Can battery swapping power EVs for the long term in a cost-effective way?

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What is the news?

In Budget 2022-23, , the Finance Minister has announced that the government would introduce a battery swapping policy and interoperability standards. 

What is battery swapping?

Battery swapping or battery-as-a-service allows EV owners to replace the discharged batteries with charged ones at the swap stations. When the battery is discharged, the owner can change it with a fully charged one. 

How will the Battery Swapping Policy work?

The policy is likely to focus on battery swap services for three-wheeled auto rickshaws and two-wheelers such as electric scooters and motorcycles. 

Under the policy, EV owners may get incentives of up to 20% on the subscription or lease cost of the battery. 

What are the advantages of Battery Swapping?

Firstly, it will address the problem of setting up charging stations and also reduce range anxiety of drivers.

Secondly, it can help EV owners save the cost of purchasing a battery. 

Thirdly, it is less time consuming and takes only a few minutes compared to charging at a battery station which could take hours. 

Lastly, it also requires minimum infrastructure.

What are the barriers to Battery Swapping? 1) High Cost of Battery (Batteries account for close to 60% of the cost for an e-two-wheeler) 2) Lack of standardization among batteries 3) Unsuitable battery pack design and 4) Higher GST on separate batteries (18% versus 5% for EVs) 

Source: This post is based on the article “Can battery swapping power EVs for the long term in a cost-effective way?” published in Business Standard on 10th Feb 2022.

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