Retrofitting Of CVs: The Need To Revisit Government Policies To Realize India’s EV Dream

In 1993, India’s first three CNG stations were opened in Delhi for private and commercial vehicles. This policy decision enabled the successful conversion of more than 30 lakh vehicles to CNG. A similar wave is fast reaching the shores of our nation again and this time it is retrofitting commercial vehicles into 100% electric.

Simply put, retrofitting is the replacement of the combustion powertrain in a vehicle with an electric driveline. This method is being extensively in Europe to convert diesel trucks and buses into zero-emission CVs as has helped reduce carbon emissions within big cities while also reducing congestion. Several states and cities have made these policy decisions to convert entire fleets of commercial vehicles plying within the cities to full electric.

Significance of retrofitting

The Government of India has set an ambitious target for electric vehicles (EV), alongside plans to reduce carbon emissions via diesel and petrol engines significantly by 2030. In view of this, the country is taking steps towards switching to electric vehicles. However, the pace of this transition can’t be dramatic and thus, to realize its dream of reducing carbon footprint, the country must focus on converting the existing ICE vehicles into 100% electric ones. Retrofitting increases the useful life span of existing vehicles by 5-7 years and would also not fall into the new scrappage policy.

The significance of retrofitting commercial vehicles over passenger cars is more pronounced as there is a much greater reduction in carbon emissions and the end customer has significant operating cost benefits. In our experience, CV conversions in the range of 15-50 GVW can provide 60%+ operating cost savings per km with significant maintenance cost savings too as the number of moving parts are about 1/10th.  

Why the urgency

The number of buses on Indian roads is expected to reach 3 million by 2030. Similarly, the volume of other public transports will also increase in the same pace. If we just keep on adding more electric public vehicles to the existing fleet in the name of reducing carbon footprint, our city roads will get congested. Thus, the viable solution is to add a limited number of electric vehicles while upgrading the existing ones to electric variants through retrofitting. This will not only keep the count of vehicles in check but also reduce our vehicular emissions. 

Retrofitting is especially crucial in India as there is a lack of indigenous technology for developing EV components adapted for the tropical climatic conditions of the country. Besides, EVs are still not priced competitive in India and there is a lack of commitment among customers to transition to fully electric fleets.

Benefits of retrofitting

The benefits of retrofitting are multi-faceted. 

From the customer’s point of view, retrofitting reduces the running cost of the vehicle, prolongs the life of the vehicle, and gives the pride of taking a step towards sustainability. 

From society’s point of view, electric/hybrid vehicles are good for public health and cause less harm to the global climate.

From the government’s point of view, retrofitting reduce crude oil consumption, vehicular emissions, and expenditure on oil imports.

Electrification is a nascent market in India where charging infrastructure (or lack of it) is a massive hurdle in EV adoption. Therefore, retrofitted EVs can be the first entrants to the market by building demand for charging, localized components and batteries, service infrastructure, and usage pattern understanding, among others. 

Need to overhaul laws relating to retrofitting

The law in India relating to retrofitting states that the installation of type-approved hybrid electric system kit shall be done only by an installer who is authorized by the manufacturer or supplier of such kits. The law adds that the kit manufacturer or supplier must obtain the type approval certificate from a specified test agency. Also, the certification will remain valid for three years from the date of issue. 

However, there is a need to make these laws more flexible as: 

• To encourage faster adoption of electric and hybrid vehicles, the government rolled out the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme in 2015. But currently, the FAME scheme is more suitable for established OEMs (Original equipment manufacturer) but doesn’t cater much to smaller outfits. 
• Significantly, the lack of any subsidy/incentive under the FAME-2 scheme for EV retrofitting is a major impediment in achieving cost parity with new ICE vehicles.
• Retrofitting adds electric vehicles to the roads without adding new vehicles. It is a great way for fleet owners, logistics companies to go green and save money at the same time.
• Homologation also remains a challenge for each new type of vehicle.
• EV retrofit market is highly nascent in India and there is a lot of policy ambiguity at both national and state levels.

After the lull due to the Covid-19 pandemic, the Indian auto sector is taking the bull by its horn and any government policy or decisions at the state or national level to allow for subsidized retrofitting of commercial vehicles in India will certainly help move the industry in the right direction. This is the first step towards creating an AtmaNirbhar EV ecosystem in India.

Karan Shah

Guest Author The Author is the Director of Business Development at Precision Camshafts Limited (PCL)