Should the government promote EV battery swapping?
Recently, the government allowed electric vehicles to be sold and registered without batteries. The rationale behind the move, it explained, was to de-link the cost of the battery from the vehicle cost.
Battery accounts for 30-40 per cent of an electric vehicle’s cost and this move would bring down the upfront cost of an electric two-wheeler or a three-wheeler at par or even lower than those powered by internal combustion engine. By doing so, the government is hoping to accelerate the adoption of electric vehicles whose penetration is still a low 1 per cent in the country.
- A section of industry experts pointed out that selling/registering a vehicle without a battery opens up new ownership models. Some players are already experimenting such models where the cost of the vehicle does not include the battery. Customers pay for it based on the number of kilometres they run the vehicle, or on a monthly subscription basis or simply lease the battery.
- Adoptions of battery swapping on a large scale to re-charge an electric vehicle will supplement charging infrastructure which is costly and time consuming to build.
- Battery swapping also saves time (one does not have to spend hours charging the battery) and is productive (down-time of the vehicle when it is charged is absent). Of course, it also reduces the acquisition cost of the vehicle as the customer just pays for the energy.
- It will be not be possible to implement battery swapping unless the electric vehicle batteries are standardised. That is the problem. Standardising the batteries, at this stage, when the technology is still evolving will kill innovation. It can happen only if a technology or design has matured. That is not the case with electric vehicle batteries yet. The energy density, shape, size, mounting of the battery and its communication with the battery management system are still evolving.
- Each manufacturer approaches the battery differently. Some like Tesla want it to be so intelligent that its operation and efficiency can be monitored remotely for best performance. Standardisation will end all this. Also, India is still in the early stage of battery development value chain and setting standards now will be to the advantage of foreign players notably Chinese and Taiwanese manufacturers. It is they who will dictate the standards that we will have to follow.
- In the case of battery swapping, there is a belief that the potential for its adoption in India could be over-rated. In India, 80 per cent of the electric vehicles will be two-wheelers. They would run on an average 20-40 kilometres a day and can be easily charged at home, at night, for a few hours. Three-wheelers, which will account for another 5 per cent, typically average 150 km a day and they too can run on a single charge in most case. It is unclear as to what percentage of users in these two categories would prefer battery swapping.
- Also, swapping a car battery is a laborious process as accessing it is not easy. It would require heavy investment in equipment/tools. Better Place, a start-up in Israel, tried it between 2007 and 2013 and eventually went bust. While its founder Shai Agassi may have been way ahead of time with the idea of swapping batteries, the start-up’s failure also highlights the challenges involved in the model.
Way forward –
- As the battery swapping as a model has its advantages but till the battery technology matures, it makes sense for the government to promote it in a manner where respective OEMs drive it. They can set up their own swapping infrastructure and this will obviate the need for standardisation for now.
- Considering all these challenges, it is better if the government allows various models to evolve before promoting anyone of them. Any attempt to push through a particular model in a hurry and the resultant fallout, if any, could cause customers to lose faith in electric vehicles. That will be big setback not only for the government but for the country as well.
Source – The Hindu Business Line
QUESTION – With recent decision to register e-vehicles without batteries, the government intends to promote ‘battery swapping’ business model in India. Discuss its impact and potential in promoting e-vehicle adoption in India.