As India’s electric vehicle (EV) landscape rapidly evolves, the critical question of robust charging infrastructure takes center stage. Is the growth fast enough? Is the funding adequate? We recently had the privilege of an insightful conversation with Kartikey Hariyani, Founder & CEO of ChargeZone, one of India’s pioneering EV charging network operators. Speaking with Amit Panday, Senior Research Analyst at S&P Global Mobility, Hariyani, an electrical engineer and Stanford alumnus, shared his compelling perspective on India’s EV adoption journey, ChargeZone’s strategic expansion, and their groundbreaking move towards off-grid, sustainable charging solutions.
Globally, the capital-intensive EV charging business faces headwinds amid a slowdown in Battery Electric Vehicle (BEV) adoption. Yet, Hariyani firmly believes that infrastructure must precede adoption to accelerate the transition. Despite ChargeZone’s aggressive expansion across the subcontinent, he maintains the Indian EV charging space remains significantly underfunded, presenting both challenges and immense opportunities. ChargeZone, already EBITDA positive, is now setting its sights on PAT profitability as capacity utilization steadily climbs towards 20%.
ChargeZone: Leading India’s EV Charging Network
ChargeZone has cemented its position as a frontrunner, if not the largest player, in India’s burgeoning EV charging sector. Hariyani offered a detailed look into the company’s extensive operations and ambitious future plans.
Extensive Footprint and Strategic Partnerships
- Charging Points: ChargeZone boasts an impressive network of 15,000 charging points across India. This includes both COCO (ChargeZone-owned and ChargeZone-operated) and DOCO (dealer-owned and ChargeZone-operated) models, ensuring a diverse and accessible network.
- Financial Backing: The company is strongly supported by two global private equity funds, Macquarie Capital and VI Practitioners International, each managing over $1 trillion in assets. This makes ChargeZone the only CPO in India with such significant backing.
- Core Focus: Since its inception in 2019, ChargeZone’s mission has been clear: to invest, build, own, and operate EV charging stations, providing “EV charging as a service.”
- An Energy Company: More than just a charging provider, ChargeZone operates as a full-fledged energy company, currently dispensing an astounding 10 Gigawatt-hour units of electricity from its network every month.
- OEM Alliances: A key differentiator for ChargeZone is its strong partnerships with Original Equipment Manufacturers (OEMs), or carmakers. This collaborative approach has been crucial in expanding its reach.
- Strategic Locations: ChargeZone has strategically focused on setting up chargers on highways and in cities, catering to freight charging, intercity electric mobility, and both personal and commercial vehicle usage.
Ambitious Growth Trajectory
ChargeZone is targeting a remarkable 10x growth from its current annual revenue of approximately INR 1,350 million (~$15.33 million). The company is growing at an impressive rate of 70% to 80% per year. Hariyani noted an “unexpected spurt” in demand for EV chargers since the beginning of the year, a direct result of various OEMs launching new EV models in the Indian market, signaling a positive shift for the entire energy transition in mobility.
Decoding EV Adoption Trends in India
The automotive industry in India presents a diverse mix of vehicles. While two-wheelers and three-wheelers have seen significant EV penetration, the four-wheeler segment, though growing, remains at approximately 4-5% of new car sales. Kartikey Hariyani provided a deeper understanding of these dynamics.
Focusing on Commercial Mobility for Impact
Hariyani emphasizes that true reduction in tailpipe emissions hinges on addressing the commercial mobility segment. This includes three-wheelers, light commercial vehicles (LCVs), buses, and trucks, as opposed to solely focusing on personal mobility (two-wheelers and cars).
The Recent Surge in 4-Wheeler EVs
Despite the monsoon season, traditionally a period of lower new car sales, the last two months have shown a different trend. The percentage of electric cars in new car sales has nearly reached 5%, demonstrating a consistent 10% month-on-month growth over the past six months. This positive momentum is mirrored in ChargeZone’s energy utilization, which has seen 12-15% month-on-month growth since February.
This growth is largely attributed to OEMs rolling out new EVs in the four-wheeler and large-format commercial vehicle segments, directly boosting utilization rates for ChargeZone’s network.
While two- and three-wheeler electrification continues its strong trajectory, Hariyani predicts the four-wheeler segment will expand significantly as per capita income rises. Most new electric car models are being launched in the INR 1 million ($11,350) to INR 3 million ($34,000) price bracket, with recent models from Mahindra and Tata Motors receiving strong market reception.
