Introduction

The EV charging landscape is currently undergoing a massive transformation. While it is still in its nascent state, there is growing interest and awareness about sustainability and environmental concerns.

The EV-Ready India dashboard projects EV sales to grow at a CAGR of 45%, equating to around 1.5 crore electric vehicles expected to ply on the Indian roads by 2030. (Source)

Developing the EV charging infrastructure will serve as a catalyst in India’s transition to electric mobility. If you want to chip in by starting an EV charging business, there are different ways to get started.

Here, we look at EV charging business models and how to decide which one fits your specific requirements.

EV charging landscape in India

Commercial property owners are looking to develop EV charging stations, either as their primary offering or as a supplement to their current business, to attract new customers and offer better convenience.

The Indian government has also proactively supported businesses, helping them adopt new EV business models. Initiatives like FAME II have been introduced that offer subsidies and incentives to EV manufacturers and businesses developing EV charging infrastructure.

In addition to government initiatives, several private businesses are also showing interest in EV charging business models. Retailers like Indian Oil, HPCL, and BPCL are promoting e-mobility by installing EV charging points at petrol bunks. (Source)

Understanding business models in the EV charging sector

EV charging infrastructure forms the backbone of the EV industry. In India, the EV charging infrastructure segment comprises of charging infrastructure manufacturers, charging point operators, battery recycling players, and battery subscription providers.

EV charging stations manufacturers

EV charging stations manufacturers provide complete charging point solutions for public and private charging that includes the hardware and software installation. It also includes allied services like hardware maintenance and support services.

As a charging equipment manufacturer, you can generate revenue by manufacturing and selling charging equipment in two ways. The first is to directly install charging hardware in homes, offices or at public charging locations. The second way is to partner with vehicle manufacturers and offer the hardware along with the vehicle.

Charge point owners

As the name suggests, a charge point owner owns the EV charging infrastructure. The owner finances and oversees the project and controls the charge point operators and other service providers in a way that would enable a profitable return on investment.

Charging Point Operators (CPOs)

Charging Point Operators or CPOs are players that operate a network of charging points or stations. The key services that CPOs provide include electric vehicle charging, customer support, and network solutions.

CPOs can choose from different pricing mechanisms such as time-based fees, energy-based fees, membership fees, and fixed fees to charge their customers. The Ministry of Power has classified EV charging as a 'service,' eliminating the requirement for CPOs to obtain a license to operate under the Electricity Act 2003.

Battery recycling

The heart of electric vehicles are the batteries that are made of lithium-ion and consist of rare elements like lithium, nickel, and cobalt. As the demand for EVs continues to increase, the use of these elements too will increase. Since these are rare natural elements with a limited availability, supply chain disruptions can pose a serious challenge to the EV industry.

Battery recycling is a viable solution that helps to make the EV industry more sustainable and cost-effective. Recycling companies can generate revenue through the sales of the recovered raw materials.

Battery-as-a-Service (BaaS)

Since the cost of a battery makes up for a major portion of the cost of an electric vehicle, the BaaS model can help to reduce the upfront cost of EVs. Battery as a Service (BaaS) adopts a circular economy approach, optimizing battery utilization while integrating transport and energy sectors.

Vehicle owners can lease new batteries and once they run out of power, they can swap them with fully charged batteries at battery swapping stations.

As a battery service provider, you can provide batteries to EV owners on a subscription basis or on a pay-as-you-go model. In the subscription model, you can charge the vehicle owners on a “per day” or “per km” basis. With the pay-as-you-go model, vehicle owners essentially pay for the electricity consumed (like refuelling). The user is charged on a pro-rata basis, determined by the difference in charge between their current discharged battery and a fully charged battery that is to be exchanged at the swap station.

Conclusion

The EV charging industry plays a crucial role in supporting sustainable electric mobility. When exploring different EV business models, it is important to consider elements like your customer base, available resources, and revenue objectives to maximise benefits.