Battery Swapping Policy

Battery swapping is an alternative that includes exchanging discharged batteries for charged ones. This method removes the link between the vehicle and fuel or battery and thus leads to a decline in the direct cost of the vehicles this is widely applied for minor automobiles, such as 2 & 3 wheelers, which have smaller batteries that are simpler to switch associated to other motorized sectors wherever similar can be applied instinctively.

Policy in INDIA

Government think-tank NITI Aayog has prepared a draft policy for battery swapping, under which it has proposed offering incentives and subsidies to EV manufacturing companies, a new battery-as-a-service business model, and standards for coherent batteries, including other measures.

Finance Minister Nirmala Sitharaman had said that the formulation of an aspiring battery swapping policy in the Union Budget 2022-23 on 1 February. The Narendra Modi government is pushing for quicker adjustment of EVs and has set the target for electrifying all new vehicles by 2030.

What are some of the key proposals?

The planned policy indicates that the GST Council believes in reducing the variation around the tax rates on Lithium-ion batteries and electric vehicle supply equipment. Currently, the tax rate is 18 percent, and 5 percent respectively. The policy proposes to give incentives to electric vehicles that come up with a pre-equipped fixed battery to electric vehicles with swappable batteries. “The size of the incentive could be determined based on the kWh (kilowatt-hour) rating of the battery and compatible EV,” the draft policy states.

The policy also involves state governments to ensure public battery charging stations are suitable for EV power connections with concession on tariffs. It also recommends bringing stations under existing or future time-of-day (ToD) tariff rules, so that the swappable batteries can be charged in low intervals when electricity prices are low. Transport Departments and State Transport Authorities will be accountable for decreasing the development of vehicles sold with no batteries or for vehicles with battery swapping functionality.

The policy offers to designate a Unique Identification Number (UIN) to swappable batteries at the manufacturing stage to help track and monitor them. Likewise, the same will be assigned to each battery swapping station. The policy also proposed installing battery swapping stations at many locations such as petrol pumps, parking spaces, malls, Kirana shops, general stores, etc.

Is battery swapping a feasible resolution for e-mobility?

The global electric vehicle battery switching market was worth $100.1 million in 2020 and is expected to grow at a 24.4 percent CAGR to $852.6 million by 2030. COVID-19’s rapid spread has a substantial influence on the worldwide automobile sector, resulting in a drop in demand for both new and used vehicles. The present global economic conditions and market mood have a direct impact on important companies’ businesses. Despite the many hurdles that lay ahead, coronavirus has the potential to expedite certain positive developments. For example, due to the rise of different use cases such as last-mile deliveries, ride-hailing, and rentals, electrification is likely to expand in certain sectors such as two-wheel (2W) and three-wheel (3W) vehicles, and shared mobility may also increase.

The industry is expected to rise because of an increase in demand for electric vehicles, as well as a shortage of suitable public charging infrastructure and shorter charging times. However, the market expansion is hampered by differences in battery technology and design, as well as the expensive initial setup and operational costs of battery swapping stations. Furthermore, the quick rise of shared e-mobility and market competitors’ introduction of novel and improved battery swapping models and services are likely to provide profitable prospects for the electric vehicle battery swapping market growth throughout the forecasted period.

From a sustainability point of view, battery swapping has significant demand. Fast charging reduces the battery at a much faster rate, the lead to supplementary e-waste. With battery swapping, the batteries can be charged more slowly and efficiently and at a time that reduces demand on the grid. The charging stations would also extend the ability to help with grid load balance, as they can run as fixed space. The benefits to a battery swapping system are apparent – quick renewal of battery charge, assistance from domestic charging troubles, and reducing the direct cost of EVs, certain that battery rental will restore battery possession.

Bounce Infinity and Bharat Petroleum Corporation Limited have reached an agreement to put up battery switching facilities at BPCL fuel stations across the country. Bounce will begin installing battery-swapping facilities at Bharat Petroleum gasoline stations in Bengaluru, followed by other major metro cities throughout the nation. Customers with swappable batteries may use a smartphone app to find a Bounce swapping station, which will also give guidance to the station. Customers must then use the app to unlock a fully charged battery from the charging pod before making the transition. The battery replacement procedure normally takes three minutes.