India's Ministry of Road Transport and Highways is to allow the sale and registration of electric two and three-wheelers without batteries, a move that will boost sales of the vehicles.
Bakar Sadik Agwan, Senior Automotive Consultant at GlobalData, notes that the cost of ownership, along with the availability of adequate charging infrastructure, is a key factor for large-scale uptake of electric vehicles (EVs). "While a customer indeed saves on fuel cost, the initial cost of acquisition is high because electric vehicles are costlier," he points out. "Hence, India's plan to allow selling and registering electric vehicles without batteries is a welcome move as it will result in significant upfront savings for customers."
Under the plan, customers will no longer have to pay for the battery, which amounts to 30-40% of the overall cost at the time of purchase.
"Customers will now have the flexibility regarding how to procure batteries, which presents new business opportunities to OEMs, energy companies as well as other stakeholders in the battery charging and swapping infrastructure," Agwan says. "The absence of factory-fitted batteries in EVs will proliferate new business models such as battery leasing and renting, and help in creating a dedicated ecosystem for battery supply, charging/swapping and servicing. Furthermore, shared mobility, logistics and delivery companies, which are leading the transition to EVs in India will gain significant cost-benefits if the new business models for batteries kicks-in."
The latest move is over and above the existing demand incentives offered by the government.
Two and three wheelers command significant market volumes in India. "Increase in the uptake of electric vehicles will help the government achieve its ambitious targets regarding electrification," adds Agwan.