine with an electric powertrain. With the right expertise, the innovative solution can be implemented at a fraction of the cost of a new electric vehicle, and even within the same day, ensuring quick turnaround. For a driver, retrofitting immediately reduces the running cost of a vehicle in a multitude of ways; drivers are no longer dependent on fuel and oil -- allowing them to avoid long lines at the petrol stations -- while saving on direct fuel costs daily. Electrifying a vehicle also prolongs the lifetime of a vehicle, requiring less maintenance over the span of ownership and saving costs associated with tune-ups, oil changes and more.
 

Beyond direct-to-consumer savings, retrofitting is an important step in reducing crude oil consumption, vehicular pollution, and expenditure on oil imports -- all areas of interest to the Indian government. Retrofitted vehicles could act as an early catalyst in a market like India by encouraging the development of EV supply chain components, including batteries, and leading to the build out of EV infrastructure, which in turn would accelerate widespread adoption.

A convenient answer to infrastructure: battery swapping
With more EVs on the road, countries simultaneously need to build infrastructure to support charging, such as stations or kiosks. However, the buildouts tend to be costly and more importantly, require time to plan and implement. As the government works toward investing more heavily in EV infrastructure, energy-as-a-service battery swapping can offer an attractive alternative by reducing the upfront cost of vehicle ownership while addressing consumer range anxiety.

Rather than wait for EV batteries to charge up, swapping the EV battery once it has been depleted allows drivers access to fast on-demand power without any of the maintenance requirements. Battery swapping stations have a small footprint, and can be distributed throughout urban areas and along well-used roads, giving drivers flexibility to decide where and when they swap -- and taking seconds to do so. Best of all, battery swapping saves drivers up to 35% in daily operating costs by eliminating fuel and operating associated with internal combustion engine vehicles. Combined with the cost of the retrofit EV kit, which is around a third of the cost of a new EV, the savings are an attractive value proposition for drivers to electrify their vehicles.

While infrastructure deployment for electric vehicles has been a chicken-and-egg issue across the world, with providers reluctant to implement charging services without established consumer demand, battery swapping is an infrastructure-light solution that can be rolled out in tandem with a growing customer base. More importantly for energy-insecure regions such as India, battery swapping infrastructure is light on the electrical grid, often capable of being paired with solar panels or passively-recharging during off-peak electrical hours.

Building a greener future for India
Ultimately, for vehicle electrification to successfully evolve and expand, lawmakers need to provide greater emphasis on innovative approaches to the energy transition from a policy-level, and provide regulatory support to encourage organized retrofitting of existing vehicles. As the largest market globally for two- and three-wheelers, India and its national FAME-II scheme does not currently include subsidies or provisions for EV retrofitting, even though the country’s goals are based on the successful transition of its fossil-fueled vehicles into EVs. For a country deeply affected by air quality concerns, an open discourse must be made on the viability of EV retrofitting and battery swapping to support the country’s energy transition.

- Pankaj Dubey, Co-founder and CEO, Power Global India