The government is frequently seen as one of the most important enablers in assisting a country’s adoption of new technology. This time, the focus appears to be on assisting in the adoption of electric vehicles (EVs) throughout the country through a soon-to-be-announced EV battery swapping policy. The technology is green, which simply implies that it is healthy for the environment as well as for end-users wallets. The nice aspect is that this drive coincides with several business opportunities.
- The central government has stated that EV battery swapping policy will be implemented within four months. The policy’s goal is to hasten India’s adoption of electric vehicles.
- Heavyweights like Tesla have shown out battery-swapping technologies in the past, but none of it has yet been commercialized.
- OEMs/brands may be hesitant to share their battery technology, battery management system, or software with other manufacturers for fear of losing their competitive advantage.
The prospects are in the billions of millions, whether it’s designing hardware, developing software, appointing new dealers or service channels, or simply acquiring the raw materials needed.
According to recent research by Avendus Capital, electric vehicles in India might be worth INR 5000 crore by 2025.
EVs have shown to be a rising category, even though mass adoption is still a long way off. India sold 311,339 electric vehicles in 2021, more than double the 119,654 sold in 2020.
One of the pushing drivers for EV uptake has been the central government’s Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme (FAME 1 and FAME 2). Furthermore, each state in India has implemented its EV policies. However, since India’s finance minister Nirmala Sitharaman hinted at it during her budget speech for 2022-23, the yet-to-be-launched battery swapping program has become the talk of the town.
The policy, according to the Finance Minister, would push the private sector to develop creative and sustainable battery solutions, which will improve the efficiency of the EV ecosystem.
Drivers and consumers of electric vehicles can swap their depleted batteries for fully charged ones at a swap station, as the name suggests. The government hopes that this would help to alleviate the issue of range anxiety and accelerate the adoption of electric vehicles.
Will Indian Consumers adopt battery swapping or fast charging?
Although Western countries are frequently seen as early adopters of new technologies, the concept of battery swapping has yet to gain traction in the United States or Europe.
As early as 2013, Tesla demonstrated a battery swapping technology. The business claimed that the technology could switch batteries in as little as 90 seconds. Even in 2022, the corporation does not provide this service in any of its markets. On the other hand, Nio, a Chinese electric vehicle manufacturer, has already deployed over 700 battery swap stations across the country.
While both Tesla and Nio produce electric vehicles, two-wheelers and three-wheelers are seeing greater popularity in India. During the period April 2021 to November 2021, JMK Research believes that roughly 1.37 lakh units of high-speed electric two-wheelers were sold, followed by electric three-wheeler sales, and finally electric autos.
As we progress beyond three-wheelers, battery switching becomes less viable since the cost of putting up battery swap systems for four-wheelers and larger commercial vehicles will skyrocket. Because the battery packs utilized in such vehicles are heavier, success may necessitate the usage of robotics with a dash of automation.
It’s worth noting that batteries account for around 40% of the cost of an electric vehicle. Swapping stations can assist OEMs in lowering costs for both consumers and themselves in the long run. An electric vehicle that costs INR 1 lakh has batteries that cost Rs 40,000.
However, if brands and OEMs do not include the cost of fixed batteries upfront, the total cost of ownership will be lower. They can use a battery-as-a-service concept or switch instead of fixed batteries. “Once the subsidies are removed and we start selling EVs without batteries, the cost is virtually the same as it is now with fixed batteries,” Tomar explained, stressing that switching does not increase end-user costs.
If we see the total electric vehicles from the top 5 companies including Hero Electric, Okinawa, Ather, Ampere and PURE, its close to 1,15,000 units but non of them have the battery swapping feature.
The battery swapping strategy, according to the originator, may not work in the Indian market due to the high CAPEX. Furthermore, due to the complexity needed, building a robotic system to swap the batteries is not feasible for a startup.
Data Sharing & Standardisation
Each city will need at least 80,000 to 1 lakh electric vehicles from the same manufacturer or with suitable batteries to make battery swapping practical and economically sustainable, according to Singhal. Consider the issue in terms of printer cartridge replacement. Cartridges come in a variety of forms and sizes, depending on the maker.
This might pose a significant difficulty for brands and OEMs, as they would be required to follow standardized battery manufacturing forms, while EV battery standardization in the country has yet to take place.
The other approach is to compel standardization, but the issue is that brands and OEMs employ battery technology to set themselves apart from the competition. If all-electric vehicles have the same range and battery capacity, the competition boils down to pricing. Isn’t it true that OEMs and brands would lose a significant portion of their competitive advantage?
International corporations are building consortiums to standardize electric vehicle battery manufacture, but no such consortiums are being formed in India.
Even if battery packs were to be standardized, OEMs would be hesitant to give third parties access to data from their BMS and battery packs. Hackers and data miners will be able to exploit the connection of battery switch stations to monitor charging status.
Consumers may observe lesser mileage as battery capacity decreases, and there are no promises that a fully charged battery switched into the car would last as long as the previous battery.
Pros and Cons of Battery Swapping
To Swap Or Not To Swap?
When it comes to battery switching, the opportunity for EV businesses could be in battery-as-a-service business models, which could range from monthly, yearly, or daily memberships. It’s also unclear whether manufacturers and OEMs would coordinate and work on the same sort of battery to support the impending battery switching regulation.
The terms and conditions of the yet-to-be-released battery swap program will be crucial in this situation. Mr. Reddy, Eride’s CEO, feels that no OEM would wish to share their technology with others to create a universally interchangeable technology like batteries. This system will not move forward unless the government insists on all EV manufacturers using the same battery design and setting battery specifications.
Battery swapping promises a two-minute range extension for an electric vehicle, but it will have OEMs and brands answering problems about standardization, data sharing, and other issues. EV fast-charging stations, on the other hand, have begun to give up to 80% of battery recharges in 10 to 15 minutes. Because just charging standards must be synchronized, not the entire BMS or battery maker, fast charging has essentially answered problems about battery compatibility.
In all likelihood, the government will promote both fast charging and swapping, leaving it up to the market to decide which of the two will win out.
So this was all about the on going debate in the Indian EV market regarding the adoption of Battery Swapping V/S Fast Charging. What do you think about is debate, share your thoughts with us.
The content of this article is taken from INC24
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