Will India’s EV Swapping Plan Work?

A look at the ground realities of India's EV swapping plan

EVs have been in the news for all the wrong reasons in recent times. However, a new proposal by the government could be an important step in helping accelerate their mainstream adoption.

This new proposed policy comes against the backdrop of various EVs bursting into flames. The crux of this policy framework is making the batteries used in EVs swappable across models. The proposed new policy is the brainchild of Niti Aayog.

The proposed policy, which sets standards for battery pack size and charging interfaces to support interoperability, will enable the decoupling of battery costs from the initial cost of buying electric vehicles, accelerating EV adoption, according to Niti Aayog. Various news reports indicate that there could also be plans underway to provide incentives to buyers of electric vehicles with swappable batteries. These incentives could be up to 20% of the entire battery lease cost. Ergo, can the new policies and likely incentives help inspire trust among the masses?

Understanding battery swapping

As the name suggests, exchanging discharged batteries for charged ones is referred to as battery swapping. This allows you to charge these batteries individually by decoupling charging and battery consumption, and it keeps the car running with minimal downtime. Smaller vehicles, such as two-wheelers and three-wheelers, with smaller batteries that are easier to replace, are more commonly utilised for battery swapping than four-wheelers and e-buses, however solutions are appearing for these bigger categories as well. Battery swapping offers convenience and can facilitate the better monitoring of EV batteries.

Another facet is that while EV charging is far more economical than conventional fuel, the hassle of charging at frequent intervals can be off-putting. Battery swapping addresses some of the key challenges of EVs: The charging time is slow, the vehicle range is limited, and the upfront vehicle costs are higher than their petrol or diesel counterparts. Battery swapping could be the answer to logistics and last-mile delivery challenges using EVs. Imagine if logistics using EVs garnered momentum and the savings that would get passed on to end users. It could lead to a domino effect for greater economic stability.

Standardization is a challenge

Enforcing interoperability is not going to be easy due to multiple reasons. Each company today has a different battery management system, power, and efficiency requirements. Another facet is that if India has ambitions of becoming a leader in the EV space, focussing on a one-size-fits-all approach may curtail innovation. Finally, the battery chemistry from different manufacturing would change. If something were to go wrong then it would be difficult to place responsibility. On the flip side, a Bloombergquint story highlights that there are at least 50 companies seeking opportunities in the battery-swapping space. For instance, Reliance Industries Ltd. and Britain’s BP Plc created a joint venture for battery swapping in the country last year. Hero MotoCorp Ltd. and Gogoro of Taiwan have also teamed together. Honda Motor Company of Japan has also established a battery-sharing and swapping business in India. Bounce, a Bengaluru-based startup, became the first OEM to release an electric scooter without a battery pack.

Sun Mobility, has a network of 70 exchanging stations and plans to add 40 each month. Chargeup now has roughly 100 stations in Delhi, with plans to expand to 1,000 by the end of the year as it extends into other cities.

Another challenge is with regard to financing. Considering the narrative around EVs and their safety today, financial institutions are reluctant to offer financing options given the uncertainty of EV technology and the resale cost of batteries.

Authored by: Lionel Alva

Edited by: Queenie Nair

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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