Battery Swapping: A Game-Changing Paradigm to Foster India's Electric Vehicle Adoption

Kaushik Burman, General Manager, Gogoro

Being one of the world’s largest automobile markets, India is at an inflection point in having accelerated its journey towards net zero carbon and embraced the clean energy transition with remarkable resilience.  Government of India, along with its key ministries of Heavy Industries, Consumer Affairs, Finance and aided by National think tanks have collectively laid impetus to the decarbonization goals with gusto— manifest in the success of FAME-II policy towards EV adoption, leading to achieving the 1 million electric two-wheeler mark.

It has been a great start to an exciting yet arduous journey of an ambitious goal—that of 100 percent electrification of its transportation sector, which has the potential of reducing the fiscal burden of expensive fossil fuel imports, but also creating an ecosystem of upstream manufacturing and downstream infrastructure players, creating millions of jobs in the process. 

Material Opportunity Awaits Unlocking…If the Enablers are Set in Motion

Two-wheeler is an integral part of India’s mobility ecosystem, especially in densely packed urban cities. The current stock of two wheelers powered by internal combustion engines, would be in the range of 240 million units, and about 18-20 million new units get added annually. Safe to summarise that by the end of this decade, the total stock would end up in the 300 million range on conservative basis.

Out of this population, EV two-wheeler stock is about 1.5-2 million units, which is less than one percent  penetration. This data points to a material opportunity in making if the key enablers are set in motion.

Relevance of Battery Swapping in Transforming EV landscape

99 percent of the current two-wheeler riders use the 90,000+ gasoline pump locations across the length and breadth of the country—this refueling infrastructure, which pumps out xx million litres annually—has been built over several decades.

Building an EV charging infrastructure that not only parallels that of a gasoline refueling network, but converts the entire stock of ICE two-wheelers into EV, implies setting up anywhere between 6 to 8 million DC fast charging points, and about 5 times the number of AC slow charging points.

In densely populated metros and tier-1 and 2 cities, where real estate is scarce and is expensive, battery swapping infrastructure can accelerate the adoption rates in the two-wheeler and three-wheeler segments.

Cost Benefits: While conventional batteries require larger battery sizes (kWh) to power the vehicle, battery swapping technology allows for smaller, swappable batteries which reduce overall costs. Since batteries account for a significant portion (4 to 50 percent) of the total vehicle cost, the battery expenditure is borne by the Battery Swapping Station (BSS) rather than the vehicle owner, resulting in cost savings.

For commercial fleet owners, battery swapping offers a means of reducing their capital expenses while enabling them to utilize their assets more efficiently by providing a quick refueling solution. In fact, a well-established network of swapping centers could prove to be a critical enabler for the mass adoption of EVs within India's public transport system.

Reduces Operational downtime: Charging electric vehicles with existing technologies can take several hours, causing inconvenience and range anxiety for drivers. With battery swapping, however, pre-charged batteries are readily available at swapping stations, allowing for a quick battery swap that takes only minutes. This drastically reduces charging time and provides a more convenient and hassle-free experience for drivers. Gogoro’s six second ‘swap & go’ solution is a near zero downtime for customers, creating higher revenues through increased operational uptime.

Increased Range: A network of battery swapping stations allows drivers to extend the range of their electric vehicles without lengthy charging stops. By swapping out depleted batteries the ones that are fully charged, drivers can continue long journeys without worrying about running out of power. This increased range eliminates range anxiety and provides a more enjoyable and seamless driving experience.

Job Creation: Battery swapping stations can create new job opportunities in India, especially in rural areas where traditional charging infrastructure may not be feasible. Staff and maintenance requirements at these stations provide employment opportunities, contributing to the local economy.

Multiple Use Cases of Battery Swapping Leading to Higher Asset Utilization: Gogoro has demonstrated multiple use cases in deploying battery swapping infrastructure in generating additional revenue streams from the network, which is a value add for network partners, whilst also leading to higher infrastructure utilization. Services such as demand response help balance the grid demand and supply during peak and off-peak hours.

Infrastructure Incentives are a Must for Battery Swapping Operators

Battery swapping infrastructure creation requires similar treatment of incentivization as received by the direct charging solution providers under the FAME-II policy. While the finance minister has laid strong emphasis on green growth in the Union Budget for FY2024 presented this February she had also announced the framing of the EV battery swapping policy in the Union Budget for FY2023 – however, the much-awaited battery swapping incentivization policy is yet to be published, which has a huge potential to invite FDI into the battery swapping network infrastructure creation.

“Electrification of the transportation sector, with emphasis on Smart Mobility, driving innovative technologies and business models are quintessential to India’s sustained leadership in achieving net zero goals.”

There is still a pressing need for the government to announce the battery swapping incentive policy incorporating the inputs received through numerous industry-policy-maker consultations. The industry in this regard applauds Piyush Goyal’s decision to defer interoperability standards and hopes that the policy will reiterate this and not foist any standards; in line with the recent developments.

Providing a level playing field in terms of FAME II incentives and equal GST rates will help the nascent industry. Present-day incentives are provided to vehicles powered by direct charging, but not to vehicles enabled by battery swapping—this invariably creates a skewed market. With the creation of the enabling battery swapping infrastructure is capex-heavy suitable incentives will catalyze the EV adoption rates. This makes the level playing field even more pertinent.

This year is India’s moment of reckoning, as India heralds its rise globally, through its G20 presidency. Electrification of the transportation sector, with emphasis on Smart Mobility, driving innovative technologies and business models are quintessential to India’s sustained leadership in achieving net zero goals.