Government to roll out battery swapping policy soon

In a bid to further accelerate EV adoption in the country, Finance Minister Nirmal Sitharaman announced that the Government will be introducing a battery swapping policy. She emphased that the policy will cover the standards for inter-operability and acknowledged the challenges of setting up charging infrastructure in urban cities.

In addition, the ‘battery as a service’ model, which the government is promoting, will further ensure the initial cost of electric vehicles would come down significantly. As per estimates, the cost of a battery makes up for a significant percentage in an electric vehicle. Furthermore, the Budget 2022 also touched upon the government’s plans to create special mobility zones with zero fossil fuel vehicles. These special zones are expected to further drive adoption of the green vehicles.

Industry welcomes move
Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles (SMEV) said, “Introducing the battery swapping policy would motivate businesses engaged in delivery and car aggregation businesses to incorporate EVs into their fleet. Additionally, creating special clean zones will further accelerate the adoption of EVs and spread awareness amongst the citizens. The move will benefit the whole segment.”

He added that, “The budget also provides attention to the need for skilled resources in the industry. Introducing new skill programs in ITI will bridge the skill gap that currently exists in the industry.”

Rajat Verma, CEO and co-founder, Lohum, an integrated litium-ion battery manufacturing and recycler pointed out, “new tech development in batteries will go a long way in decreasing the dependence on the imported battery tech and help domestic firms overcome the global supply-chain and geopolitical issues. However, with more battery per EV, the need for recycling these batteries will be incrementally necessary for driving sustainability through clean mobility.”

Naveen Munjal, MD, Hero Electric added that, “The move (battery swapping and battery standardisation) will open up avenues for further growth and development of the EV and energy sector in the country. Interoperability standards will help address range anxiety issues and battery swapping stations will be an asset to the evolving EV ecosystem across the country.”

Sulajja Firodia Motwani, founder and CEO, Kinetic Green “Budget 2022 is a futuristic budget with focus on deployment of advanced technology like EV, green mobility and digitisation.. Green energy and clean mobility systems have immense potential to assist sustainable development and modernise the country. This will further enhance connectivity and digitisation of the auto sector and is expected to help automotive in a greater way. Further announcements such as ramp up of capital expenditure and spending on infrastructure will boost economic growth.”

Chetan Maini, chairman and co-founder, Sun Mobility added that, “As the policy unfolds, it would be great to see the government addressing key points around how customers can access subsidies (currently available for EVs), range per charge criteria (as swap batteries, by definition, are smaller and with less range) and GST for swapping services in line with EVs.”

Diego Graffi, chairman and MD, Piaggio Vehicles feels it, “will help in reconciling supply chain constrains and make them more robust. Larger battery swapping infrastructure will help enhance EV infrastructure and should propel adoption of EVs. We are glad that government is encouraging to create sustainable and innovative business models for battery and energy as a service, improving the efficiency in the EV ecosystem.”

Maxson Lewis, MD and CEO, Magenta believes “The fact that the government will also formulate interoperability standards to improve the efficiency of EV business is a good indication and will support the growth of the infrastructure. What was missed was an explicit statement of the extension of the FAME scheme and how it can support the expansion of the charging network in India to help facilitate the switch from petrol and diesel-based vehicles to EVs.”

Nishchal Chaudhary, founder, BattRE Electric Mobility explained, "Implementation of battery swapping policy help in reducing the upfront cost of EVs by up to 40%. Rs 2.73 lakh crore MSP payments will improve rural economic sentiment and will indirectly increase vehicle demand."

Suhas Rajkumar, CEO and founder, Simple Energy added, “Impetus should be given on developing safer battery packs as swapping stations cannot be applied to direct consumers given the safety aspect as this will further lead to making the ownership of the vehicle complex.”

Avinash Sharma, co-founder and CEO, ElectricPe further said, “The government's support to allow private sector players will lead to increased investments in the energy infrastructure sector, ultimately benefiting the end customer. Interoperability in battery-swapping and EV-only zones offer further incentives to switch to EVs.”

However, the industry stakeholders believe that an explicit statement of the extension of the FAME scheme and how it can support the expansion of the charging network was missing. However as Akshay Singhal of EV battery-tech firm Log9 Materials, emphasised, “It would be exciting to see some great climate focussed debt lines coming in from blended finance. Bringing EVs and batteries into priority lending sector was also expected but missed in this Budget.

Vivekananda Hallekere, CEO and co-founder, Bounce, believes that the "Government and policymakers have recognised battery swapping as the most effective solution to accelerate EV adoption in India by addressing range anxiety and hesitancy in adoption as well as considering the pragmatic aspects of setting up charging infrastructure – space constraints in urban areas for dedicated charging stations. We believe this move can enable affordable and clean mobility at scale.”