Battery swapping for Indian EV market

We have seen the EV market booming with various new models over the last two years in India. These electric vehicle models are being offered not only by legacy automotive players but also by the start-ups that have made a good place in this mushrooming market. 

As per the recent Vaahan data, over 10 lakh EVs have been sold in the last 12 months, more than 85% of which are sold by the startups alone. The Indian market is the fifth largest automotive market in the world and ranks number one in the two-wheelers segment.

At present, the shift towards EV and percentage share of EVs in the entire automotive mix is very minuscule but we are bound to see exponential growth in EV adoption in the next five years in the country. We can attribute the growth of EVs to rising petrol, and diesel prices, lower OPEX of EV fuelling, packaging of smart features in EVs, and an increasing alignment among the public to adopt cleaner modes of transportation. This foreseen demand for EVs brings along the pressure to provision adequate charging infrastructure. India has the benefit of learning from infrastructure clubbed with different techno-business models implemented in various countries that have a high penetration of EVs at present. 

Governments in many countries have been focusing on provisioning good charging infrastructure to overcome the range anxiety associated with EVs without worrying about the economic viability of such infrastructure creation. All reports point to a common learning of lower utilisation of public charging infrastructure. More than 90% of times, the fuelling of EVs is a result of home charging in personal usage scenarios. The commercial EVs (cars in most  countries) seek either fast charging infrastructure or dedicated parking spots, but are not appreciated by commercial users because of the downtime it causes to their operations. We have also seen a rise in commercial vehicle usage, post-pandemic, across the globe. In India, the 2W delivery partners are doubling every six months. With such large adoption expected in the country for e-2W, the requirements for chargers, real estate for parking, anytime-every time electricity can not be adequate. An obvious refuelling option for the country is swapping for this segment. Among all forms of e-fueling options being looked at in the country, I strongly foresee a good trend emerging for the requirements that can be summed up below for the upcoming years.

Segment Use case Refuelling Infra Required:

HEV / MEV Commercials Usage - Public charging (100%)

MEV/LEV Personal Usage - Home charging (90%) + Public charging (10%)

LEV Commercials Usage - Swapping (80%) + Public charging (20%)

Since charging infrastructure has been there for more than a decade in other countries, there are no inhibitions for larger adoption of the same in India as well. The standards are largely in place, SOPs are defined, equipment is available, and we have sufficient manpower for managing infrastructure as well. However, when it comes to swapping, there are several pointers that need addressing including challenges in Business, technology, and Practices.

Who owns the Asset? 

This is the very first question that anyone asks if they start treating batteries in the vehicle as fuel. There has to be an operator (Battery as a Service – BaaS operator) who provides batteries as a service, much like we have oil companies providing petrol and diesel as fuel to ICE vehicles. For the BaaS operator to offer the services seamlessly, the solution requires a good automated swap station, smart trackable batteries integrated with the operator platform, and user apps to enable swap of discharged packs with a fully charged pack. The system needs to record each and every swapping transaction and ensure asset safety. The safety of assets (which for BaaS operators are the batteries) needs to be complied with in terms of technology for performance, safe operations and its trackability cum recovery for ensuring ROI / ROA. All these pieces are resolved in India now. We have interested parties to offer the swapping infrastructure being a BaaS operator, technology that enables smart swap operations and software for managing the swap operations.

There are certain challenges that remain open which primarily include standardisation of the Swap solution. Without standardisation in place, the selection of the type of connectors and communication to be used by the vehicle, batteries and the swapping stations remains a big challenge. The players who understand the benefit that swapping brings to the end clients and enables them to expand EV adoption through the commercial segment, are offering their proprietary solutions widely. Swapping solutions require adaptable and innovative approaches to cater to the larger beneficiaries. 

Swapping infrastructure under FAME subsidy 

Another important differentiation that has been lagging is the equal push to charging and swapping infrastructure under FAME subsidy. With such uniqueness of the 2W vehicle mix in India, we should have had an incentives policy for swapping as well. At this point in time, however, the subsidies are very limited for fixed battery vehicles. With effect from 1 June this year, the offered subsidies have been reduced on vehicles from 15k per kWh to 10k per kWh and subsidy restriction reduced from 40% to 15% of the total cost of the vehicle. Though this is too early to reduce the benefits for faster adoption, this will bring more vehicle numbers to be covered under the scheme for longer periods of time and would also give a market push to swapping solutions.

Dr. Prabhjot Kaur is the Co-founder of Esmito Solutions Pvt Limited. Views expressed are those of the author.