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How Can India Lead the Change in Battery Swapping for Electric Vehicles?

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In the Union Budget of 2022-23, Finance Minister, Nirmala Sitharaman announced that the Central Government has plans to start a battery swapping policy. This move by the government will give the much-needed impetus to fulfil targets for electrical mobility adoption in the country along with the interoperability criteria.

Electrical vehicles are gaining popularity in the country as there is an awareness to reduce pollution levels and switch to more sustainable modes of transport. This awareness is much needed for the environment and makes a difference for the next generation. The government takes regular measures to ensure safety on the road and for the environment. two wheeler insurance is mandatory for any vehicle plying on the road. Now the government is making policies to make the usage of electrical vehicles easier for the users.

India as a country has many vehicle users and as the need for electrical vehicles is increasing, there is also an increase in the demand for a sustainable and more efficient ecosystem with a strong charging network, battery re-mining, energy grid, etc. Batteries are one of the biggest sources of electronic waste today and as per reports by 2030, more than 12 million tonnes of batteries of lithium-ion are expected to retire. To add to this figure, about 40-70% of the cost of an electrical car is the battery cost. If these are sold separately, it will help in reducing the initial cost as this cost will shift to operations.

These steps are needed to reduce costs and thus, increase the usage and penetration of electrical vehicles which are definitely a more sustainable option for the future. One of the main areas of focus for the same is battery swapping.

Battery Swapping

Battery swapping is a technology that will make it easy for users to operate electrical vehicles and of course more economical. As the name suggests, this will give the user to swap the battery and move rather than waiting to charge it at stations. For this purpose, a swapping station will be set up where many batteries will be getting charged at the same time. So a user can go to one of these stations, change their battery, take a charged one, and put the depleting one on charge. This will take care of the charging time and thus, also reduce the requirement for charging stations. This will also reduce the cost of buying a battery and thus, making the vehicle cheaper. India due to its vast population has the capacity to lead the change and promote battery swapping.

7 Step process to set up a system of battery swapping:

The following are some of the steps that can be taken to set up a system of battery swapping that will assist in changing the ecosystem.

1. Recycle EV Batteries

India has a huge opportunity to take the benefit from recycling batteries. If the batteries are built with a design that is recycle-friendly, battery swapping will help in repurposing these batteries. The cost of the vehicles will really come down if the batteries are manufactured and recycled using material that is easily recyclable.

2. Using Standard Technology

One of the easiest and most sustainable ways to approach the scheme of battery swapping is to ensure that the batteries are made in a standardized manner. Batteries will be easier to swap if they are made in a standardized manner with standard features of the cavity, size, output performance, control unit, etc. With standard technology not only will battery swapping become easier but the manufacturing companies will achieve economies of scale and be able to earn more profits.

3. Battery as a Service

Insurance is a mandatory product and thus, two wheeler insurance is mandatory for all vehicle owners. However, it is not very expensive and a basic insurance policy does not pinch anyone. But batteries as a product are expensive and thus, it might make sense to treat them like a service. Like petrol and fuel are treated as services, batteries also need to get the same treatment. Rather than focusing on the cost of purchasing, efforts need to be made to reduce per-kilometre operating costs for battery units. As the need of the hour is to find financially viable solutions, standard procedures for operations and gross cost models of financing will help.

4. Subscription Model

When batteries will be made as a service rather than a product, offering a subscription of the same will help as well. There is a requirement to boost confidence and gain the trust of the consumers and with a subscription model, the same can be achieved.

5. Using Digital Applications

Digitalization and the use of technology are key to achieving success in any field. When digital applications are used with a database to improve the interface, it will greatly benefit battery swapping. With these apps and intelligence systems, the usage of battery swapping stations, efficiency in operations, traction, delivery, safety detection, and more convenience can be ensured which will help gain the confidence of the customer and achieve more efficiency.

6. Financial Enablers

There are some things that can be done from a financial angle to ensure that battery swapping is good for the manufacturer and the user. The first thing that can be done is to reduce the GST on batteries. This will reduce the cost of energy operators. Utilization and access can be improved when charging infrastructure are decoupled from battery swapping. Another aspect that can be looked into is standardizing the cost of batteries as this will help bring parity in the operation cost throughout the country.

7. Co-Reliance

For swapping of batteries for electrical vehicles there needs to be a value chain identified for the drivers, users, local bodies, energy operators and financing institutions. Building a co-resilient infrastructure is vital where the big manufacturers of EVs and also the startups work on the land infrastructure, existing stock of battery models which are available, charging space, parking space, etc. This system will make it easier for all parties to work on the battery swapping model and make it a success.

Conclusion

Electrical vehicles are extensively being used all over the world but data shows these are more expensive. The high cost of EVs can be attributed to the battery. As of now, two wheeler insurance is the same for both electrical and fuel vehicles, but there might be a change in the features as separate coverage is needed for EVs.

To make the EVs more affordable, many manufacturers are giving the option to get the vehicles without the battery and for such people, the concept of battery swapping is perfect, as this will bring down the cost of purchase of the vehicle. When it comes to charging the battery, the two main concerns are the availability of charging stations and the time taken to charge a vehicle. With the concept of battery swapping and the availability of stations to do the same, it will become much more convenient for users to swap a battery and move on.

The government is planning various things to make battery swapping a success and ensure India is a leader in this sphere. There are many advantages of battery swapping for all parties, be it the manufacturer and the end-user and thus, it is imperative to set up a business model which is sustainable and successful and will reduce the cost of buying the electrical vehicle and focus on operating costs.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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