Context
The NITI Aayog has released a draft battery-swapping policy targeted at electric two- and three-wheelers as the government think tank aims to expedite large-scale adoption of EVs.
What is Battery Swapping?
- Battery swapping is a mechanism that involves exchanging discharged batteries for charged ones.
- This provides the flexibility to charge these batteries separately by de-linking charging and battery usage, and keeps the vehicle in operational mode with negligible downtime.
- Battery swapping is generally used for smaller vehicles such as two-wheelers and three-wheelers with smaller batteries that are easier to swap, compared to four-wheelers and e-buses, although solutions are emerging for these larger segments as well.
What is BaaS?
- Battery-as-a-service (BaaS) is seen as a viable charging alternative.
- Manufacturers can sell EVs in two forms: Vehicles with fixed or removable batteries and vehicles with batteries on lease.
- If you buy an electric scooter with battery leasing, you do not pay for the cost of the battery—that makes the initial acquisition almost 40% cheaper.
- Users can swap drained batteries for a fully charged one at a swap station. The depleted batteries are then charged on or off-site.
- The advantages of swapping include low downtimes for commercial fleets, reduced space requirements, and lower upfront costs.
- It is also a viable solution for those who don’t have parking spots at home.
Significance
- High Cost of EVs: An EV, by industry standards, is 1.5-2x costlier than IC Engine counterpart and at least half the cost is from the battery pack.
- Cost reduction: Many manufacturers are offering batteries separately from a vehicle, reducing the cost. In that case, a fleet owner can buy vehicles without batteries and utilize battery swapping.
- Range Anxiety: Another major reason stopping people from buying EVs is range anxiety, or in simple terms, the fear of the battery getting empty without finding a charging station.
- Inadequate charging infrastructure: Unlike petrol pumps, EV charging stations are rare to spot and that further increases the range anxiety exponentially, especially while going on a road trip.
- Hazard management: In case of a Swapping Station, one can simply locate a station, go and replace the empty battery with a new one.
Related Government Schemes
- The government had launched the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) scheme in 2015 to give a push to EVs and hybrid vehicles.
- Apart from that, it also approved the Production Linked Incentive (PLI) scheme for manufacturing Advanced Chemistry Cell (ACC) batteries in 2021.
- Another PLI Scheme, which also covers EV startups, was also approved for the automotive sector with a budgetary outlay.
