The World Bank Group commissioned Steer to develop a comprehensive market assessment tool covering the overall 2W, 3W, and 4W cargo/freight fleets, passenger fleets and bus markets, together with supporting charging infrastructure, with deep dives into selected cities across three states. The study aims to identify an action plan to promote rapid growth in the most promising business sectors by leveraging the financial capacity of the World Bank Group with changes to the regulatory and policy environment to reduce/remove barriers to the take up of EVs.
This assignment involved developing a detailed understanding of the factors that drive the value chain, translated into business models that can develop and sustain the e-mobility market in an Indian context. These models have been evaluated for each mode (e-2W, e-3W, e-buses, e-fleet) and each market segment (shared, personal, commercial), reflecting the differences in patterns of ownership and usage (passenger, freight). In addition, the corresponding charging infrastructure, including battery swapping facilities, was assessed to create a viable operating environment for supporting the uptake of the selected business models. Finally, based on the market assessment and business model analysis, our team also identified investment opportunities across market segments for the WBG where such instruments can help in catalysing private capital.
This study was led by the NITI Aayog (central policy-making body of India). The action plan recommendations were presented to them over two workshops and separately discussed with state governments of the selected states to influence change in the EV policy environment. As a result, many recommendations have been included in revised policy documents issued by Central Government agencies, such as the introduction of scrappage and a draft battery swapping policy.
As presented, NITI Aayog and the World Bank Group are setting up a $300 million first loss risk-sharing instrument which would act as hedging and guaranteeing mechanism for banks and NBFCs to manage delays or defaults on EV loans. This is expected to reduce financing costs by 10-12%. The report recommends that if action plan recommendations are implemented with the financing solution of a wholesale market first loss facility, it would lead to a cumulative well-to-wheel carbon savings of 56 million tonnes across FY2022-30.
The World Bank Group has been working with Convergence Energy Services Limited (CESL), a subsidiary of Energy Efficiency Services Limited (EESL), to work on an aggregator model for e-buses procurement and has been successfully concluding the tender for 5,450 e-buses. Steer worked with the WBG to study alternate business models for e-bus procurement. The aggregator model was the key recommendation for reducing the upfront capex associated with e-bus.
Download the full report:
Electric Mobility Market Assessment, Business Model and Action Plan in India.
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