The industry is divided on the impact of battery replacement on innovation | So Good News

With the government likely to announce a battery replacement policy for electric two- and three-wheelers, nearly six months after the project was announced, the industry is divided over its impact on innovation in the segment.

Although battery swapping – swapping dead car batteries for instantly charged ones – is expected to overcome obstacles such as high vehicle costs, long charging times and range concerns, some experts believe this can only be used up to a certain limit. a complete solution to drive the adoption of electric vehicles.

In its current form, the switch would require battery standardization, which many in the industry believe would leave no room for innovation and product differentiation, and could stifle investment in the sector.

“There was a lot of resistance when the policy came out… the policy started discussions about standardization of batteries where the customer should be able to go to any exchange station like at ATMs,” said Sohinder Gill, CEO, Hero Electric.

“This means greater standardization in the size, technology and server of switching stations, as well as greater standardization in battery size and chemistry.”

He said that while the policy is well-intentioned, the industry’s concerns are real, such as who is to blame for a suboptimal battery brought in at the swap station and what happens if that battery catches fire.

Siddharth Kabra, co-founder and CEO of VoltUp, a battery replacement solution provider, said battery replacement reduces EV owners’ initial investment by disconnecting the battery from the vehicle. The solution, he added, is beneficial for last-mile delivery agents as it allows them to travel longer distances while drastically reducing fuel costs. “We have to remember that charging batteries takes a long time. Many of us are still used to going to the gas station where filling is instant… Changing the battery takes about a minute and thus eliminates the problem of parking space, which is one of the prerequisites for charging.

For electric two-wheelers and three-wheelers, the cost of the battery is 40% to 50% of the total cost of the vehicle.

According to an industry expert, who did not want to be named, the draft policy lacks clarity on interoperability and accountability and does not encourage entirely green energy grids. The analyst further added that battery size limitations create barriers to innovation and differentiation of one product over another.

Mr. Kabra added that the upcoming policy should lay down clear guidelines to strengthen the safety standards of batteries and stations and a fully automated replacement mechanism to avoid uncertainties in the proper use of the product.

The draft policy released by Niti Aayog in April this year proposes to roll out Battery Swapping Stations (BSS) in a phased manner, prioritizing metropolitan cities with a population of over 4 million in the first phase. It also states that each BSS must serve at least two EV manufacturers and at least one vehicle segment, i.e. two-wheelers, three-wheelers or light commercial vehicles.

Another industry representative said that companies push products without taking a lot of risk and improving them because everything is a utility. Hence, it can lead to technological stagnation.

Mr. Gill added that while there may be a loss of innovation in some of the two-wheeler/three-wheeler segments, this will be offset by cost benefits and improvements in battery safety and performance.

“I don’t think the convertible is the complete answer for the entire spectrum of vehicles… it’s a good answer for entry-level two-wheelers… We don’t need too much differentiation and innovation in this segment,” he said.

According to research by Invest India and NRI Consulting & Solutions India, the battery replacement business requires broad compatibility of the same set of batteries across multiple vehicles and applications to ensure high throughput and low downtime. “The greater the number of compatible vehicles, the greater the demand for Battery Exchange Operator (BSO) batteries,” it said.

In addition, he said, research and innovation will continue to play an important role as the business uses fast charging, new chemistries, safer batteries, and more. As such, battery technology is expected to undergo frequent changes and “being at the forefront of R&D can help,” he added. BSOs choose the right battery technologies for their business objectives, otherwise they may face the risk of technological obsolescence.”

The study also noted that battery as a service (BaaS) application areas are not limited to the 2W and 3W segment. 4W and larger vehicles like buses/trucks will also benefit from battery replacement. “In the future, the same set of batteries will be used for power backup, micro-grids, water pumps, etc. is used as fuel in a wide range of applications.

Kshitij Bajaj, co-founder of sustainable mobility startup Dandera, said battery swapping “can be used very well up to a certain limit”. However, it comes with its downfalls.”

Mr. Bajaj pointed out that these days there are too many stakeholders at every level – Niti Aayog, state governments and even the Central government – which can get a little chaotic. “As far as the project is concerned right now, I think it would be best if they were one organization working at different levels; addressing all policy and implementation issues from top to bottom”.

He added that while the draft policy was a good start, some amendments were needed. “I think we need to take a longer view because it’s going to be another year by the time we get it all going and things will change. Right now, the EV industry is evolving very fast, so we have to keep in mind what the scenario will be in a year.”