How Battery Swapping Can Provide A Big Boost To India’s Electric Vehicles Industry

Mahesh Wagle Aug 12, 2022

Electric vehicles (EVs) have always held immense possibilities for a cleaner and greener planet. Despite its potential, lack of adequate infrastructure, range anxiety and allied challenges have held back the industry’s progress.

But viable solutions are making their presence felt in overcoming the current challenges. One such solution is battery swapping, which aims to address the dual concerns of range anxiety and the lack of adequate charging infrastructure in India. Thanks to its potential, some start-ups are offering battery-as-a-service to accelerate the growth of EVs.

Besides boosting EV infrastructure and its overall ecosystem, the country’s Battery Swapping Policy mentioned in the 2022-23 Budget will provide a fillip to India’s 2030 SDGs (sustainable development goals) and its mission of decarbonisation by phasing out fossil fuels.

Decoding the Concept

At this juncture, it is necessary to understand what battery swapping is all about. Herein, a discharged battery is replaced with a fully-charged one as recharging the spent battery would take considerable time, leading to downtime losses when the vehicles stand idly for hours together during recharge. To date, battery charging was perceived as a formidable barrier to the promotion of EVs as a single full charge can take up to four hours.

To avoid such a scenario, when their batteries are running low, drivers or owners of EVs only need to visit a battery-swapping station and exchange them for fully-charged ones of the same type – all within minutes. This is akin to the time taken by conventional vehicles in filling their tanks. In this model, batteries are not sold as a product but, instead, provided as a service for a fee.

Considering the challenges in creating EV charging infrastructure across the nation and the hassles of getting batteries charged through them – amply illustrated by the long lines at CNG charging stations – the battery swapping model is extremely effective and efficient. As a result, battery swapping centres save massive costs, time and resources that would otherwise be invested in creating multiple EV charging stations across every city.

Additionally, swapping will increase the use of commercial EVs, helping buyers achieve breakeven much faster. In turn, aggregation and delivery businesses will be more motivated to deploy EVs in their fleet and the owners can ensure vehicles keep running without worrying unduly about excess charging time. Driven by these advantages, the profit margins of commercial EVs will increase.

The other hurdle has been range anxiety that users suffer since they aren’t sure when and where their batteries will run out of charge. Taking cognisance of these issues, in the 2022-23 Union Budget the Centre announced that a Battery Swapping Policy would be introduced soon.

Furthermore, the provision for interoperability norms in this Budget will accelerate collaborations in the EV industry, increasing the pace of establishing pan-India battery-swapping networks. Encouraged by the institutional support for this model, more private companies are expected to offer energy or battery as a service, leading to the creation of new business ventures in battery swapping.

Benefitting Ecology and the Economy

While there has been much talk about EVs for years, their growth has not been as rapid as anticipated. Among other reasons, this has much to do with the higher cost of acquisition and ownership of EVs vis-à-vis ICE (internal combustion engine) vehicles. For instance, EVs are 1.5 to 2x more expensive than ICE vehicles. An ICE car that sells at Rs. 10 lakh will have an EV version selling for around Rs. 16 lakh.

Thanks to battery swapping, however, manufacturers can provide batteries separately, bringing down the vehicle’s cost. Since battery costs currently comprise between 40 per cent and 70 per cent of an EV’s upfront expense, if sold separately, it shifts this cost from ownership to operations. Therefore, fleet owners can purchase cars without batteries and use the battery swapping service to run vehicles, significantly lowering their initial investments.

Range anxiety has been another dampener in EV sales since buyers are worried the battery may run out before they could locate or reach the nearest charging station. As EV charging stations are few and far between, range anxiety can be especially severe during outstation trips. Even after a charging station is located, replenishing 80 per cent of the battery requires more than an hour.

All the above problems can now be addressed via a single solution – battery swapping. Enthused by the potential, both public and private sector companies are keen on opening charging stations. This will benefit logistics players and delivery aggregators who can reduce delivery time and overheads.

Battery swapping stands to benefit two-, three- and four-wheelers. Ola has already opened a battery swapping unit for its e-rickshaws in Gurugram. Once this model catches on, more players are expected to take the plunge into this segment.

Moreover, this will aid the shift toward a circular economy as the emphasis will remain on recycling and repurposing batteries. Also, manufacturing will be done with recycled material, majorly reducing the need for sourcing, benefitting the environment, the economy and the industry at large. Finally, together with the drive toward interoperability standards, battery swapping is slated to mainstream EVs across India by overcoming the segment’s present challenges.