Capacity Utilization and the Inflection Point
Understanding the utilization rates of charging stations is crucial for profitability and growth. ChargeZone’s data offers valuable insights:
- Overall Average: The average capacity utilization across ChargeZone’s entire network has reached approximately 13.5%, encompassing both fleet charging and highway charging.
- Segment-Specific Utilization:
- Highway chargers: Exceeded 6% utilization.
- Fleet charging hubs in cities: Ranging from 18% to 25% utilization.
- Recent Growth: While the previous two years saw relatively flat growth (1-2% month-on-month), the last six months have brought a significant double-digit growth, particularly driven by the four-wheeler and electric commercial vehicle segments.
- Continuous Expansion: Despite varying utilization, ChargeZone has maintained a steady pace of setting up one new charging station per day, underlining its commitment to infrastructure development.
Defining the Inflection Point
For ChargeZone, the true inflection point for the EV charging business will arrive when new electric car sales constitute 10% of the overall passenger car sales in India. This benchmark signifies a maturing market where EV adoption becomes mainstream.
The Capital-Intensive Challenge & India’s Unique Path
The EV charging infrastructure business is undeniably capital-intensive, facing fiscal stress and consolidation in Western markets due to slower-than-anticipated BEV uptake and a global surge in hybrid vehicle demand. Hariyani offered a clear perspective on this global trend and India’s unique position:
“It’s very clear that there is no chicken and egg story over here. The EV charging infrastructure comes first, followed by the adoption of EVs.”
The Scale of India’s Need
India sells six million cars and about one million trucks annually, with electrification beginning in both segments. Hariyani estimates the Indian EV charging infrastructure market to be roughly a $10 billion (approx. INR 900 billion) capex market. To meet India’s target of 30% EV penetration by 2030, a minimum of 300,000 EV charging stations, and ideally over 1 million, will be required.
Currently, companies like ChargeZone, Jio BP, Tata Power, and other Charge Point Operators (CPOs) combined have invested a maximum of about INR 15 billion (over $170 million), highlighting the massive funding gap. India needs a mix of high-speed chargers, destination chargers, workplace charging, and home charging facilities across the country. Hariyani firmly believes that “no matter how much we do, it is not going to be enough at this stage, at least for the next five years.”
India vs. Global Markets: A Different Trajectory
Unlike Western markets like the US and Europe, which are predominantly car-centric, India mirrors China with its diverse mix of cars, buses, commercial vehicles, and other categories in EV adoption. This unique market composition requires a tailored approach to infrastructure development.
Megawatt Chargers: Ahead of Their Time for India
While megawatt chargers are being installed in Europe, the US, and China for heavy commercial vehicles, Hariyani believes it’s too early for India. Though early pilots for electric heavy-duty trucks are underway, the immediate need for megawatt charging stations (MCS) is not yet present.
Profitability and Operational Strategy
Achieving profitability in a nascent, capital-intensive market is challenging, but ChargeZone has a clear roadmap.
- EBITDA Positive: ChargeZone has successfully remained EBITDA positive for the past two years, a testament to its disciplined financial management and a key factor in attracting continuous investment.
- PAT Profitability Target: The goal for Profit After Tax (PAT) profitability is linked to achieving a utilization rate of 20%-25%. The consistent month-on-month growth, especially driven by commercial mobility, provides strong confidence in reaching this target.
- DC Fast Charger Dominance: About 98% of ChargeZone’s installed chargers are DC fast chargers, emphasizing their focus on quick, efficient charging solutions.
Site Selection: A Strategic Imperative
ChargeZone employs a meticulous process for selecting charging station locations:
- Quality & Public Access: Ensuring high-quality locations with easy public accessibility.
- EV Heat Map: Utilizing data to identify areas with a high presence of personal and fleet EVs in cities.
- Commercial & Industrial Corridors: For highways, focusing on key industrial and commercial routes across India.
- Co-location with Amenities: Strategically placing charging facilities alongside existing restaurants and eating joints to enhance convenience for EV users.
Sourcing Quality Charging Equipment
ChargeZone sources its fast-charging equipment from reputable global and domestic suppliers, including Exicom, Siemens, Mastek, and Star Charge, ensuring reliability and advanced technology.
