NEW DELHI -- Tata Power looks to establish a network of 1,000 electric-vehicle charging terminals here in the Indian capital in five years, responding to the national government's plans to ban sales of gasoline- and diesel-engine vehicles by 2030.
The subsidiary of the Tata Group, India's No. 1 conglomerate, will tackle the ambitious project through a joint venture with the national capital territory of Delhi. Tata Power Delhi Distribution, or Tata Power-DDL, now operates just five electric-vehicle charging stations. Even the nationwide tally of such facilities is said to be languishing at around 100 today.
First, New Delhi
All 1,000 charging terminals will be set up in northern New Delhi, Praveer Sinha, CEO and managing director of Tata Power-DDL, told the Nikkei Asian Review in an exclusive interview.
The project is expected to cost over 1 billion rupees ($15.2 million). The terminals will be located near shopping malls, train stations, hotels and markets. The number of charging stations will be fewer than 1,000, since some locations will be equipped with two or three charging terminals. Furthermore, each terminal can service five to 10 vehicles at once. Among the 1,000 terminals, 90% will charge lead-acid batteries while the other 10% will be compatible with lithium-ion batteries.
Tata Power-DDL started operating charging stations on a trial basis in 2015. However, the stations only service electric vehicles produced by domestic automaker Mahindra & Mahindra, along with electric scooters from Hero Motocorp, India's largest manufacturer of two-wheelers.
"I don't think the average size of revenues is even 5%" of the break-even point, said Sinha. But he added that the business will become profitable with more users. To attract customers, Tata Power-DDL lets drivers recharge their vehicles for free at a station located near Delhi University.
Making India greener
The growing number of electrified vehicles projected to hit the streets convinced Tata Power-DDL to add more charging centers. There are roughly 40,000 electric autos and two-wheelers in use currently, but that figure will jump to between 6 million and 7 million in five years, according to Sinha.
The government's anti-pollution initiative proved to be the turning point. Back in April, then-Power Minister Piyush Goyal told a business gathering that "not a single" gas or diesel-fueled car will be sold in India by 2030. Nitin Gadkari, Road Transport, Highways and Shipping Minister, also maintains that vision.
Sinha is betting that cost-conscious Indian consumers will flock to electric vehicles, as they are relatively cheaper to maintain. "The running cost for an electric vehicle per kilometer is 0.5 rupees, which is 10% of petrol cars," said the CEO.
Although electric autos are currently about twice as pricey as comparable gasoline vehicles, automakers and electronics companies are currently working to reduce battery costs, Sinha pointed out. He sees price tags for electronic vehicles coming down in the near future, leading to higher demand for charging stations.
India's electric vehicle industry is stuck in a Catch-22 situation right now, according to Sinha. Automakers maintain that a proper recharging infrastructure must be in place before electric autos are mandated. On the other hand, recharging station operators will not be profitable unless enough electric vehicles are on the road.
As for Tata Power-DDL, it is in the business of supplying electricity, said Sinha. "For selling more energy, it is important to have the charging stations."
The Indian government also announced plans to sharply boost renewable energy's share in the country's power supply by 2027. The comprehensive green policy could push more energy companies to invest in recharging facilities just like Tata Power-DDL. This August, parent Tata Power launched a station in the western commercial city of Mumbai. The company says it will decide whether to take the business to other regions based on the performance of Tata Power-DDL's charging station operations.
Some projections are not as optimistic as Sinha's expectation of between 6 million and 7 million electric cars in five years. The Tata Group's commitment to continued investment in charging facilities will go a long way toward helping the growth of the Indian electric vehicle market.