Business Insight

How Battery Swapping Policy Can Accelerate Country’s Electric Two And Three-Wheeler Adoption?

What is Battery Swapping?

Traditionally, EVs come with "fixed" batteries that can only charge using the power supply A reliable, affordable, accessible and reliable charging network is a prerequisite for mass adoption of EVs The alternative to battery swapping is the exchange of discharged batteries for fully charged ones It also allows you to charge them separately This removes the need to charge and maintains vehicle operation without any downtime This is a common method of swapping batteries for small vehicles like 2Ws and 3Ws. They have smaller batteries and are therefore easier to swap than 4Ws and e-buses

Battery swapping offers three key advantages relative to charging-timesaving, space-efficient, and cost-effective-provided each swappable battery is actively used Battery swapping also offers an opportunity to create sustainable business models such as 'Battery as a Service

Battery swapping offers three key advantages relative to charging- time-saving, space-efficient, and cost-effective provided each swappable battery is actively used Battery swapping is a way to open up new and sustainable business models like 'Battery as a Service’ (BaaS)

State governments must ensure that public charging stations are eligible to receive power tariffs at concessional rates

State governments must ensure that public charging stations are eligible to receive power tariffs at concessional rates

Ease registration of EVs with swappable battery packs or without batteries.

A unique identification number is assigned to swappable lithiumion batteries and battery charging stations

Swappable batteries in vehicles will be sold as-is, which provides potential EV owners the benefit of lower buying costs

Any individual or entity may set up a station to swap batteries at any location provided they adhere to the required technical, safety and performance standards.

Place battery swapping stations at public places such as retail fuel stations or public parking areas.

By the end of January 2023, the central government will likely have a battery-swapping strategy. It is expected that the policy will be based upon voluntary standardization norms for battery charging The battery-swapping policy announcement will remove any doubts in the sector It will also open the door for many national and global players to invest in EVs in a mix of fleet and battery as a business model (BaaS) The present swapping services come under 18% GST slab

The comprehensive battery swapping policy will accelerate EV adoption, thanks to the switching of batteries, particularly in the two and three-wheeler segments for urban mobility The electric twowheeler (E-2W) segment is India's most competitive in terms of EV adoption It has many advantages, including comfort, low cost ownership, fiscal incentive and ease of travel E2W & E-3W are the most popular and fastest adopters

Draft Battery Swapping Policy Key Proposal

Niti Aayog has released a draft battery swapping policy and has invited comments on it until June 5, 2022

Key Proposals Are

The tax rates for lithium ion batteries versus electric vehicle supply equipment should be reduced Current tax rates on lithium ion batteries and EV supply equipment are GST at 18% and 5% respectively

Give incentives to EVs that have fixed batteries to EVs that have swappable batteries

With the 100% allowed FDI in electric two wheeler manufacturing segment and proposed battery swapping policy, E2W and E3W segment is poised to see an exponential rise in adoption This likely trend will eventually help to achieve India’s ambitious 2030 vision of e-mobility (i e 70% of all commercial cars, 30% of private cars, 40% of buses, and 80% of two-wheeler (2W) and three-wheeler (3W) sales to be electric by 2030).