Hygge Energy India – Revolution in electric vehicle charging
Hygge Energy India Services has set out to revolutionise electric vehicle charging through a technology platform that can not only be integrated to any electric vehicle charging or battery swapping system, but also provide truly zero-emissions transportation through the use of low-cost renewable energy for charging EVs and batteries.
The platform enables tracking, measurement, optimization, allocation, accounting and trading of renewable energy for EV charging. It is facilitated by the Hygge Box, a proprietary customer-premises IoT device that leverages embedded blockchain and machine learning-based AI.
It is supported by a next-gen mobile app that, in addition to scheduling and booking EV charging, tracks payments as well as carbon credits earned by users each time they utilise Hygge’s network. This will open up access to a $8 billion carbon trading market for EV charging
Q) How is the electric vehicle charging business shaping up in India?
Today’s EV charging business model in India is simply not a profitable one. It is unable to provide enough return on investment to smaller entrepreneurs to make it an attractive proposition, rendering it unviable. This is due to the high associated capital investment, which is so high not because of volumes, and equipment and installation costs of EV chargers, but also the need for increase in the distribution transformer size.
Larger, for-profit corporations don’t invest in the EV charging business unless they are mandated by the government or they receive government incentives to do so. The business is led by PSUs as they are getting these incentives. Additionally, utilities, private and public alike, are investing in EV charging as they find it to be a new sales channel to sell their electricity.
Q) What is the trend in this segment? What is the role of technology?
An interesting trend we are seeing in the Indian EV charging space is the growing preference for slow AC chargers over fast DC chargers in public charging spaces. The former takes anywhere from 2 to 12 hours to fully charge an EV.
Within the next two years, the proportion of EVs in India is projected to exceed 6%. Among these, e-rickshaws are expected to have the highest adoption rate at 4%, followed by two-wheelers at 3.5%, and then four-wheelers at 1.3%. Consequently, the types of EV chargers at public charging stations will need to cater to this demand. The battery chemistry of most EVs in India, especially e-rickshaws and also a lot of electric cars and bikes, does not accommodate DC fast chargers with a power output greater than 50 kW. Furthermore, many cars produced in India lack on-board chargers capable of supporting higher power chargers, and the charging electronics incorporated into most EV batteries restrict the rate at which fast charging can occur.
The major goal of high-power chargers is to deliver a 15-minute charging experience. However, this requires the battery to charge at a rate that is 4 times its capacity, which is neither advised nor supported. As lithium-ion batteries are charged, they heat up, which causes the majority of their deterioration. The charging process ages them; the aging of a battery is directly proportional to the charging rate. Fast charging is highly discouraged by manufacturers. 1/4th the EV battery’s capacity is the ideal charging rate.
Another trend we have noticed is the shortage of manufacturing capacity for good quality EV chargers. It is estimated that the Indian market for EV charging will experience CAGR of 46.5% until 2030. To cater to the projected surge in EV sales, Niti Aayog has recommended the establishment of 3.9 million EV charging stations in India by 2030, a number that far exceeds the figures outlined in current policies. In order to not only facilitate the expected increase in EV sales but also encourage more widespread adoption of EVs in light of mounting climate-related crises, it is crucial to accelerate the development of EV infrastructure throughout the nation. Nonetheless, there are new players entering the market who, ideally, will be prepared when the Indian market hits this peak.
The third trend we have seen is the lack of a defined pricing policy for EV charging. This has led to a lack of clarity in terms of the expected return of investment for businesses in the EV charging space, serving as a further deterrent to investment. In this type of market, it is not the first mover’s advantage, but the second’s.
However, policy cannot work in a vacuum. It must be supported by technology. The only way to make the EV charging business profitable is to make it scalable through vertical integration with services such as battery swapping, and carbon trading and horizontal integration with services such as CNG and hydrogen filling. This can be achieved though smart technology.
Smart technology can enable advance EV charger slot booking, integration of EV charging operations with local solar or other renewable generation and hence aggregation and monetization of carbon credits to further improve profitability, and comprehensive next-gen apps that will provide convenience and ease-of-use to EV drivers to drastically improve the overall customer experience and drive traffic to EV charging stations.
Q) What are your new priorities and strategies to emerge as an important player in this vertical?
We are differentiating ourselves by concentrating on the key problem statement in the industry that is also the main pain point of our own customers and partners – we are making the EV charging business profitable. Hygge is razor-focused on improving the profitability of our clients, customers, electric vehicle charging operators and other stakeholders of the EV charging value chain, while also improving the customer experience for EV drivers.
In terms of the EV charging operators on our platform, we are careful and selective; we assist them in establishing their EV operations by guiding them through a stringent step-by-step process.
Our other main focus is promoting renewable energy and showcasing India as a trailblazer of clean technology, and helping the country meet its net-zero goals. We have partnered with national transmission companies that source renewable energy for our EV charging operators. We want to bring the benefit of renewables-centric EV charging to large Indian companies who are in great need of carbon credits. The current business model and technology does not allow aggregation of carbon credits for monetization. With a renewable energy-based EV charging solution that tracks and records energy from source to end use, hence creating auditable carbon trails, Hygge is opening up access to a $10 billion carbon trading market for EV charging, which represents a huge opportunity for large corporations to generate carbon credits.
Q) What are the plans for Hygge Energy for the India market?
We are currently in the process of appointing franchises, which include entrepreneurs like EV charger and solar installers, fuel station chains, retail spaces such as shopping complexes and malls, medical centres, industrial spaces such as warehouses and data centres, college and office campuses, hotel and restaurant chains, stadiums and arenas, public parking lots, and government undertakings such as railways, metros and PSU employee residential colonies.
In addition to appointing franchises, we have tied up with some large investment houses in India to fund our growth over the next 5 years. To start with, we are in raising ₹ 110 crore by the end of the year.
With the India leadership team already in place, we are now hiring the rest of our local team as well.
Q) How do you visualise the EV market in India two years down the lane?
Once the EV charging business become profitable, it will grow exponentially. We expect it to plateau at 20-25% of the total vehicle market, which is a little higher than the global benchmarks. Following this, we believe hydrogen will become the fuel of choice for the Indian market, which has been well demonstrated by the government of India and its push to make India a leader in hydrogen manufacturing. The last mile delivery segment will remain dominated by EVs in our view, with 1-5 ton 2-, 3- and 4-wheeler vehicles making up the majority.