Battery swapping policy: Some effective and favorable measures for EV adoption in India

India is ambitiously moving towards clean mobility and Electric Vehicles (EVs) are the key to bring about this transition. Government of India announced several initiatives including a Production Linked Incentive (PLI) Scheme for Rapid Adoption and Manufacturing of (FAME) I and II Schemes as well as National Program on Advanced Chemistry Cell in India (Hybrid and) Electric Vehicles is of.accBattery Storage (NPACC) for promotion of domestic manufacturing of batteries. Several other developed policies have been initiated by the Central and State Governments towards EV adoption in the country.

Typically, EVs come with ‘fixed’ batteries that are charged by plugging the vehicle into a charging point while the battery remains inside the vehicle. However, there is a need for a vast network of charging facilities to make EV operations smooth across India.

Another viable and highly beneficial option is the adoption of Battery Swapping Services (BSS) which is a faster, safer and more convenient alternative to charging. In India, a large number of electric vehicles are two and three wheelers with small, easy-to-replace batteries, making BSS more viable in the current scenario. The government recently introduced a draft battery swapping policy and interoperability standards aimed at building and optimizing the battery swapping ecosystem and paving the way for mass EV adoption in India.

The landmark initiative to introduce the policy and make the draft public for comments and suggestions, highlights India’s commitment to adopting electric mobility. However, there are some points that need to be reviewed and can be modified to create a policy that is impactful to consumers and EV industry stakeholders alike.

Compatibility and Interoperable Ecosystem

In the current draft, only UIN is mentioned without any talk on compatibility display procedure. This needs to be reconsidered and elaborated. When we talk about interoperable ecosystem, it means the physical transfer of assets from one ecosystem to another. However, even after the policy goes into effect, different ecosystems may continue to operate batteries with different chemistry and cell technology. There will be specific battery pack dimensions and the deployed charging infrastructure may support only a few specific battery packs offered by the particular ecosystem. What’s more, different batteries will naturally be at different stages of their lifecycle, and the economics of operation will play out accordingly. When interoperability between ecosystems is applied, this can lead to instances where an end-of-life battery is swapped with a new battery. Considering these challenges, interoperable ecosystem is not a viable option. With regard to the phased transition, battery providers have made significant investments in batteries and connectors even before any standardization measures have begun. Since ACC batteries have a very long life, this transition period must be very long. There should also be additional incentives and support for providers to transition to an interoperable ecosystem.

data sharing

Data is an important service differentiator. Each battery provider optimizes operations and financials based on battery asset data. Therefore, the right approach would be to determine if there is any specific data that the government considers important to enhance the customer experience. This should be submitted by the battery provider in a pre-determined format on a quarterly basis as a self-declaration and should be effective for the providers opting for inter-operability between the ecosystems. By sharing asset data, providers will lose their competitive edge over their competitors and this will discourage innovation in the industry.

business models

The intention to eliminate and avoid closed loops is well directed and will undoubtedly help increase EV adoption. The objective of the policy is to achieve standardization and compatibility of EVs, battery and charging infrastructure. However, interoperability between BSS ecosystems is not possible. There should be minimum mandatory data sharing by battery providers and only for the purpose of benefiting the end users. The need of the hour is to create a safe, reliable and compatible ecosystem with standardization that can help the industry and boost EV adoption in the country.

financial help

Standardization and different business models could mean that the battery would be compatible across different sets of EVs and could be cross used. Therefore, only the kWh rating should be taken into account as the basis for fiscal stimulus. There is also a need to create a level playing field and encourage early adopters. This can be done by ensuring that the financial benefits are passed on equitably to the existing batteries of the battery providers.

Grievance Redressal and Compensation

The given demand incentive is passed on to the end user right from the start through a reasonably low price. Thus, withdrawal of demand incentives is not financially viable. To draw a parallel line, in the FAME-II subsidy scenario, this EV is not refundable by the OEM, even if there is a complaint made by the owner. The introduction of such a clause would mean that battery owners would not be able to offer full incentives to end users and would be forced to reserve part of the incentives as a hedge against the risk of complaint and reversal of incentives. Thus, such clause would deprive the full benefit of incentives applicable to the end users.

Provision of land for public battery swapping stations at promotional rates

To ensure fair competition, land parcels should be shared in an open and transparent manner through a dedicated portal that is accessible to all battery providers. Further, to ensure equal opportunities for all players and provide diversity of options to the end users, it is suggested that any premises offered by the government or public sector entities should have at least 3 battery providers.

These are some of the key points which need to be reviewed as per the suggestions shared and it is expected that the draft Battery Swapping Policy be revised accordingly. This will ensure to protect the interests of consumers and service providers and pave the way for faster EV adoption in India!