EV retrofit push: How converting old cars to electric works & why it may be expensive (UPCOMING EV POLICY), Pg4

Key Highlights:

• The Delhi government plans to incentivize EV retrofitting of old petrol and diesel cars with a Rs 50,000 incentive for the first 1,000 vehicles.
• EV retrofitting involves replacing the engine components of a vehicle with a battery, controller, and motor.
• The cost of retrofitting can be 60-70% of a new EV, making it less financially viable for individual owners.
• High GST rates on retrofit kits and time-consuming homologation processes are hindering the adoption of retrofitting.

Detailed Insights:

• EV retrofitting aims to lower maintenance costs and ensure regulatory compliance, but faces challenges like a nascent market and high costs.
• Companies like Tadpole Projects and Folks Motor offer retrofitting services, with costs ranging from Rs 2.5 lakh to Rs 7 lakh depending on the vehicle model.
• JMK Research and Analytics suggests that retrofitting may only offer a slight financial benefit over a 10-year period compared to new EVs or ICE vehicles.
• Retrofitting may be more advantageous for commercial and institutional buyers who can benefit from economies of scale, despite the lack of warranties for retrofitted vehicles.
• The high cost of retrofit kits, varying conversion kit requirements for each model, and 18% GST on kit components contribute to the slow adoption of retrofitting.

Key Concepts Involved:

• EV Retrofitting: Converting petrol or diesel vehicles into electric vehicles by replacing engine components with electric components.
• Homologation: The process of certifying that a vehicle or component meets required regulatory standards.
• Total Cost of Ownership (TCO): An estimate of all direct and indirect costs associated with owning an asset over its lifespan.