The Union Budget for 2022-23, proposed on 1st February, Tuesday, has raised high curiosity amongst the EV stakeholders and enthusiasts, propelling a huge momentum to the EV ecosystem. The Finance Minister of India, Nirmala Sitharaman, has announced the battery swapping policy with a vision to accelerate clean & sustainable mobility solutions and encourage faster EV adoption.
These EV policies will resolve the space constraint in the urban areas for setting up EV charging infrastructure and the fear of running out of charge for the drivers. With the ‘Battery Swapping Policy,’ EV owners can now replace their discharged batteries with fully charged ones within a few minutes by paying a nominal charge fee, similar to refueling in an IC engine vehicle.
This will facilitate interoperability within the EV ecosystem. Different manufacturers can now provide batteries that will be compatible with electric vehicles in the market.
Looking at the bigger picture, this will be a win-win situation for EV owners, manufacturers, and dealers. The whole concept is completely going to transform the EV battery game by transitioning from the battery as a product to the battery as a service.
Battery-as-a-Service (BaaS) and its Benefits?
A driver need not worry about finding an EV charging station nearby or the upfront costs associated at the time of buying. They can buy an EV without a battery which will save up to 30-50% expense, shifting the whole objective from a capital cost to an operational cost.
Through BaaS (Battery-as-a-Service), a customer in Gujarat can buy an electric scooter under 36,000 INR and 45,000 INR for other states in India. Moreover, this has widened the room for battery pack and battery management system manufacturers to produce more versions compatible with different EV models.
As per the report from BBC, the Indian government has been propelling faster EV adoption and planning to scale up manufacturing by 2030 for private cars to 30 percent, commercial vehicles to 70 percent, buses to 40 percent, and two- and three-wheelers to 80 percent.
This rapid adoption can cut almost 1 Gigaton of CO2 emissions by 2030.
The recent partnership between Reliance Industries and Mahindra group focuses on boosting the adoption of high-performance EVs and battery swapping, which will alleviate the user’s range anxiety.
Rajeev Singh, automotive lead at Deloitte India, states that this major policy announcement can be a game-changer for startups already in this sphere. Also, it can assist fleet electrification in achieving last-mile connectivity.
However, the road seems to be quite demanding since there is a major gap in the standardization of the battery design and the lack of compatibility assessment. Other challenges involve automating such swapping stations, which can cost around 10x more than setting up an EV charging infrastructure, as mentioned in Bloomberg’s recent article.