India’s proposed battery swap scheme

EV Market in India
India's automotive industry is dominated by two-wheelers (scooters, motorcycles) and three-wheelers (autos and rickshaws), which play a vital part in last-mile mobility. Electric Vehicles (EVs) have witnessed healthy growth, as consumers are seeking affordable eco-friendly transportation supported by government incentives. About 3,39,190 EVs were sold in 2021, up 168% from the 1,22,607 units sold last year. The Indian EV market is still in its infancy but expected to advance at a CAGR of 90% from 2021 to 2030. The market, on the other hand, is fast expanding and is predicted to grow in value. By 2030, India's transition to shared, electrified and connected mobility could save roughly one gigatonne of carbon dioxide emissions.

As these vehicles run on batteries, they do not require fossil fuel, making EVs a sustainable and environment-friendly alternative. The lack of public charging infrastructure is a major impediment to their large-scale adoption. To overcome this challenge, India needs a strong backbone for charging infrastructure that spans the length and breadth of the country while taking traffic and population density into account. Hence, Niti Aayog plans to introduce a 'battery swapping policy’ that would lower the upfront cost and accelerate EV adoption.

Charging Infrastructure
Infrastructure for EVs include charging infrastructure, battery switching stations and enterprises focused on traction batteries. Services in the battery market could significantly boost the adoption of EVs, as batteries account for approximately 40% of the total cost of an EV. The following are some battery-related services/processes that can help customers reduce the overall cost of owning an EV:

• Battery Recycling: Growth in the EV sector may lead to increased demand for the rare elements. However, as supply is concentrated in just a few countries, supply chain concerns may occur, making battery recycling the only viable option. Recycling can reduce the environmental impact as well as the overall cost of a battery (and thus the cost of an EV). Gravita India is one such company that is actively involved in sustainable battery recycling.
• Battery Subscription: Battery subscription refers to the provision of batteries to vehicle operators on a subscription basis, with charges based on daily or per kilometre usage. Setting up a battery subscription business would decrease the upfront cost of EVs, addressing the greatest impediment for most buyers.
• Battery-as-a-Service (BaaS): BaaS adopts a circular economy concept to enhance asset usage while connecting the transportation and energy sectors. End users, such as car owners and energy storage projects, lease newly manufactured batteries for use. When a battery approaches its end of life, the BaaS service provider refurbishes the battery and makes it acceptable for purposes such as energy storage or behind-the-meter consumption, or recycles it by removing the raw material and using it to build new batteries. Sun Mobility and Esmito are considered the leaders for BaaS.

The Indian government focused on existing charging infrastructure gaps in order to save money and allay customer concerns about the EV range. Consequently, the government came up with a battery switching system with interoperability standards that will be deployed in the near term.

What is Battery Swapping Policy?
EV drivers may opt for battery swapping to replace exhausted battery blocks with freshly charged ones at swap stations. This is faster than charging the vehicle and relieves drivers of range anxiety. Minister of Finance and Corporate Affairs Ms. Nirmala Sitharaman said, while presenting the Union Budget 2022, that a battery swapping policy for electric car charging in constrained spaces will be drafted soon. The government plans to finalise incentives for EVs under its new battery exchange scheme within the next two months. Some of the features expected to be included in the policy are as follows:

• To encourage industries such as last-mile delivery and ride sharing, the policy will initially focus on battery swap services for electric scooters, motorcycles and auto rickshaws.
• India has set aside US$ 1.3 billion in 2019 to encourage EVs by providing direct incentives to purchasers. This cash will be most likely used to provide incentives for battery changing.
• The proposed regulation will promote disruptive business models such as BaaS and leasing. Customers of electric two- and three-wheelers would not need to buy batteries, which account for around 50% of the overall vehicle cost.
• Private players will be encouraged to create innovative and sustainable business models for Battery or Energy as a Service.
• As standardisation of batteries is crucial, electric car makers will be urged to build vehicles that can utilise swappable batteries.

Key Entities
The government saw a need for a dedicated multi-disciplinary mission to be established in order to promote cooperative federalism, comprehensive stakeholder and inter-ministerial discussions, and implementation of an end-to-end policy framework for reforming the mobility landscape. The CEO of Niti Aayog, Mr. Amitabh Kant, chairs the multi-disciplinary National Mission on Transformative Mobility and Battery Storage, which has an Inter-Ministerial Steering Committee. Secretaries from the Ministry of Road Transport and Highways; the Ministry of New and Renewable Energy; the Departments of Science and Technology, Heavy Industry, and Promotion of Industry and Internal Trade; the Ministry of Power; and the Director-General of the Bureau of Industrial Standards make up the Steering Committee.

Initiatives for EV sectors are as follows:

Road Ahead
Battery swapping is still in its infancy throughout the world. However, it is gaining traction, particularly in commercial and fleet operations, and India is poised to lead the way with its new regulation. Energy service providers and OEMs have urged the government to strike a balance between standardisation and innovation to enable the development of new technologies and business models in this policy. Range requirements, safety regulations, performance evaluation and battery life are likely to be outlined in the policy. Mobility solutions that are shared, linked and clean are gradually becoming the main principles of effective mobility solutions worldwide. India is deploying successful tactics to position itself as a key driver of the global mobility revolution, given its commitment to achieving climate objectives.