Ayush Bhargava
Pranav Srivilasan
There are an estimated 5-6 million three-wheelers on the road today, across India.
Even if all three-wheeler sales were EVs from tomorrow, napkin math says it would take ~10 years to replace the entire fleet.
In reality, it would probably take twice as long to replace most of India’s ICE three-wheelers. The same logic holds true for every other class of commercial vehicle. In our opinion, this isn’t good enough.
If we’re serious about cutting carbon emissions, improving air quality and ensuring India’s energy security, electrifying commercial vehicles is vital. They account for only about 10% of vehicles – three-wheelers, buses, cargo vehicles and trucks of all sizes – but consume about 70% of the energy used in road transport.
The faster we can transition India’s commercial fleet to EVs, the better.
New vehicles have a big role to play, but something that often gets overlooked is the potential to upgrade existing vehicles.
As governments across India – from Delhi to Kerala – are drafting new EV policies, retrofits need to become part of the discussion.
The retrofit opportunity
Take an autorickshaw driver with a CNG or LPG three-wheeler that is 5-6 years old. The EMI has been fully paid off and it’s still in good shape, with no concerns.
This driver might not want to spend Rs 3.5-4 lakh on a new EV today, even if it saves money over the course of a year.
But an EV retrofit saves them ~Rs 3,000 a month almost immediately.
And once their 3-year EMI on the retrofit kit and battery is paid off, the driver will be able to save ~Rs 10,000 every month. That’s a huge sum for the driver, an almost 70% savings compared to running the old CNG auto.
We already know that EVs can help improve the livelihoods of millions of auto drivers and small commercial vehicle operators around the country. Retrofits make that EV dream more accessible:
Instead of a Rs 3.5-4 lakh loan for a new e-3W, they only need a Rs 1.5-2 lakh loan for a retrofit.
Loan approval rates go up, and the old vehicle gets a bump in value.
Drivers get a smoother ride, with great pick-up, and less noise and vibration.
They can go to existing service centers for vehicle maintenance (apart from the battery).
Each retrofit replaces a vehicle that emits around 4-5 tonnes of CO2 per year.
EV retrofits make better technology more accessible to more drivers across India and will have an outsized impact on our emissions as a society. And there’s already a playbook in the industry for this kind of transition.
Retrofits are not a new concept
Retrofitting commercial vehicles is a well-understood process and business in India.
India started to promote CNG as a fuel for commercial vehicles in the early 2000s. Especially in cities like Delhi, where air pollution is a major concern and CNG buses, autorickshaws and taxis were over time made mandatory.
Today, the majority of autorickshaws sold across the country run purely on CNG. But the initial transition happened through hybrid petrol+CNG vehicles, both factory-fitted and aftermarket retrofits.
Only in the past few years have pure CNG vehicles taken off.
The EV transition is already happening, but we can turbocharge that shift with retrofits.
Governments, gas distribution companies and vehicle manufacturers all worked together to make CNG vehicles and retrofits possible for cleaner air. We should approach EVs with the same mindset.
Are retrofits safe?
Yes, they are.
Just like with CNG retrofits, the government has laid down clear guidelines for retrofitting existing vehicles into pure electric or hybrid versions, with the AIS 123 standards published in 2015.
Electric retrofit kits need to be certified by authorized test agencies to meet safety and quality norms
Brakes, range, electricity consumption are all tested and verified
The retrofitted EV has strict weight limits (depending on the class of vehicle)
Kit manufacturers need to authorize retrofit centers and make sure technicians have the right training and equipment
The retrofit needs to be documented and vehicle registered appropriately
The long-term goal for the industry needs to be to build an ecosystem of centers around the country with the right skill sets to carry out electric retrofits. We need to train a workforce of vehicle technicians who can handle electrical and mechanical systems, with the right tools and processes in place.
To build customer trust, we have to deliver consistent, high-quality retrofits.
At the same time, we need EV policies across the country to ensure that retrofits get the right support.
A bigger push
Most government programs so far have focused heavily on new EVs and charging. Both are very important, but policy changes should account for retrofits as another lever to push EV adoption, much the same way it was done for CNG.
Key points where retrofit EVs will benefit from more support:
Subsidies for commercial vehicle retrofits under schemes such as the flagship PM e-DRIVE program.
Currently, retrofit batteries and kits have a GST of 18%, as against 5% for new EVs. There’s a need to equalize this.
Governments could help avoid scrapping and waste by giving a fresh 15-year registration period for retrofitted commercial EVs, subject to fitness checks.
Globally, vehicle manufacturers and governments across regions like Europe have in the past 3-4 years been looking at EV retrofits, especially for commercial vehicles (from delivery vans to medium/heavy loaders). The French government has subsidized electric retrofits; Stellantis has partnered with companies to offer retrofits for light commercial vehicles across its brands; Volvo two years ago started a program to convert construction equipment through electric retrofits.
The ground reality is that, both in India and around the world, it looks like retrofitting can be a bridge that helps cross over from fossil fuels to zero-emissions vehicles.