How government is promoting battery swapping in India

Battery Swapping is important for the growth of electric vehicles in India

Electric Vehicles are costly, day by day the rising global inflation is adding up and making EVs more expensive. Manufacturers of EVs and their components have been working to lower the cost, simplify charging, and increase the viability of EVs to increase demand. But this scenario can easily be changed by Battery Swapping.

According to reports, batteries account for 40% to 50% of the cost of an EV. By switching to EVs without batteries, this expense is decreased, making EVs more accessible to consumers. Battery swapping is a notable solution for India’s lack of rapid development of charging infrastructure, in addition to making it more affordable. 

To properly execute battery swapping services, several tactics have been employed in different jurisdictions. This article compares the strategies and analyses the important elements of the draught battery swapping policy (“Policy”) that Niti Aayog announced on April 20, 2022.

The GoI and state governments have also implemented additional policies, incentives, and programs to support the development of a full battery swapping ecosystem in India to spur prospective investment and widespread adoption.

Let’s have a look at the markets of the U.S., Japan, and China in the context of Battery Swapping.

China: China is still in the early phases of battery swapping compared to other parts of the world. On October 20, 2020, China’s State Council released the New Energy Vehicle Industry Development Plan (2021–2035) to ensure the industry’s expansion (the “Plan”).
A fast-charging public charging network will be established, according to the Chinese government, as part of the Plan. Additionally, it provides financial support to businesses involved in charging station construction. Battery-swapping businesses like Nio and Aulton New Energy have set up 1,400 battery-swap stations globally and want to grow that number to 26,000 by 2025.

Japan: By the year 2050, Japan wants to be carbon neutral. It aims to be completely electrified by 2035. Original Equipment Manufacturers (“OEMs”) in Japan have teamed up to form Gachaco Inc. to guarantee that swappable battery are manufactured following the same standards and that effective battery replacement systems are in place. These OEMs include ENEOS Holdings, Honda Motor, Kawasaki Motors, Suzuki Motor, and Yamaha Motor.
To provide the battery swapping service to electric 2W consumers, the newly created company will build the necessary battery as a service (“Baas”) platform infrastructure,12 removing one of the frequent obstacles to the country’s widespread adoption of EVs. The objective is to create batteries that may be utilized in Two-Wheelers (“2Ws”) produced by.

United States: In 2013, one of the largest EV manufacturers in the world, Tesla, installed swapping stations in the US. The company had to shut down the exchanging stations after a few years due to low-cost recovery. This led to the introduction of superchargers which would lessen the otherwise high downtime for EVs. However, there has recently been a huge increase in demand for battery changes in the US. Battery modules that can accommodate battery packs from various cars and inexpensive switching stations have been created by Ample, a start-up with U.S. headquarters in California that develops battery swapping technology. Batteries that can handle a variety of vehicles reduce the need for an OEM-maintained standard battery pack while delivering 2Ws, ensuring that.

As seen, several nations have employed various commercial models for battery swapping to address the prevailing shortcomings in the EV landscape. The GoI has joined other governments in pushing a switch to battery swapping with the publication of the Policy. State governments should support this initiative, even more, to ensure that electric two- and three-wheelers (“3Ws”) are more widely used in India.
BaaS (Battery-as-a-Service) was introduced as a new business model to expedite sustainable mobility solutions during the 2022–23 budget announcement by Indian Finance Minister Mrs. Nirmala Sitharaman. By providing a recharging facility similar to the one found at airports, this approach seeks to resolve the space constraint experienced in installing charging stations in urban locations.

Principal Elements of the Policy to bolster the EV industry and accelerate widespread EV adoption, the GoI had already announced the establishment of the Policy in its union budget for the fiscal year 2022–2023 Additionally, the policy would make it possible to recognize “energy” or “battery” as a service, aid in the expansion of the EV infrastructure, and promote the use of EVs in public transit. It is important to note that the Policy emphasizes 2Ws, 3Ws, and light electric power trains (“LEV”) among lightweight category vehicles, as well as E-rickshaws and parts, and is designed to encourage the replacement of batteries with Advanced Chemistry Cells (“ACC”), thereby lowering the cost of batteries.

These are the main goals of this policy:

  • Providing EV users more freedom by creating battery swapping as an alternative to time-consuming charging facilities;
  • Establishing the technical principles, standards, and procedures necessary to enable interoperability throughout the ecosystem for battery swapping;
  • Addressing the financial and regulatory obstacles that manufacturers and/or service providers confront; fostering collaboration between different market participants, such as battery suppliers, battery OEMs, EV OEMs, banking institutions, etc. to create an ecosystem that can offer integrated services to the public;
  • Ensuring improved battery lifetime management, which includes maximizing utilization and recycling.

