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Battery Swapping Policy – Dawn of a new era

The most important aspect of this policy is that it puts the battery manufacturers in the front and centre of this entire scheme.

Bounce Battery

By: Venkat Rajaraman, CEO and Founder, Cygni

The much-awaited draft policy for the swappable batteries was released by NITI-Aayog a few days back. The policy has a lot of good interventions which are very important from the adoption perspective and at the same time the policy skims over some of the critical details, and a few details are still left open. 

Good aspects – Smart BMS, UIN:

The draft policy mandates that swappable batteries be enabled with Smart Battery Management System (BMS). Battery monitoring and data capture are essential for swappable batteries, and this policy ensures that the batteries need to be fitted with Smart BMS. More than 50% of the batteries in India today are fitted with imported, cheap hardware BMS from China and other countries and such low-quality BMS will go out the door under this new policy. The policy also mandates that the batteries will have to be IoT enabled so that they can be remotely monitored. 

More importantly, the policy mandates all the battery manufacturers to come up with a Unique Identification Number (UIN), very similar to what was stipulated for the solar panel industry. The battery capacity, the voltage, and all other pertinent battery details will be embedded or linked as part of this UIN. The policy also mandates that the swapping operators will have to store the battery usage history. This is a huge step in the right direction.

The most important aspect of this policy is that it puts the battery manufacturers in the front and centre of this entire scheme. So, it clearly states that the battery manufacturers should be the single point of contact and the battery providers will be the ones who will receive the subsidiary under this policy. 

Another key aspect of this policy is that the battery swapping will support only those batteries which come under the FAME II scheme or the ACC PLI scheme. So, what it means is that it will be applicable only for high-speed vehicles which have a certain minimum range.  The lower capacity, low-speed vehicles will not be eligible for this battery swapping scheme. There are a lot of vehicles on the Indian roads today which has a lower range, and smaller capacities and these vehicles will not be eligible under this policy. 

Aspects that need more intervention:

GST differential rate has been an Achilles heel for the EV industry.  On the GST front, there is a differential GST rate between batteries and electric vehicles. This policy does not address the differential GST issue and leaves it up to the GST Council to address the same. 

Another aspect of this draft policy is now that vehicles without batteries can be registered just based on the type-approval certificate. So, one can take the vehicle without a battery and have that registered with the state transport authority.  These details are to be incorporated at the state level. 

Also, the OEM / the EV manufacturer can go ahead and get their vehicle homologated or get their ARAI approval done without the battery. The ARAI standard will have to be modified, as the current AIS:156 standard does not cover the battery swapping.  The standard will have to take into account that the swappable batteries will have to be swapped a few thousand times and the testing procedure should be established for that.  

Venkat Rajaraman, CEO and Founder, Cygni

The draft standard also allows for data sharing arrangements between the battery swapping operator, the battery manufacturer and the EV OEM. These are all good initiatives. The policy also allows for multiple business models to emerge, though it does not talk about specific details and has kept them open. On the policy implementation front, the Bureau of Energy Efficiency (BEE) is put as the nodal agency and also for the charging station. 

Inadequate aspects:

There are a few areas that are left open, and the draft policy doesn’t address them fully. I think closure on these is very important for adoption to take off.  The first one is the standardization in terms of the battery dimensions, connectors, size, voltage etc. This is required for interoperability between the battery, the vehicle, and the charger.  These details are left open-ended in the policy. The communication standard and the communication protocol for battery packs to other equipment are left unaddressed. The Bureau of Energy Efficiency (BIS) has been mandated to define and approve these technical standards.  The technical closure is very critical for battery swapping adoption and proliferation. 

Under the policy, the demand-side incentive, which is currently applicable under the FAME II scheme, now can be made available in EVs with a swappable battery.  The main differentiation is that this incentive shall be given directly to the battery manufacturer. The details of how this incentive to battery manufacturers shall be given, still have to be worked out. The amount of subsidy and the multiplier factor that needs to be considered for the incentive (as the battery swapping station will have a higher Battery to EV ratio) are yet to be worked out and finalized.  There are a lot of state-level interventions to be implemented for this draft policy to be successful.  The state transport department will have to allow for the registration of the electric vehicle without batteries. 

The draft policy is also a little soft on the safety aspects of the swappable batteries and doesn’t address this important topic completely.  It has asked the stakeholders to follow the guidelines as per the local DISCOMS and as per the Central Electricity Authority (CEA) regulations. This needs to be more thoroughly addressed and we need to evolve more detailed mechanisms to ensure safety.  

In summary, the policy intervention in terms of smart BMS, IoT-based monitoring, having this Unique Identification Number, and vehicle type approval with an interoperable swappable battery are all initiatives in the right direction.  The policy will have to evolve to become Good, better, best.  As the saying goes, till your good is better and your better is best, never let it rest. The time has come for India to prove that.

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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