Swapping: A solution for India’s e-mobility - Hindustan Times
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Swapping: A solution for India’s e-mobility

Mar 13, 2024 02:51 PM IST

This article is authored by Dilip Harel Mitra Chenoy, advisor, IBSA, Tannaz Ahmed and Sutirtha Ghosh, IBSA secretariat.

The automotive industry is rapidly evolving in terms of technology and propulsion choice. There is a strong focus on minimising environmental impact. Two key factors driving this are, first, the country’s nationally determined contributions (NDCs) towards combating the climate crisis, and second, the goal of reducing the nation’s dependence on imported petroleum-based fuels. India’s transportation sector is undergoing a paradigm transition from fossil fuels to electric mobility.

Swap Point
Swap Point

Electric vehicles (EVs) have been introduced as part of a clean energy initiative, as they have low or zero emissions. EVs are becoming an integral part of original equipment manufacturers (OEMs)’ product mix and business strategies. Some OEMs are solely EV producers.

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India is all set to become a global electric mobility hub. With rising crude oil prices, EV sales have achieved an all-time high and are anticipated to rise further, with 1.5 million units sold in 2023, marking a 50% increase over the previous years.

The increase in the number of EVs has created a huge need for charging infrastructure. There is also a continuing emphasis on safety regulations and standards. The focus is on increasing charging infrastructure and reducing charge time at the same time addressing range anxiety of vehicle users.

Battery swapping, akin to petrol pumps for Internal Combustion Engine (ICE) vehicles, presents a unique opportunity, particularly for light vehicles like two-wheeler (2W) and three-wheeler (3W) vehicles in fleets and B2B applications.

While there is sustained push to promote the expansion of charging infrastructure, promoting the installation of charging points, there are multiple challenges to setting up charging stations at scale, both in rural and urban India. These include constraints of space and sufficient availability electricity in terms of load and the number of existing three phase connections.

Battery swapping is a good alternative as it can help address these specific challenges and more. Further, it has the potential to enhance the attractiveness of electric mobility by addressing both the initial cost of ownership compared to conventional vehicles and, importantly, the time taken to charge the vehicles and range anxiety of EVs.

India has witnessed a notable uptick in battery swapping stations, expanding their operational footprint annually. There are currently about 2,500 battery swap stations that the industry has installed pan-India for electric 2Ws and 3Ws, and vehicles running this technology have successfully completed 1.7 billion e-KMs. In the next five years, the industry is aiming to install 130,000 units of swap stations which can cater to the demand from 18 million units of 2W and 3W vehicles.

As the second largest 2W and largest 3W vehicles producer globally, India presents one of the largest target markets for battery swapping. Recent years have witnessed increased investors’ interests in this space. Going forward, as per industry estimates, the country will need at least 450,000 swapping stations to meet the demand arising from different vehicle segments, which would require an investment of more than $20 billion.

The Government of India has introduced a bouquet of incentives and subsidies aimed at driving the adoption of EVs and growing the associated infrastructure, like battery swapping and charging stations, which has resulted in significant uptake of EVs in the country.

As new policies are introduced, it will be appropriate that the government looks at fostering greater choice and allows all vehicle technology and charging methods to evolve. This will facilitate the development of technology and solutions for charging to emerge based on their efficiency, viability, market conditions, and consumer preferences.

In order to enable the EV industry to achieve self-sufficiency of the level that could match ICE vehicle manufacturers in India today, coordinated efforts by the Centre and states is needed. By incentivising manufacturers of electric vehicles, components, and charging/swapping infrastructure, many players will be drawn into the market with the prospects of long-term viability and significant future growth potential for electric vehicles in the country.

Although electric mobility is a relatively nascent market in India, there is an urgent requirement for its accelerated development and evolution in order to reduce costs, improve the range and decrease recharging time.

In August 2020, the ministry of road transport and highways (MoRTH) authorised the sale and registration of EVs without batteries, promoting the Battery as a Service (BaaS) model. This initiative was aimed at reducing production costs and, as a result, the retail price of EVs, potentially making them more attractive to consumers by alleviating the significant price disparity with conventional vehicles.

However, more than three years after this directive was issued, challenges persist, particularly with the registration of swappable battery vehicles at Regional Transport Offices (RTOs).

Since the time the government introduced the draft battery swapping policy in April 2022, there has been considerable progress and alignment of views between the vehicle manufacturers and the battery swapping industry and other stakeholders. At a recent meeting there was also agreement that the policy with a few modifications could be announced.

Given this consensus, it is imperative that the policy be brought in as soon as possible. This could even be a part of the 100-day agenda for the new government.

For the EV sector to flourish, it is crucial that the policies give equal emphasis to EVs with fixed and swappable batteries, thereby ensuring a fair competitive environment for all technologies. Whenever a new fuel choice technology is made available, there is need for an increased joint action between all stakeholders in the Centre and states to create the necessary momentum.

Union Budget 2024 highlighted the need to focus on “Strengthening e-vehicle ecosystem by supporting manufacturing and charging”. Charging infrastructure would naturally include battery swapping as well. Mainstreaming this through equivalent financial support can be one of the ways to boost EV penetration among 2Ws and 3Ws, by making it cheaper to buy EVs (without batteries).

With India having a goal to 100% conversion of 2Ws and 3Ws to electric by 2030, battery swapping is the way to expedite the adoption of EVs in India. A policy would align all stakeholders on the mission and would incentivise such a capital-intensive industry.

This article is authored by Dilip Harel Mitra Chenoy, advisor, IBSA, Tannaz Ahmed and Sutirtha Ghosh, IBSA secretariat.

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