The tariff factor

As a result, public charging points will always outnumber charging stations. And it doesn’t make sense to establish charging points in existing bunks either, says Lewis. However, they will mostly be automated, which will help with expenses.

Most charging operators The Ken spoke with said the primary users of the charging points or stations, for the foreseeable future, will be fleet owners rather than personal vehicle users. Besides standalone stations, the best bet for charging points will be in places where an EV will be parked for some length of time, like shopping malls, cafés, metro parking spaces, and public parking spaces. But given high real estate costs, companies are finding different models to make money from the business, depending on the location of the charger.

“India is not Europe or the US,” says Fortum’s Jha. “We have less space per person. Rather than creating space, India will benefit by making better use of existing space.”

Since charging stations have the potential to attract footfalls, operators are looking to partner with office spaces, malls, and cafés to lower its initial investment. How long a car will be parked at a location plays a crucial role in companies’ decision to invest in said location. The longer a car stays in a particular place—such as a mall, as compared to a café—the more beneficial it is to the operator, given it can install slow chargers.

These charges cost between Rs 2 lakh-Rs 3 lakh ($2,800-$4200), while a fast charger can cost between Rs 10 lakh-Rs 18 lakh ($13,900-$25,100). Which is why setting up charging stations along a highway, which require fast chargers, is not a feasible option.

While each company is figuring out a business model, Lewis believes that even a 50% utilisation of one charging point will help Magenta break even in three years. He thinks it is just a matter of time before that happens. Already, public charging spaces in India have a utilisation rate of 25%, he says.

Tariff talk

The road to setting up public charging spaces in India has another complication—three different charging standards.

The European standard, Combined Charging System (CCS), adopted by Hyundai and MG Motors; the Japanese standard CHAdeMO used by Nissan; and the Indian standard Bharat used by the likes of Tata Motors and Mahindra. This means that charging stations need to be able to cater to all three standards.

Fortum’s Jha does not see this as too much of an issue. He believes the market will decide what standard should be adopted going forward. And he is right. Increasingly, automakers are adopting the CCS standard. “Going forward, there seems to be a consensus that CCS will be used more, especially because it is more suitable for fast charging,” says Uday Kumar, co-founder of Charjet. Charjet plans to set-up more than 2,000 chargers across the country.

While the issue of standards settles, tariffs will pop up as another bone of contention.

The Indian government delicensed setting up charging stations for private players in December 2018. But it stayed mum on tariffs. That same month, the Ministry of Power said EV charging is a service, not a sale, arguing that a power distributor’s role ends at a charging point. And given that the government has regulated only the sale and distribution of power, charging station operators can set their own rates.

Lewis of Magenta Power estimates prices could vary anywhere between Rs 18 ($0.25) per unit of power and Rs 28 ($0.39) per unit, depending on the value of real estate, peak load hours, and the availability of chargers. In contrast, it would cost about Rs 5 ($0.07) per unit to charge a car at home.

Lewis doesn’t expect pricing regulations for at least for two years. He instead believes that market dynamics will help standardise prices as public charging becomes more prevalent. In China, the government had put caps on prices, lifting them after charging station operators bemoaned that low tariffs were making their business untenable. But as prices went up, people switched to charging at home.

The bigger worry for operators, as far as tariffs are concerned, however, is that power prices vary depending on the time of day. Rates are highest during peak demand hours, usually between 7 a.m. and 11 p.m. But since EVs draw a lot of power, one would ideally want to charge it overnight.