EVs without Battery – Opportunity for Swap
India has been a party to the recent wave of EV adoption across the globe. The Government of India, to leverage the potential, has been working on a roadmap to shift public transport and logistics to 100 per cent green and clean sources of energy in the coming years.
In the same direction, the Government of India, allowed the sales and registration of EVs without batteries in August, 2020. The rationale behind the same is understood to be de-linking the cost of the battery from the vehicle cost. The immediate outcome of this announcement is the reduction in upfront cost of an electric two-wheeler (E2W) or a three-wheeler (E3W) as battery accounts for 30-40 per cent of an electric vehicle’s cost. This makes vehicle purchase cheaper for the users and they now can buy a vehicle without a battery and take it on lease from an energy operator (EO). One of the other linked outcomes of this decision is the promotion of battery swapping in India which until now was lagging behind the Public Charging and home charging models. The user can now visit any EO outlet, get the discharged battery swapped with a charged battery, and pay for the relevant services.
The E2W and E3W market account for ~99% of the overall EV market in India. More than 10 lakh people are already using E3Ws daily for their first and last-mile connectivity. The last-mile connectivity market predominantly managed by shared auto-rickshaws, specifically, is witnessing rising daily operating hours and hence requires quick recharging times. Similarly, E2W owners who are unable to charge their vehicles at their homes, battery swapping offers a convenient solution.
Following are the key differentiators between charging done using public charging station (PCS) and battery swapping model for an E2W/E3W user:
| Factor | PCS | Battery Swapping |
| Time Anxiety (considering for B-2-B application, an average delivery person travels around 200 kms a day and the E2W can offer a range of ~80 kms) | 3 to 8 hours | 3-5 mins is what it takes to swap a fully-charged battery with the vehicle’s discharged battery and a user can visit a swapping station 2-3 times a day |
| Payment Model | Pay-per-use | Monthly/annual battery swapping plans; pay-per-use |
| Battery Replacement Cost (considering an average E2W gives 1,000-2,000 cycles, implying the need for battery replacement every 3-5 years) | Rs. 45,000 (every 3-5 years) | No ownership cost; only lease/usage cost |
| Degradation of Battery | Results in reduction of battery life | Discharged batteries are charged in a controlled environment leading to extended battery life and reduced safety concerns |
Challenges/Issues:
- Currently, standard battery packs that are similar for various manufacturers are not available. The absence of this standardization in EV batteries will hinder the implementation of battery swapping. So, the ideal way to adopt it currently is that the OEMs owning the vehicle should only set up their own swap stations to counter the difficulties arising out of lack in standardization of batteries. Ola Electric has already started doing this.
- The EO needs to purchase about 1.5-2 times the batteries as the number of vehicles to make sure that batteries are available at all times for swap. In addition, the EO needs to ensure availability of centralised bulk chargers for charging the batteries and arranging for transport of these charged batteries to each swap outlet. This, therefore, makes the business a CAPEX-intensive one. However, viability is getting better since it does not demand huge investments and large land banks as against in case of setting up of a PCS.
Key Players Operating in this Space:
| Company | About | Solutions | Scale of Operation | Partners |
| Sun Mobility | Bengaluru-based; 50:50 JV b/w Maini Group and Sun Group | Automated battery swapping machines and smart light-weight batteries for rapid swapping | 11 cities | Zyngo, Tata Power-DDL |
| ChargeUp | Delhi-based | Battery as a service to E3W | Delhi-NCR | GreenFuel |
| Lithion Power | Delhi-based; Raised an undisclosed amount in an equity round led by MapmyIndia with participation from a group of HNIs in June, 2021 | Intelligent Energy platform for E2W, E3W; Software that monitors energy utilization and allows asset tracking | Delhi-NCR | Govt. of India, India-focussed OEMs, Fleet Operators & drivers |
| Charge+Zone | Vadodara-based; Raised US$3 Million in an equity round in Nov, 2020 | SaaS-based end-to-end solution named Charge+Cloud for managing and operating battery swapping stations for E3W | Delhi-NCR | SmartE |
It is therefore presumed that though battery swapping, like public charging, has some issues and currently has limited reach, the coming years will witness its rise in adoption. The investments in the segment like that of Hero MotoCorp’s partnership with the Taiwanese EV brand Gogoro to launch Swap & Go battery swapping in India as well as Reliance BP Mobility-Swiggy and Tata Power-DDL-SUN Mobility partnerships are a testament to the stated fact.