This policy is in effect from the day it was made public until March 31, 2025, after which the Ministry of Power (“MOP”) is empowered to examine, update, and prolong its effectiveness.

Details of a few of the major components of the Policy are provided below:

Technical and operational standards for batteries

  • Technical and performance standards to be approved/adopted by concerned agencies to ensure safe operations and flexibility in operating with different battery types;
  • Battery Management System (BMS) will be enabled in all ACC batteries;
  • Batteries to be equipped with advanced features like IoT-based monitoring system, remote monitoring, etc.;
  • Additional standards and specifications for batteries to be notified later to support a phased manner transition to battery swapping;
  • A Unique Identification Number (UIN) to be assigned to batteries and battery swapping stations;
  • Batteries to be tested as per Automotive Industry Standards 156 and 036, testing protocols, and relevant regulatory standards;
  • OEMs to seek approval from the Automotive Research Association of India (ARAI) to accept interoperable swappable batteries. 

Standards for Battery charging and swapping infrastructure

  • MOP to develop and approve the standards for battery charging and battery swapping stations;
  • Electric Vehicle Supply Equipment (EVSE) used at swapping stations should be tested and certified by National Accreditation Board for Testing and Calibration Laboratories (NABL) or an agency appointed by the central nodal agency for battery swapping;
  • Charging infrastructure for electric vehicles – guidelines and standards released by MoP in 2022 to be followed;
  • Guidelines and protocols issued by Central Electricity Authority are to be followed. 

Data Sharing

  • Emphasis on data sharing agreements among major battery providers;
  • A non-restrictive guideline concerning classification and usage of collected data will be developed;
  • Information about the type of batteries available for swapping, use of swapping mechanism, the performance of batteries, etc. will be provided by battery providers to the customers in a standard format. 

Battery as a Service (Baas) Model

  • Users will purchase EVs without batteries and shall acquire batteries on a subscription basis;
  • Battery providers may work with battery OEMs to develop batteries and operate swapping stations;
  • Multiple distinct solutions from relevant market players to be taken into consideration for maintaining technical and operational standards;
  • Ecosystems to be open to other market players to foster flexibility and choice for EV users;
  • Users are allowed to detach swappable batteries and charge them elsewhere using appropriate measures. 

Direct Financial Support

  • Existing incentives for EV purchase to be extended to batteries covered under this Policy;
  • MOP to produce a mechanism for disbursement of subsidies,
  • Battery providers to receive subsidies, provided they meet the technical and operational requirements under this Policy;
  • Subsidies to be linked with UIN of EVs to avoid double-dipping;
  • Scheme to specify the minimum duration of the contract to be signed by EV users and battery providers;
  • State governments to provide additional financial aid in the form of subsidies. 

Indirect Financial Support

  • Electricity consumed by swapping stations to be charged under a time-of-day tariff regime to reduce operating expenditure;
  • Public entities and governments (both GoI and state governments) to provide land for establishing swapping/charging stations on a revenue-sharing basis;
  • State governments to ensure power supply to swapping stations at concessional rates;
  • Goods and Services Tax (GST) may at a future date reduce tax rates. 

Implementation in Phased Manner Swapping 

Swapping stations to be set up in urban areas in the following phases:

  • Phase I (1st and 2nd year): All metropolitan cities with a population greater than 4 million;
  • Phase II (2nd and 3rd year): All major cities with populations greater than 0.5 million.

Nodal agencies responsible for the rollout of Battery Swapping Stations

  • Central Nodal Agency – a rollout of EV charging infrastructure;
  • States and Union territories – implementation and governance of the entire ecosystem;
  • Transport departments – easing registration process;
  • Municipal Corporations – land allocation permission;
  • Energy department – supply of power;
  • State electricity regulatory commissions – concessional tariff rates for electricity supply.

Re-use and Re-cycling of Batteries

  • Regulation on minimum battery performance and durability requirements;
  • Standards for re-use of batteries to be developed;
  • Battery providers to be encouraged to develop a power bank using swappable batteries after their end-of-life;
  • Improper disposal of batteries in landfills or scrap is prohibited;
  • Battery management rules to be notified concerning end-of-life handling of batteries;
  • Collection and re-processing of batteries will be tracked as per provisions of Draft Battery Waste Management Rules, 2020. 

Single Window Portal

  • A single window portal to be set up by concerned authorities to facilitate submission of all required documents, issue trade licenses, approve the allocation of public land, and grant electricity supply connections for battery swapping business. 

Grievance Resolution

  • On behalf of the ecosystem, battery providers will be the primary point of contact between the players in the battery swapping ecosystem and will be responsible for channeling monetary compensation to EV owners in case of grievances. The Policy is silent on the types of grievances covered. Any of the relevant market players can be liable to pay compensation. Battery providers are merely a medium for addressing and facilitating grievances raised by customers.


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