Fresh consultations with stakeholders on battery swapping policy soon

The Centre is planning to initiate fresh consultations to finalise interoperable standards for battery-swapping policy of electric vehicles (EVs), Business Standard has learned. As part of this endeavour, the Ministry of Heavy Industries will hold a meeting on September 29 with industry stakeholders.

The objective of the meeting is to streamline the standards for battery-swapping technology, ensuring compatibility across various EV models and charging stations.

“The meeting is called to bring all the industry stakeholders together on battery interoperability standards. We want to bring the revised battery-swapping policy soon,” a senior government official said.

The Ministry of Heavy Industries has invited representatives from the India Battery Swapping Association (IBSA), India Energy Storage Alliance (IESA), Society of Indian Automobile Manufacturers (SIAM), Invest India, Niti Aayog, and the Ministry of Power for the meeting.

This move comes months after the industry failed to reach a consensus on the battery-swapping policy draft dated April 20, 2022.

During their previous meeting with the government, EV manufacturers had emphasised that implementing any standard could inadvertently hinder innovation. Stakeholders claimed that it is not feasible technically to create such standardised batteries, as each battery needs to be specifically designed to work with a vehicle, featuring unique dimensions, hardware, and software.

However, government officials said that the policy aims to support existing infrastructure and not to deter someone from investing in research and development. “The aim is to standardise the batteries used in EVs and not to hamper innovation,” a senior official said.

Discussions are expected to focus on technical specifications, safety standards, and the logistics involved in implementing interoperable battery-swapping technology.

Standardising battery-swapping technology is considered a critical step in addressing a significant challenge in the EV sector: the lack of consistency in battery formats and charging infrastructure.

Through the establishment of these interoperable standards, India aims to create a fair competitive environment for EV manufacturers and charging infrastructure providers, ultimately benefiting consumers.

Battery swapping offers promise as a solution to alleviate concerns related to EV range anxiety, enabling EV owners to swiftly exchange depleted batteries for fully charged ones.

The battery-swapping initiative was first introduced by Finance Minister Nirmala Sitharaman in her Budget speech in February 2022, followed by the prompt issuance of a draft policy by the Aayog in April that year.

The draft policy also outlined safety requirements, the introduction of a unique identification number for battery identification, battery monitoring and traceability systems, recycling and refurbishment processes, along with a possible subsidy mechanism.

Battery swapping is part of the broader category of battery-as-a-service business models. These models entail users purchasing an EV without the battery, substantially reducing initial expenses. Instead, users pay a recurring subscription fee (daily, weekly, monthly, and so on) to service providers for battery services over the vehicle’s lifespan.

While battery swapping may make vehicle purchases more appealing due to lower initial costs, manufacturers are hesitant to adopt this approach. Such a policy could potentially erode their unique competitive advantages and revenue streams, putting pressure on them to revamp their existing infrastructure.

Manufacturers currently take advantage of government subsidies tied to batteries to reduce the initial cost of their vehicles when they include batteries with their products. However, under the draft policy, battery providers will be the ones receiving these subsidies, potentially causing original equipment manufacturers to lose this upfront advantage.