Battery-swapping policy interesting but unlikely to succeed without government support

PTI, Feb 2, 2022, 12:12 PM IST

Washington DC:  India’s proposed ‘battery swapping’ policy is interesting but is unlikely to work beyond limited situations without a heavy-handed government mandate and subsidy as major car companies do not share the technology around batteries, an expert from the automotive industry has said.

In a major step to promote EV adoption in India, Finance Minister Nirmala Sitharaman, while unveiling a Rs 39.45 lakh crore budget on Tuesday, announced that the Indian government would bring the battery swapping policy to boost use of electric vehicles in the country in view of space constraints for setting up charging stations.

She stated that the private sector will be encouraged to set up sustainable business models for battery or energy service and this will improve efficiency in the EV (electric vehicle) ecosystem.

”Considering the constraint space in urban areas for setting up (electric vehicles) charging stations, a battery swapping policy will be brought out and interoperability standards will be formulated,” Sitharaman said in her Budget speech in the Lok Sabha.

”We will promote a shift to use public transport in urban areas. This will be complemented by clean tech and governance solutions, special mobility zones with zero fossil fuel policy and EV vehicles,” she said.

Responding to the new policy, Arthur Wheaton, an expert on the automotive industry and director of labour studies at Cornell University’s School of Industrial and Labor Relations, said the battery swapping idea is interesting but is not likely to work without a great deal of government involvement and policy.

”Major car companies do not share the technology around batteries (or any technology) and the interchangeable batteries will mean lots of redundant batteries sitting around the country to be effective,” he said.

It is very expensive for battery packs and limited supply of lithium and cobalt to waste sitting in gas stations across the country. It could be an experiment in limited situations, but not likely to work without a heavy-handed government mandate and subsidy, he said.

”There are very few products in the automobile that are consistent across brands. The cigarette lighter power supply (plug for GPS) and the valve stem for tires are about the only ones that can be mixed and matched across any brand,” he added.

Wheaton said there are many barriers in India in the automotive sector and many companies have tried and failed to solve the affordability and scale problems in the country.

He further argued that getting all of the car companies to voluntarily use the same battery design and technology would have to be government-mandated.

Reacting to the finance minister’s announcement, Hyundai Motors India Managing Director Unsoo Kim said on Tuesday the government’s strong approach towards accelerating infrastructure development, sustainability along with digitalisation in every sphere of business will give a strong impetus to the overall economy while empowering consumerism in India.

”The vision for clean mobility creating an electric vehicle ecosystem is a positive indicator for the auto industry and its large supply chain,” he added.

Mahindra and Mahindra Executive Director (Auto and Farm) Rajesh Jejurikar said the road map laid out to usher in sustainable mobility by the finance minister in the Union Budget 2022-23 will bolster the electric mobility adoption in India.

”Battery-swapping can offer a practical alternative to increase the adoption of electric vehicles. As part of our last-mile mobility, we look forward to working with the government, policymakers and our partners to formulate and implement the battery swapping policy,” he added.

Mercedes-Benz India Managing Director and CEO Martin Schwenk said the battery-swapping announcement was a step in the right direction and will be helpful to a limited segment.

Automobile dealers’ body FADA President Vinkesh Gulati said battery-swapping and energy-as-a-service (EAAS) will surely help accelerate the transition towards clean mobility.