To invest in cars or charging points first

When Carmelita Fernandes, who lives in the Indian city of Pune, first made the switch from her regular car to an electric Tata Nixon in December 2021, she was excited for the journeys that would follow. After all, it was a “five-star rated car and sales were really skyrocketing in India” at the time, she said.

A little over two years after the switch, Fernandes regrets her decision: “I’ll never ever buy an electric vehicle again.”

In the first five months after the purchase, Fernandes’ car battery died halfway when she was on a 180-kilometer (111 miles) drive from Pune to Mumbai, two cities in the western state of Maharashtra.

The battery of the EV SUV that cost her 1.4 million Indian rupees ($16,700) tended to deplete faster than expected. “A 40% charge should easily take me for another 40km, but it dropped to 0% within 5km,” Fernandes said.

“If I can’t drive for four to five hours from Mumbai to Pune, I don’t think I can use the EV anywhere. It’ll be impossible to go to further cities like from Mumbai to Goa which are about 600km away from each other,” she told CNBC.

Fernandes’ story is not unique. In India, “Range anxiety” remains a significant hurdle preventing drivers from making the transition from internal combustion engine to EV cars, analysts said.

The world’s most populous country has an ambitious goal for 30% of newly registered private cars to be electric by 2030. However, out of around 4.2 million passenger vehicles sold last year, less than 2.5% were EVs, according to Bain & Company, an industry consulting firm.

“Charging infrastructure in India’s electric vehicle market is still not fully developed, but companies want more vehicles on the road before they invest more. On the other hand, potential electric vehicle buyers first want more chargers on the road,” said Brajesh Chhibber, partner at McKinsey India.

“It’s a chicken-or-egg problem on which should come first,” Chhibber told CNBC.

As of August 2023, Tata Motors dominated 72% of India’s EV market, followed by MG Motors with with a 10.8% share. EVs from Mahindra & Mahindra, Citroen, BYD, Hyundai and Kia make up the rest of the market, data from Canalys showed.

After the U.S., India has the world’s second-largest road network, spanning 6.3 million kilometers.

However, as of February, there were roughly 12,100 public EV car chargers in the world’s most populous country, still far from the 1.32 million chargers needed by 2030.

But charging companies are hesitant to scale up infrastructure for fear that they would be underutilized, said Mihir Sampat, partner at Bain & Company in Mumbai.

“The economics of running a charging point station are fundamentally driven by how much your chargers are…