EV Battery Swapping Policy

Q. Why is this in news?

A. NITI Aayog is holding a consultation on the upcoming electric vehicle (EV) battery swapping policy.

Q. What is BaaS?

A.

• Battery-as-a-service (BaaS) is seen as a viable charging alternative.
• Manufacturers can sell EVs in two forms: Vehicles with fixed or removable batteries and vehicles with batteries on lease.
• If you buy an electric scooter with battery leasing, you do not pay for the cost of the battery—that makes the initial acquisition almost 40% cheaper.
• Users can swap drained batteries for a fully charged one at a swap station. The depleted batteries are then charged on or off-site.
• The advantages of swapping include low downtimes for commercial fleets, reduced space requirements, and lower upfront costs.
• It is also a viable solution for those who don’t have parking spots at home.

Q. What is battery interoperability?

A.

• That’s when a battery is compatible across vehicles and chargers, so you can seamlessly swap a battery at any swap station. This can help achieve scale.
• However, manufacturer and service providers say there are safety concerns around the ‘one-size-fits-all’ model and caution too much standardization can kill innovation.

Q. Why hasn’t BaaS taken off yet?

A.

• There are economic and operational constraints.
• Energy service providers offering swapping solutions have to charge 18% goods and services tax (GST) for swapping, compared to 5% GST on the purchase of an EV.
• Additionally, the government’s FAME-II incentives are not offered to vehicles sold with BaaS or swap station operators.
• While these are economic disadvantages compared to direct charging solutions, the lack of a dense and interoperable battery swap infrastructure has also hindered the roll-out.
• Manufacturers, on the other hand, are keen to create proprietary battery and charging systems.

Q. What are the Issues with BaaS?

A. 

• There is a need for standardization of safety specifications  as well as  the battery.
• Swapping in the various permutations and combinations of batteries at a station  where  they  have not been tested for compatibility could lead to safety hazards.
• Also, mandating only one type of battery to  be eligible for  concessions  would be  disadvantageous  to  many  players.

Q. Who offers BaaS in India?

A.

• Bengaluru-based startup Bounce is the first e-two-wheeler maker to sell its scooters with BaaS, and claims to have achieved a million battery swaps.
• Others like Ola Electric and Ather have stuck to direct charging solutions, while Hero Electric offers both fixed and removable batteries.
• Many makers are working with energy service providers to offer battery swapping.
• The global precedent is a mixed bag: Ample, which offers swaps in the US, has found success with commercial fleets, while most personal users charge at home.

Q. Why is Battery Swapping needed?

A.

• High Cost of EVs: An EV, by industry standards, is 1.5-2x costlier than IC Engine counterpart and at least half the cost is from the battery pack.
• Cost reduction: Many manufacturers are offering batteries separately from a vehicle, reducing the cost. In that case, a fleet owner can buy vehicles without battery and utilize battery swapping.
• Range Anxiety: Another major reason stopping people from buying EVs is range anxiety, or in simple terms, the fear of battery getting empty without finding a charging station.
• Inadequate charging infrastructure: Unlike petrol pumps, EV charging stations are rare to spot and that further increases the range anxiety exponentially, especially while going on a road trip.
• Hazard management: In case of a Swapping Station, one can simply locate a station, go and replace the empty battery with a new one.