The introduction of a battery swapping policy and the development of interoperability standards to support India’s electric vehicle (EV) ecosystem were two major announcements in this year’s budget. The Niti Aayog then released a draft for the battery-swapping policy in April 2022. Such encouragement for the growth of a battery swapping ecosystem is to be applauded. The development of battery-swapping infrastructure has received very little attention at the national level thus far, with the majority of attention being placed on building a vast network of EV charging stations.
The introduction and successful testing of battery swapping solutions offer the chance to promote a solution-neutral environment, level the playing field for competing for prospective solutions, and provide a range of options for EV users.
Five crucial factors should be taken into account in the policy
- First, given the infancy of our battery-swapping market, regulatory measures should encourage the gradual development of a swapping ecosystem that is correlated with the level of maturity of the EV market.
- The second requirement is that the policy adopts a targeted strategy by selecting priority vehicle segments and enables an expedited deployment of swapping solutions in those segments where battery swapping could be most advantageous.
- Third, the policy needs to strike a balance between promoting standardisation and innovation.
- Fourth, the policy should offer diverse technologies, solutions, and business models fair growth possibilities and allow the market to determine which of them will succeed.
- Fifth, the policy has to give different stakeholders, like state governments, the freedom to create battery-swapping ecosystem development plans that are most suited to their requirements.
Standardization and interoperability:
Identification of the things that can and cannot be standardised should come first in the approach to standardisation. The main advantage of standardisation is that it has the potential to change battery swapping from a current business-to-business (B2B) activity to a business-to-consumer (B2C) activity. This relates to simplicity of use and accessibility as well as a variety of alternatives for an EV user. Standardization, however, is a protracted process that needs agreement from numerous battery and automobile manufacturers.
Additionally, standardisation may hinder innovation by establishing impenetrable requirements. Therefore, standardisation must proceed cautiously, starting with the standardisation of some key elements of battery swapping. For instance, vendors are required to type test their solutions for fundamental aspects including verification of performance and safety functions and environment tests in Delhi’s most recent tender for charging and battery-swapping stations. Swapping norms also apply to safety in China. Institutional processes should be put in place to achieve agreement on battery pack specifications, connector standards, battery labeling, establishing minimum performance requirements, and grid communication.
Design of incentives:
The proposed policy suggests providing incentives for models of swappable vehicles. The policy will encourage vehicle and swapping operators to submit applications as a consortium in which incentives are distributed to the lead member for administrative ease. In the context of battery swapping, further research will be done on the effects of revenue-sharing recommendations, such as the 1/kWh recommendation given by the ministry of power in its recent guidelines on charging infrastructure. This is to ensure that the stations will maintain fully charged batteries in anticipation of demand, whereas fixed charging utilises energy only while vehicles are being charged.
Regulatory changes:
A reduction from 18% to 5% in the goods and services tax (GST) rate for lithium-ion batteries is suggested by the policy. The policy may provide an option where state EV funding and/or money from the FAME-II corpus are utilised to reimburse battery-swapping operators for this GST differential because this action falls under the authority of the GST Council. Additionally, while planning and designing public and semi-public infrastructure assets in urban areas, such as in city development plans, the policy should take battery-swapping stations into account.
Additionally, the policy should encourage states to create regulations for the safe transportation of batteries and offer suggestions for creating these regulations because battery charging and battery-swapping stations might be situated independently. The draught policy also suggests establishing a single window clearing system that issues trade licenses. However, the final regulation should be explicit about battery swapping’s status as a delicensed activity. The policy should specify the issuing authority and the procedure for issuing a trade license if one is necessary.
In India, where two- and three-wheelers account for more than 80% of all vehicles, battery changing may develop into a suitable use case. Therefore, for us to hasten India’s transition to e-mobility, a policy that facilitates battery swapping would be essential. At the same time, the strategy we choose should take into account the fact that India’s battery-swapping ecosystem is still in its infancy and avoid shackling different elements of the value chain to rigid rules.
In a nutshell, the way EVs are growing, the sales are rising, and it needs support from the charging infrastructure. But at the same time, lithium prices are going up which is making the battery more costly. So instead of owning the battery, renting the battery and using the swapping process makes more sense.
So before the EV industry collapse due to a lack of charging station, India needs to grow its Battery Swapping Network.
Want to know more about battery swapping, here are a few articles by All India EV for you
- Fast charging or battery swapping which one is better?
- How govt of India transforming the electric vehicles market with battery swapping solution?
- Challenges in Battery Swapping and how to counter them?
Content credit: Livemint
