Year 2022 for the electric vehicle industry: challenges and expectations

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India’s electric mobility transition will be led by two- and three-wheeled vehicles, as these types of vehicles are the mainstay of last-mile connectivity and delivery across the country.

India is committed to reducing its carbon footprint, and the government plans to have 30% cars and the majority of two- and three-wheelers in the electric vehicle category by 2030. This shift towards a commuter-centric electric vehicles is going to experience greater momentum in 2022. One of the major considerations while predicting the future of the electric vehicle industry are the unique concerns, demographic needs, and economic scenario of the masses. Unlike the United States or European nations, India’s electric mobility transition will be led by two- and three-wheeled vehicles, as these types of vehicles are the mainstay of last-mile connectivity and delivery across the country.

One of the biggest challenges facing those looking to own these vehicles in the electric category is the high upfront cost and frequent expense of batteries. In August 2021, the Indian government allowed electric two- and three-wheelers to be sold even without a factory-fitted battery. Considering that batteries cost up to 50% of the cost of an electric vehicle, the option of not having to purchase vehicles pre-equipped with batteries brings the cost of electric vehicles to a competitive level compared to ICE two and three conventional gasoline. rollers.

Varun Goenka, CEO and Co-Founder, Chargeup

Permission to purchase batteryless vehicles is rooted in the concept of battery swapping which will be widely accepted in 2022 and beyond, separating vehicle ownership and the battery. However, the statement caused a lot of confusion among EV manufacturers and potential buyers. This is due to the lack of clarity as to whether a vehicle purchased without batteries would still be eligible for the same subsidies or not. Another concern is that the GST on batteries purchased as a standalone item is 18%, while that on electric vehicles as a unit is only 5%. In 2022, we hope that the Union budget will provide much-needed clarification on this aspect. It is expected that the GST on the purchase of batteries will be reduced or eliminated altogether.

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A major development that the Indian EV market will experience in 2022 is the entry of several new vehicle models and manufacturers in the two-wheel and three-wheel categories. These two account for the majority of current and future electric vehicle needs in India and come with removable batteries. Unlike four-wheeled passenger vehicles which are better suited to plug-in battery charging, these require a system that provides them with charging support at the same level as conventional fossil fuel vehicles. This is where battery swap services emerged as an ideal solution.

Recognizing this need, several state governments across India have announced measures to support the establishment of battery swapping stations and infrastructure. The Delhi government has gone ahead and announced measures such as the equal distribution of subsidies for electric vehicles between vehicle owners and energy operators. It also offers a subsidized rental lease and full rebate of the State Goods and Services Tax (SGST) on the purchase of advanced electric vehicle batteries.

Encouraged by these moving policies, various startups and even large companies such as Reliance, HONDA and BPCL are expected to enter the field of battery swapping in 2022. This will lead to a much wider network of battery swapping stations as well as progress towards battery standardization. technology and service levels across the country. Battery swapping will help EV users overcome range anxiety. Thus, we will see greater integration of eco-friendly connectivity and last-mile delivery solutions in 2022.

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Author: Mr. Varun Goenka, co-founder and CEO, Chargeup.

Warning: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of Indian Express Group or its employees.

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