Delhi’s EV retrofit push: How converting old cars to electric works, and why it may be expensive

As the national capital continues to battle foul air, the Delhi government had announced plans last week to incentivise the retrofitting of old petrol and diesel cars and their conversion into electric vehicles (EVs) under its new EV policy. “Under this proposal, the government is planning to provide an incentive of Rs 50,000 for the first 1,000 old vehicles retrofitted into EVs. The plan is under consideration, and a final decision will be taken after Cabinet approval,” an official had said.

While retrofitting your petrol and diesel vehicle offers benefits ranging from lower maintenance costs to more regulatory compliance, it is not without its own challenges. According to experts, the nascent market, high GST rates on retrofit kits, and reduced financial benefit for owners in the long run are some key deterrents.

As per a research note from JMK Research and Analytics, an energy consultancy, a vehicle owner could incur 60-70% of the cost of a newly purchased EV just to convert their Internal Combustion Engine (ICE) vehicle to electric, making the option to retrofit less financially viable for many.

EV retrofitting refers to the process of converting existing petrol or diesel vehicles into electric vehicles. During retrofitting, the fuel tank, engine, fuel pipes, exhaust system, and engine accessories are replaced with a battery, controller, and motor.

The market for retrofitting, especially for personal two- and four-wheelers, is at a very nascent stage. It comprises mostly small companies and startups, many of which have not yet started commercial sales.

Tadpole Projects, a company incubated at and based out of IIT Delhi, promises to retrofit your Gypsy for Rs 6.5 lakh. It has a running cost of Rs 1 per km and offers a range of 200 km on a single charge, with a warranty of 1 lakh km.

For a Maruti Suzuki Swift Dzire, the estimated cost of conversion is Rs 6-7 lakh, with a range of 300 km on a full charge. Tadpole will start retail conversions in the next couple of months, according to founder Jawaad Khan. The company also plans to offer a Battery-as-a-Service (BaaS) model, which it claims will have a much lower upfront cost.

Folks Motor, another company in this space, promises to add an electric battery to your petrol or diesel vehicle and convert it into a hybrid electric vehicle. Once launched, it will retrofit your Dzire for around Rs 2.5 lakh, Brezza for Rs 3 lakh, and Ertiga for Rs 3.5 lakh. The company claims a 40-60% increase in mileage and a 30-50% decrease in running costs.

While advocates for retrofitting argue that it could deliver lower maintenance costs and help owners avoid regulatory hassles, many critics contend that the high costs of conversion make it a financially burdensome process for individual buyers.

According to Khan, driving EVs will also help you avoid the hassles of compliance with the Graded Response Action Plan (GRAP), End-of-Life Vehicles (ELV) regulations, and other requirements.

“While retrofitting ICE vehicles to EVs offers benefits like lower upfront costs and extended vehicle lifespan, it often costs 60-70% of a new EV due to the high price of batteries, which comprise around 50% of a new EV’s cost,” a research note from JMK Research and Analytics states.

“When factoring in assembly, disassembly, and other components, the price difference with new EVs is minimal, making retrofitting less attractive for individual buyers. Additionally, retrofitted vehicles lack warranties and often show signs of wear, making them a less appealing option for individual consumers,” it adds, noting that retrofitting is particularly advantageous for commercial and institutional buyers who benefit from economies of scale.

A total cost of ownership (TCO) analysis of retrofitted EVs over a 10-year period by JMK Research and Analytics shows only a slight financial benefit for retrofitted four-wheelers. While a retrofitted EV has the lowest TCO at Rs 6.32 per km, the TCO for a new EV is Rs 7.07 per km and for a new ICE vehicle is Rs 7.197 per km. For two-wheelers, the TCO for retrofitted EVs is Rs 1.6 per km compared to Rs 2.36 per km for a new EV.

Furthermore, it is not yet clear from real-world evidence the extent to which the lifespan of vehicles can be extended and the durability of real-world performance, a CSE report on retrofitting notes.

Moushumi Mohanty, Head of Electric Mobility at Delhi-based think tank Centre for Science and Environment (CSE) is a strong critic of retrofitting of personal vehicles.

According to Mohanty, retrofitting increases a vehicle’s lifespan by only 4-6 years, during which the battery will also experience reduced performance owing to the combination of the weight of the vehicle and degrading battery. Further, she adds that since the battery has to meet AIS 156 safety standards, the retrofitting process will neither be inexpensive nor easy.

Retrofit kits are costly, which is one reason retrofitting saw a lukewarm response the last time it was included in Delhi’s EV policy. One factor behind the high costs is that each model requires a different conversion kit. Each conversion kit must also be approved by a competent authority such as the Automotive Research Association of India (ARAI) or the International Centre for Automotive Technology (ICAT). Adding to the costs are the high GST rates imposed on retrofit kits. Each component of the kit is taxed at 18%, while a new EV benefits from just a 5% GST rate.

The homologation (certification) process for retrofitting is also time-consuming and involves high costs, the CSE report notes. The research and development process for a kit, as well as certification for one particular model, costs anywhere between Rs 50 lakh to more than Rs 1 crore. Low demand for retrofit kits also means that large-scale manufacturing, which would bring down costs, is not feasible.