The Niti Aayog released the first draft of the Battery Swapping Policy 2022 on April 21, 2022, to improve interoperability and push for faster adoption of electric vehicles (EV) in the two-wheeler and three-wheeler segment.This segment has competitive prices compared to others. It also constitutes about two-thirds of vehicles registered and can thus play a critical role in faster adoption of EVs.

About the policy

Battery swapping is a mechanism that involves exchanging discharged batteries for charged ones. This provides the flexibility to charge these batteries separately by de-linking charging and battery usage, and keeps the vehicle in operational mode with negligible downtime. Battery swapping standards aim to de-link charging and battery usage to reduce charging downtime immensely and increase vehicle operations. The scope relies on smaller vehicles with smaller battery packs that can be easy to swap. Other advantages include time, space and cost efficiency.

The policy prescribes:

• Minimum technical and operational requirements for swapping
• Ways for direct and indirect financial support to providers and users
• Adoption of business models to encourage private sector participation and affordable financing
• Focus on reuse and recycling of batteries
• An institutional framework for on-ground implementation for swapping infrastructure

Need

• Traditionally, electric vehicles have been sold with “fixed” batteries that can only be charged using the power source while inside the vehicle.
• Adequate, economical, accessible, and dependable charging networks, like fuelling stations for conventional automobiles, are required for widespread EV adoption.
• In India, efforts are being made to increase the availability of charging infrastructure.
• However, constructing charging infrastructure takes a long time, and space is limited in metropolitan areas.

Objectives

• Minimum Technical Standards: This Policy establishes the technical and operational standards that battery swapping ecosystems must meet in order to deploy battery-swapping infrastructure that is effective, efficient, dependable, safe, and customer-friendly.
• Financial Assistance: Direct and indirect financial assistance to battery providers (for battery costs) and EV consumers.
• The policy also suggests assigning a Unique Identification Number (UIN) to swappable batteries throughout the manufacturing process to aid in tracking and monitoring.
• Lowering Taxes: According to the draft bill, the Goods and Services Tax Council should explore decreasing the tax rate difference on lithium-ion batteries and electric vehicle supply equipment.

Advantages

• The policy also allows an individual or entity to set up a BSS at any given location for at least two EV original equipment manufacturers (OEM). This is to enhance the network of energy providers.
• Several recent instances involving e-vehicles catching fire and exploding have engendered a risk-averse mindset. The most common reason is short-circuits within the battery. These batteries would be handled carefully by battery switching stations.
• Unregulated mining activities for battery input materials are putting an increasing demand on a finite supply of natural resources. The creation of new batteries will be reduced as a result of battery switching.
• Battery switching is part of the larger category of business ideas known as Battery as a Service (BaaS). BaaS entails customers purchasing an electric vehicle (EV) without the battery and paying a recurring subscription fee (daily, weekly, monthly, etc.) to service providers for battery servicing during the car’s lifespan.
• It also prescribes only certified agnostic swapping stations to be set up according to Section 3 of the Union Ministry of Petroleum standards on charging infrastructure.
• Charging stations need extra space since cars must be parked near to the chargers while they are charging. Multiple batteries can be stacked on top of each other in battery changing stations.
• Regular charging takes at least 3 to 4 hours with present technologies for e-2Ws and e-3Ws, adding to the inconvenience and causing range anxiety. Because the batteries are pre-charged in changing stations, battery swapping takes only minutes.
• Data sharing aims for transparent communication and non-restrictive data sharing guidelines. There are multiple OEMs with industry standards on battery and vehicle controllers, battery chargers, swapping and open communication protocol.
• Amendments to the policy in the future can be a matter of concern where it is favourable for some OEM. It is ambitious but an overall good attempt to classify data to improve ease of access and availability.

Issues

• It doesn’t talk about additional incentives, but proposes utilisation of prevailing demand side incentives under eligibility criteria based on performance as prescribed under Fame II to ensure superior EVs on road.
• The GST on a standalone battery is now 18 percent, however the GST on a battery sold with an electric vehicle is only 5%. While this will remove a large expense from the car and make doing business in the Battery as a Service area more difficult (BAAS).
• But due to nascent market dynamics, it lacks a constructive fixed roadmap for setting up of Battery as a Service or BaaS infrastructure.
• The provision of setting up independent energy operators can definitely improve a user’s access. But this can be challenging in terms of setting it up and power distribution companies’ (DISCOMs) capacity.

Way forward

• The commercial sector should be encouraged to establish ‘battery or energy as a service’ business models.
• To operate electric vehicles with ease, battery parameters should be consistent across all vehicles.
• The next step might be to standardise charging station authentication and payments.

https://www.downtoearth.org.in/blog/energy/niti-aayog-s-battery-swapping-policy-provides-direction-but-lacks-a-constructive-roadmap-82556

How to structure:

1. Give an intro about EV ecosystem in India
2. Explain Niti Aayog’s battery swapping policy
3. Explain how it helps in faster adoption
4. Mention its drawbacks
5. Suggest way forward
6. Conclude