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Published on: Sept. 11, 2022, 8:32 p.m.
Gaps in battery swapping policy
  • Inadequate charging infrastructure is the major hurdle

By Rakesh Joshi. Executive Editor, Business India

The high prices of electric vehicles, inadequate charging infrastructure and the long time taken for charging have been the major hurdles to the adoption of electric mobility in the country. The government and the industry together have been thinking about ways to bridge the gap and scale up the EV infrastructure. Battery swapping is now emerging as a preferred solution. With battery swapping expected to take less than a minute, this will ensure almost zero downtime and a hassle-free experience for the riders.

Recently, battery-swapping start-up VoltUp announced a partnership with Adani Electricity, Hero Electric and Zomato, to open 500 electric mobility stations across Mumbai by 2024, catering to over 30,000 riders daily. This is the first smart mobility partnership in India between a battery-swapping start-up and infrastructure, original equipment manufacturer and last-mile partners.

However, the battery swapping policy still has huge gaps. After the government announced the policy in the 2022-23 Budget, the NITI Aayog came out with the policy in April. The policy focusses on two-wheelers, three-wheelers, light electric power train vehicles and e-rickshaws/e-carts and is intended to promote swapping of batteries with advanced chemistry cells.

The swapping stations have been planned to be set up in urban areas in two phases, spread across a period of three years. The policy is valid from the date of its public notification till 31 March 2025, after which the ministry for power may review, revise and extend its validity.

Some of the key features of the Policy are: 

• batteries will be equipped with advanced features like Internet of things-based monitoring system; 

• a unique identification number will be assigned to batteries and battery swapping stations; 

• existing incentives for purchasing EVs will be extended to batteries covered under this Policy;

• provision of technical guidelines, standards and principles will be required to establish a battery as a service model (BaaS);

• concerned ministries and state governments will provide electricity to swapping stations at concessional rates; and 

• land required to set up swapping stations to be provided by both government and public entities on a revenue sharing basis.

Standardisation of batteries

While there are pluses and minuses in battery swapping and battery charging, the government is yet to conclusively address the issues that could act as a drag on the former. One of the issues in introducing swappable batteries is standardisation of batteries. In order to swap discharged batteries with a charged one at any swapping station, it is important that all EVs use a standard battery pack and connector to charge the battery.

In the absence of standard batteries or battery modules adapting to all size and models, swapping stations will be able to cater to vehicles only with a specific type of battery pack.

Further, the policy does not extend to four-wheelers. However, it is important to note that the BaaS ecosystem in India covers the mass market of two-wheeler and three-wheeler batteries, which captures the bulk of the EV market share and in comparison, to four-wheelers are easier to swap.

  • There are challenges around inter-operability and battery standardisation, especially when industry players betting big on battery technology differentiation

The applicable GST for BaaS is about 18 per cent which, in a developing sector, may be substantially higher.

Comparing the two modes, industry experts point out that battery swapping reduces the upfront cost as the vehicle is sold without the battery, which constitutes 40-50 per cent of total cost. It reduces range anxiety and vehicle downtime, resulting in a positive impact on the earnings of commercial drivers. It minimises infrastructural needs, given the low space requirement, which is crucial in densely populated areas (the Sun Mobility Quick Interchange Station looks like two midsized washing machines welded together). The swapping model also demands lower battery size and range, thereby reducing the lithium requirements at the industry level. 

There are challenges around inter-operability and battery standardisation, especially when industry players betting big on battery technology differentiation. There is a big liability debate in case of any mishap with a vehicle running on a swapping model.

On the other hand, battery charging provides a sense of ownership to customers and quality perception for branded batteries. It enables the industry to remain competitive through differentiation of cell technology, battery configurations, thermal management, BMS, etc, as OEMs look to enhance their value proposition by offering better range, longer battery life and faster charging. Charging station operations are more cost-efficient with minimal operating and maintenance requirements.

But the long time required for charging (6-8 hours for four-wheelers), range anxiety and concerns on availability of charging stations are key obstacles from a customer’s perspective. 

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