Pioneering Off-Grid & Renewable Energy Solutions
ChargeZone is not just building infrastructure; it’s integrating sustainable and resilient energy solutions, particularly to address grid reliability challenges and promote green energy adoption.
Introducing Battery Energy Storage Systems (BESS)
The company has started proactively sourcing renewable energy on the upstream side. To enhance grid reliability, especially in areas with fluctuating power supply, ChargeZone has installed EV charging stations integrated with Battery Energy Storage Systems (BESS) at roughly seven highway locations.
India’s First Off-Grid Solar & BESS Hub in Gujarat
In a groundbreaking move, ChargeZone is constructing a mega charging hub for electric trucks in Gujarat. This facility will feature India’s first-ever off-grid solar plant integrated with a BESS. This significant investment of INR 100 million will power:
- Solar Capacity: Approximately 1.8 megawatts (MW) of solar power.
- Battery Storage: 3 MW of battery energy storage.
- Capacity: Capable of catering to at least 50 electric trucks every single day.
This initiative represents a major leap forward in sustainable EV charging, demonstrating how charging infrastructure can operate independently of the conventional grid, enhancing reliability and reducing carbon footprint.
Government Policy: A Simple Yet Crucial Recommendation
When it comes to government policy, Kartikey Hariyani has a clear and singular recommendation:
The government should reduce the fixed demand charges imposed by Discoms (power distribution companies) on EV charging stations. These charges were traditionally designed for 24/7 factory operations or commercial buildings, which have consistent, high utilization. In contrast, EV charging stations currently experience much lower utilization rates.
Gujarat and Delhi have already implemented such reductions, setting a positive precedent. ChargeZone’s core message is clear: they are not seeking subsidies or other financial support from the government. Their sole request is for a reduction in these fixed demand charges to foster a more conducive environment for EV charging infrastructure development.
ChargeZone’s journey, led by Kartikey Hariyani, paints a clear picture of resilience, strategic innovation, and a profound belief in India’s EV future. Their proactive approach to infrastructure, financial prudence, and pioneering sustainable solutions sets a benchmark for the industry.
The road ahead for India’s EV revolution is long, but with visionaries like ChargeZone at the helm, the path is becoming clearer, greener, and more accessible.
Frequently Asked Questions (FAQ)
What is ChargeZone?
ChargeZone is a leading Indian EV charging infrastructure provider that builds, owns, and operates EV charging stations, offering “EV charging as a service.” It is backed by major global private equity funds and operates 15,000 charging points across India, with a strong focus on DC fast chargers.
Why is EV charging infrastructure crucial for India’s EV adoption?
Kartikey Hariyani firmly believes that the charging infrastructure must come first to accelerate EV adoption. Without a robust and accessible network of charging stations, consumer confidence in EVs will remain low, hindering the overall transition to electric mobility. It’s the “chicken and egg” scenario where infrastructure must be the “chicken.”
What is the “inflection point” for EV adoption in India, according to ChargeZone?
ChargeZone defines the inflection point as the moment when new electric car sales constitute 10% of the overall passenger car sales in India. This signifies a significant shift in market dynamics and accelerated growth for the EV charging industry.
How is ChargeZone addressing grid reliability and sustainability?
ChargeZone is actively integrating Battery Energy Storage Systems (BESS) at its charging stations, particularly on highways, to enhance grid reliability. Furthermore, they are pioneering India’s first-ever off-grid solar plant with BESS for a mega truck charging hub in Gujarat, ensuring sustainable and resilient energy supply independent of the traditional grid.
What is ChargeZone’s key recommendation for government policy?
ChargeZone’s primary recommendation is for the government to reduce the fixed demand charges imposed by power distribution companies (Discoms) on EV charging stations. They argue that these charges are disproportionately high for EV chargers, which currently have lower utilization compared to other commercial establishments, and that reducing them would significantly aid infrastructure development without needing subsidies.
What is the difference between COCO and DOCO models for ChargeZone?
COCO stands for “ChargeZone-owned and ChargeZone-operated,” meaning ChargeZone directly owns and manages these charging stations. DOCO stands for “dealer-owned and ChargeZone-operated,” where a dealer or third-party owns the physical location or equipment, but ChargeZone manages and operates the charging services.
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