Currently, India’s automotive industry ranks fifth globally and is expected to rise to third position by 2030. Its total worth is more than $222 billion, within which the EV market is estimated to account for $2 billion by 2023 and $7.09 billion by 2025. The Government has been implementing several programs and policies to encourage the adoption of electric mobility, such as 100 percent FDI through the automotive route in the EV space, incubator programs, shared facilities for prototyping and small-scale manufacturing, financial support via the Credit Guarantee Scheme for Start-ups (CGSS), tax breaks, and subsidies for consumers. Last year, investments into EV startups reached a sizeable high - about 255 percent to reach $ 444 million.
Considering the sector’s potential in reducing nearly 1 Giga tonne of carbon dioxide emissions by 2030, Niti Aayog released a draft policy in April 2022 on battery swapping for two- and three-wheelers, with presumably some advantages in mind. In simple terms, battery-swapping means exchanging discharged batteries for charged ones. Swapping disconnects the vehicle from the fuel, or the battery.
Now, battery swapping may have been a good idea in the past, when most EVs had a drivable range of 100 km or under, and public charging merely existed. But in 2022, many experts claim that it is a technical and market dead-end that will just remove green investors from their funds, rather than provide a viable solution to a problem.
Battery technology is evolving and changing at a rapid pace. Locking on to a particular technology at the nascent stage of the technology S-curve, will stifle innovation. The common standardized battery in swapping will lead to the industry getting stuck with old technology while the world moves fast ahead.
The evolution of cellular phones and their battery offers good insight: as smartphones came into being, battery capability became core to support different applications. Initially, for heavier usage, batteries could not support full-day usage and they were supported by add-on power banks or charging points in busy public places. However, over a period of time, with advancements in battery tech as well as optimization of cell phone power consumption, power banks have become redundant. If cell phone batteries were standardized, these advancements would not have happened.
There are several inherent disadvantages when it comes to swapping, such as ownership of batteries getting complex, standardization of batteries across vehicles being required which impacts optimization and will curtail innovation, the number of batteries required per vehicle increasing, and many more. From India’s perspective, battery swapping goes against the very idea of the Government’s ‘Atmanirbhar Bharat’ mission.
But let us understand why is that so.
Many players, with vested interests, are advocating for imported technologies in the EV battery swapping space. However, many of these technologies won’t work for India, and even if some do, the domestic industry stands to suffer, which again goes against the Government’s vision of Make in India and ‘Atmanirbhar Bharat’.
Besides, it is imperative that consumers have the ultimate choice with respect to which technology or solution they want to embrace and which they don’t. This approach extends to battery technology as well. Therefore, mandating the use of certain technology is not a viable solution in the long run, given the way how the industry is dynamically progressing each day.
If the option to provide swappable batteries is left to the auto manufacturers and in the way in which they design their vehicles, for instance, the battery standards will get fixed for interoperability. This will make it very difficult to differentiate between the performances and experience of one manufacturer over the other. Customers too will be deprived of the choice or options that they want.
Also, if battery swapping is separated from the vehicle business, it will lead to the creation of a monopoly. Even a semi-monopoly or tangential association between battery manufacturers and auto companies will adversely impact other vehicle makers, by forcing consolidation.
Standardization of swappable batteries will build a monopoly for a handful of companies that will lay down their own standards and make their vehicles interoperable with those standards. Such an approach will itself contain innovation and channel the entire industry’s profits to one particular company or group. And if these companies are from abroad, we will be dependent on imported technologies and our own manufacturers will suffer.
Vehicle companies do not share battery technology and swappable batteries will mean huge amounts of unused batteries lying around idle. That will not only harm the environment but also be cost-incompetent.
Stress needs to be on safety norms since it is critical and needs of the hour. For the sake of safety and convenience of customers, OEMs cannot part away the responsibility of proper functioning, safety, and quality of battery packs to third-party suppliers.
Dr. Samir Kapur is a veteran communication professional. He also teaches marketing, public relations, and business communication courses at leading colleges. His book “When India Votes” has been rated as the bestseller in marketing campaigns by Amazon in 2019.