Technologies used for battery swapping have not yet taken off in India and charging is preferred.
Finance Minister Nirmala Sitharaman announced during her Union Budget 2022-23 speech February 1, 2022 that the Centre intends to roll out a battery swapping policy. This push, along with the need for interoperability standards, can bring huge momentum to electric mobility adoption targets in India.
India has about 300 million vehicles across all segments. With electric vehicles (EV), there arises the need for enormous investment in infrastructure on building a sustainable ecosystem with an energy grid, charging network, energy operators, scrappage centers and battery re-mining.
Expansion of the sector also makes it imperative to evaluate if battery and vehicle reuse is more sustainable than scrappage. Therefore, with such a large number of vehicles, rapid vehicle growth and limited space to urbanise, accommodating large-scale transition becomes a challenge.
EV technology has improved dramatically and costs have been reduced. But India is still playing catch up globally in the segment.
EVs in India have grown at a compound annual growth rate of 133 per cent in 2015-2020. But in absolute terms, the size of electric vehicles penetration in India at present is very low — just about 1 per cent of total vehicles.
Two-wheelers have the largest market share: They account for 80 per cent of all vehicles sold and registered. About 95 per cent of EVs on road today are low-speed two-wheelers, but in absolute terms their contribution to emission reduction from trips is negligible. Hence, there remains a huge opportunity and need to scale penetration in order to champion the transition targets.
Battery cost currently constitutes about 40-70 per cent of the upfront cost for an electric vehicle. If decoupled and sold separately, it can help shift the upfront cost to the energy operator’s network — basically shifting the cost of ownership to operations.
Battery swapping and interoperability can hence be a solution to navigate this. It will allow building the vast network of the energy-operator supply chain to boost adoption, which in turn will impact faster transition.
Ten-point roadmap
Mobility solutions have two distinct agendas: Technology transition and mobility as a function. To move to the forefront of the clean energy transition, there has to be cohesion between the two agendas. And India needs an aggressive target with a fixed actionable roadmap guided by the following:
1. Standardisation of battery technology: Common battery architecture such as pack size, cavity, electric power control unit and output performance per unit will facilitate swapping. These act as catalysts for achieving economies of scale faster.
2. Battery Recycling: It is a huge opportunity for India to take centre-stage. Batteries being swapped can be built with recycling-friendly design to enable ease of repurposing. Recycling and manufacturing with recycled content will eliminate sourcing to an extent, and in turn, will positively impact the unit cost of vehicles.
3. Ensuring circular economy of vehicles: Without market evidence, EV battery disposal and vehicle resale remain a matter of concern. Scrappage policy 2021 provides for scrapping incentives on older Bharat Stage-II & BS-III vehicles only. A provision to link scrapping incentives to ensure BS-IV and BS-VI vehicles when surrendered are leveraged for EV conversion can do wonders. Manufacturer buy-back guarantee will also motivate users to deregister in exchange for cleaner vehicles, also facilitating manufacturing with recycled content.
4. Key financial enablers:
5. Faster uptake on battery-as-a-service (BaaS): Battery should be treated as a service segment like liquefied petroleum gas, or other functional batteries.Incentives to battery-unit should be extended to subsidise per-kilometre operations rather than purchase cost. Additionally, gross-cost financing models, along with standard-operating-procedure for energy-operators can be explored for financially viable solutions.
6. Subscription model for end-users reliability: BaaS can be available to users (both private and commercial) at a subscription model to eliminate anticipation and boost confidence on availability.
7. Corporate Available Fuel Economy (CAFE): CAFE norms should be amended to 95-100 grams carbon dioxide per kilometre to push original equipment manufacturer and prioritise zero-emissions vehicles to avail benefits of industry credit system.
8. Shared mobility and aggregator: It includes vehicles associated with aggregators such as Ola, Uber, Zomato, Amazon, Delhivery, among others. The government is rightfully prioritising this segment which provides great visibility and a large user-base. It can influence more than numbers, and will inadvertently reduce technology anxiety amongst users and financing institutions.
This category relies on different ‘degrees of freedom’ of public transport operations and so, appeals to various socioeconomic strata. It provides convenience to some and affordability to others.
This segment accounts for a larger share of trips generated in our cities, is the backbone of the localised logistic distribution network of cities and yet is unorganised. With policy vision and roadmap, this segment can be radical for India’s energy transition.
9. Building co-reliance: Identifying value-chain propositions for users, drivers, energy operators, urban local bodies and financing institutions is important. Resource planning for one city at a time for localised EV-ecosystem. Inventory of existing modes, land infrastructure, parking spaces, private and public spaces for charging infrastructure, and EO network in cities to build a cohesive system
10. Leverage intelligent transport systems technology to enable efficiency: Deploying digital applications by using databases that enable human-to-machine and machine-to-machine interface, improve accessibility to energy, maximise utilisation, increase traction as well as ensure efficient operations, safety detection, seamless delivery and improved convenience in the ecosystem.
Technologies used for battery swapping have not yet taken off in India and charging is preferred. It is, however, a viable alternative to fueling automobiles in the post-transition phase.
Swappable batteries can not only be compact in size but eliminate anxiety about range and availability. If successful, it will mirror the existing network of fuelling stations to facilitate seamless operations.
Private sector investment can be leveraged for operations of the supply chain networks and sustenance of energy operators. In this case, battery swapping and network of energy operators become a service segment. Operations will largely rely on availability and access to this energy grid.
It is important to establish sustainable business models that can indeed be leveraged to shift this upfront cost to the cost of operating an EV.
As many as 13 of our states have notified an EV policy and about eight draft policies, aligning to some extent with the national target of achieving 30 per cent EV sales penetration by 2030.
There needs to be a synergy of policy action roadmap for faster adoption. The questions that still remain are how much, how fast and how efficient?
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