Battery Replacement Policy: Some Powerful and Enabling Measures for EV Adoption in India

0

India is ambitious for clean mobility and electric vehicles (EVs) are crucial to bring about this transition. The Government of India has announced several initiatives including the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) I & II programs and a Production Linked Incentive (PLI) program for the National Program on Advanced Chemistry Cell ( ACC). ) Battery Storage (NPACC) to boost domestic battery manufacturing. There are various other evolving policies initiated by central and state governments to introduce electric vehicles in the country.

Typically, electric vehicles come with “fixed” batteries that are charged by plugging the vehicle into a charging station while the battery remains in the vehicle. However, smooth EV operation across India requires a vast network of charging facilities.

Another viable and hugely beneficial option is the introduction of Battery Swapping Services (BSS), which offer a faster, safer, and more convenient alternative to charging. In India, most EVs are two- and three-wheelers with smaller, easily swappable batteries, making BSS more viable in the current scenario. The government recently launched a draft battery replacement policy and interoperability standards with the aim of building and optimizing battery replacement ecosystems and paving the way for large-scale EV deployment in India.

The landmark initiative to introduce the directive and release the draft for comments and suggestions underscores India’s commitment to electric mobility adoption. However, there are certain points that need to be reviewed and revised to create a policy that is relevant to both consumers and EV industry stakeholders.

Compatibility and interoperable ecosystems

In the current draft, only UIN is mentioned, without any information on the compatibility attestation procedure. This needs to be considered and deepened. When we talk about interoperable ecosystems, it implies the physical transfer of assets from one ecosystem to another. However, different ecosystems could continue to power batteries with different chemistry and cell technology even after the directive goes into effect. There would be specific battery pack dimensions and the charging infrastructure deployed could only support certain specific battery packs offered by each ecosystem. In addition, of course, different batteries would be at different stages in their life cycle, and economics of operation would come into play accordingly. Enforcing interoperability between ecosystems can lead to instances where a battery at the end of its life is replaced with a brand new battery. Given these challenges, interoperable ecosystems are not a viable option. Regarding the gradual transition, battery suppliers have already made significant investments in batteries and connectors before standardization measures come into force. Because ACC batteries have a much longer lifespan, this transition time must be very long. There must also be additional incentives and support for providers to make the transition to an interoperable ecosystem.

data transmission

Data is a key service differentiator. Each battery vendor optimizes operations and finances based on battery inventory data. Therefore, the right approach would be to determine if there is specific data that the government considers important to improve the customer experience. This should be submitted quarterly as a battery vendor self-declaration in a pre-defined format and come into effect for the vendors that choose interoperability across ecosystems. By exchanging asset data, providers lose their competitive advantage over their peers and would discourage innovation in the industry.

business models

The intent to eliminate and avoid closed loops is well targeted and will no doubt help increase EV adoption. The policy rightly aims to standardize and achieve compatibility of electric vehicles, batteries and charging infrastructure. However, interoperability between BSS ecosystems is not feasible. There must be minimal mandatory sharing of data by battery providers and only for the benefit of end users. The need of the hour is to create a safe, reliable, and compatible ecosystem with standardization that can help the industry and encourage EV adoption in the country.

Tax Support

Standardization and different business models could mean that the battery would be compatible in different electric vehicles and could be used across the board. Therefore, only the kWh share is to be taken into account as the basis for the tax incentive. There is also a need to level the playing field and encourage early adopters. This can be done by ensuring that the tax benefit is passed on equally to the battery suppliers’ existing batteries.

Complaint Resolution and Compensation

The given demand incentive is meaningfully passed on to the end consumer from the outset through more favorable pricing. Therefore, returning the demand incentive is financially unsustainable. To draw a parallel, in the FAME II subsidy scenario, it cannot be returned by the EV OEM even if there is a complaint from the owner. Introducing such a clause would result in battery owners not being able to pass on the full incentive to end users and being forced to reserve part of the incentive as a safeguard against reclamation risk and incentive reversal. Thus, such a clause would deny end-users the full benefit of the applicable incentive.

Provision of land at special prices for public battery exchange stations

To ensure fair competition, land sharing must be done in an open and transparent manner through a dedicated portal accessible to all battery suppliers. In addition, in order to ensure equal opportunities for all stakeholders and provide diverse options for end users, it is suggested that at least 3 battery providers should be housed in each building offered by the government or public bodies.

These are some of the key points to review according to the shared proposals and it is hoped that the draft directive on battery replacement will be amended accordingly. This will ensure consumer and service provider interests are safeguarded and pave the way for faster EV adoption in India!

Share.

Comments are closed.