Catalysing EV Adoption: Draft policy seeks to create a robust battery swapping ecosystem

Draft policy seeks to create a robust battery swapping ecosystem

Electric mobility is leading the de­car­bonisation of India’s transport se­ctor. The country’s EV revolution is expec­ted to be driven by the two-wheeler and three-wheeler segments. Of all private vehicles, over 70-80 per cent are two-wheelers. Meanwhile, three-wh­ee­lers are crucial for public transport, last-mile connectivity and freight, and are witnessing a mass migration to electric. Till now, EV adoption has met with certain challenges such as lack of charging infrastructure, high costs and long refuelling times. These challenges can be resolved to some extent with battery sw­apping, which all­o­ws the delinking of EV charging and batteries. Simply put, di­scharged batteries can be qui­ckly ex­ch­anged at battery swapping facilities for charged batteries.

Innovative models such as battery-as-a-se­rvice (BaaS) allow consumers to pur­ch­a­se an EV with or without the battery, thus helping address so­me of the concerns associated with EV uptake. During the Union Budget 2022-23, the government annou­nced its intent to launch a ba­­ttery swa­pping policy. Subsequently, NITI Aa­yog dra­fted a battery swapping policy which is open for in­puts from until June 5, 2022.

Objectives, incentives and features

The draft policy aims to boost large-sc­ale adoption of EVs by creating a battery sw­apping eco­system that ensures minimal EV downtime while lowering costs and sp­a­ce requirements. As per the policy, ba­ttery swapping would fall un­der the BaaS mo­del, wherein customers can pay a regular subscription fee at fixed intervals to service providers for battery services th­roughout the vehicle’s lifetime. Only batteries using ad­­vanced chemistry cells, with perform­a­nce that is equivalent or superior to EV ba­t­t­eries supported under the FAME-II sc­h­e­me, would be considered under the policy. The policy also seeks to provide incenti­ves for greater adoption of swappable ba­tteries in EVs. It has recommended that the GST Co­uncil consider reducing the differential across the tax rates on lithium-ion batteries and EV supply equipment. At pr­e­sent, the tax rate is 18 per cent on the fo­r­mer, and 5 per cent on the latter. The sa­me incentives available to EVs that come pre-equipped with fix­ed batteries will also be available to EVs with swappable batteries. The size of the incentive is likely to be determined bas­ed on the kWh rating of the battery and the compatible EV. The state governments are also required to ensure that public battery charging stations are eli­gi­ble for EV power connectio­ns with co­n­­cessional tariffs. Such stations are proposed to be brought under existing or future time-of-day tariff regimes, to all­ow swappable ba­tteries to be ch­arged du­ring off-peak periods when electricity tariffs are low.

As data sharing will play a crucial role in ensuring interoperability, major battery providers will be encouraged to sign data sharing agreements to provide informati­on on battery health and performance, and to enable more flexibility for consu­mers th­rough peer-to-peer ro­a­ming net­wor­ks.

Fur­thermore, to ensure seamless and streamlined tracking and monitoring of swappable batteries throughout their life cycles, the policy proposes to as­sign a unique identification number (UIN) to each battery at the manufacturing sta­ge. A UIN will also be assigned to each battery swapping station. Battery sw­apping stations are proposed to be set up at mu­l­tiple, di­verse lo­cations such as malls, retail fuel outlets, public parking ar­eas and local general st­ores. Moreover, to en­sure battery safety, sw­appable batteries will be equipped with ad­vanced features such as internet of thin­gs-based battery monitoring systems and re­­m­o­te monitoring and immobilisation ca­pa­bi­lities. A rigorous testing protocol will al­so be ad­opted to avoid any un­wanted te­mperature rise at the electrical interface. Further, the policy covers steps for recycling of batteries at the end of their life cy­cles. Once finalised, the policy will be implemented for the development of ba­­ttery sw­a­pping networks in all metropolitan cities with a population of more than 4 million un­der the first phase, and major cities, such as state capitals, with a population of more than 0.5 million under the second phase.


Promoting battery swapping for EVs is a welcome step in India’s journey to net zero emissions. Battery swapping offers key ad­vantages over traditional batteries: it is time efficient and costs less. Yet, as the industry is still at a nas­cent stage, several challenges lie ahead. As the de­mand for EVs is rising, different busine­ss models and battery designs are being explored. Therefore, achieving standardisation may be a time-consuming pro­cess and a “one-size-fits-all” ap­p­ro­a­ch may not be fruitful. Also, as the de­mand for EVs is not yet fully es­tab­lished in the market, the initial cost of in­vestment in battery swapping technology and stations may be very high. With­out adequate and appropriate financial and regulatory incentives, private players may not be willing to take the initial risk involved.

Nevertheless, with the right implementation of the draft policy, there is imm­en­se po­tential for es­tabli­shing a full-fledged ba­ttery swapping ecosystem in India, especially given the rising penetration of el­e­ctric th­ree-wheelers acro­ss metropolitan cities.