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Karan Singh
| Updated: 23 Apr, 2022 | Category: Latest News

Battery Swapping Policy by NitiAayog – An Overview

Reading Time: 4 minutes

One of the Government’s bodies Niti Aayog, has prepared a draft of a Battery Swapping Policy, under which it has offered incentives to EVs or Electric Vehicles with swapping batteries, providing subsidies to a company manufacturing swappable batteries, a new battery-as-a-service business model, and standards for interoperable batteries, among other measures.

During the Union Budget 2022-23, the Finance Ministry of India Nirmala Sitharaman had announced that the Government of India was set to roll out a Battery Swapping Policy in a bid to lessen upfront costs of purchasing Electric Vehicles and drive adoption among buyers. It also comes amid several examples of Electric Vehicles exploding into flames, raising concerns about their safety. Battery Exchange Policy is aimed at supporting the adoption of battery swapping systems used in electric scooters and 3-wheeler electric autos or rickshaws. Currently, the draft is up for consultation, and the NitiAayog[1] has invited comments on it until June 05, 2022.

What do you mean by Battery Swapping?

It’s a mechanism for exchanging discharged batteries for charged ones. The battery swapping facility also provides the flexibility to charge these batteries individually by de-linking charging & battery usage & keeps the vehicle in operational or working mode with negligible downtime. Swapping of battery is used for smaller vehicles such as 2 and 3 wheelers with smaller batteries that are easy to swap, compared to 4 wheelers and electric buses, although solutions are emerging for these larger segments as well.

Objectives of Battery Swapping Policy by NitiAayog

Following are some key objectives of this policy:

  1. Promote battery swapping with ACC or Advanced Chemistry Cell batteries to decouple battery costs from the upfront costs of purchasing electric vehicles;
  2. Provide flexibility to electric vehicles users by promoting the development of battery swapping as an alternative to charging facilities;
  3. Establish principles behind the technical standards that would enable the interoperability of components or parts within a battery swapping ecosystem without obstructing market-led innovation;
  4. Leverage policy & regulatory levers to de-risk the battery swapping ecosystem to unlock access to competitive financing;
  5. Encourage partnerships among battery providers, battery OEMs and other relevant partners like financing or insurance, thereby boosting the formation of ecosystems capable of delivering integrated services to end-users;
  6. Promote better lifecycle management of batteries, including maximising the use of batteries during their usable lifetime & end of life battery recycling.

Key Proposals of Battery Swapping Policy

  • The draft Battery Swapping Policy has suggested that the GST Council consider lessening the differential across the tax rates on Lithium-ion batteries and EVs supply equipment. Presently, the tax rate on the former is 18% and 5% on the latter.
  • The policy also proposes to provide the same incentives available to electric vehicles with swappable batteries. The draft policy states that “the incentive size could be determined based on the kWh rating the battery and compatible electric vehicle”.
  • The draft of the Battery Swapping Policy also states that a suitable multiplier may be applied to the subsidy assigned to battery providers to account for the float batter necessities for battery swapping stations in different battery swapping ecosystems. The Government will also define a minimum contract duration for a contract to be signed between EV users & battery providers to ensure they continue to facilitate battery swapping services after receiving the subsidy.
  • The policy requires State Governments to make sure the public battery charging stations are eligible for electric vehicle power connections with concessional tariffs. It also proposes to bring such battery charging stations under present or future time-of-day tariff regimes or schemes so that the swappable batteries can be charged at the time of off-peak periods when electricity tariffs are low. The draft policy also said that the “State Transport Authorities and Transport Departments will be responsible for easing or soothing the registration processes for vehicles sold without batteries/for vehicles with battery swapping functionality”. Municipal corporations will be accountable for planning, land allocation & zoning permissions for battering swapping stations.
  • The Battery Swapping Policy also proposes to assign a UIN or Unique Identification Number to swappable batteries at the manufacturing phase to help track & monitor them. Similarly, a UNI will be assigned to each station.
  • It also proposes to install such stations at several locations such as public parking areas, Kirana shops, general stores, etc.

Registration of Electric Vehicles with Swappable Batteries

Vehicles with swappable batteries will be sold without a battery, providing the benefits of lesser purchasing costs to potential electric vehicle owners. According to the MoRTH, a vehicle without batteries can be registered based on the approval certificate type issued by an accredited or certified Testing Agency, without the need to specify the make or type or any other information of the battery. Any vehicle with a swappable battery should be registered without reference to the battery details to confirm the validity of the Vehicle Registration when using any certified battery. UTs and Transport Departments of States are advised to establish procedures to streamline the registration of vehicles with swappable batteries at RTOs.

BaaS or Battery-as-a-Service Model – Meaning

NitiAayog said battery swapping would come under the BaaS business model, and such models would have to ensure interoperability between electric vehicles and batteries for a successful mainstreaming of battery swapping as an alternative. The draft Battery Swapping Policy says, “Given the nascency of battery swapping, interoperability between electric vehicles batteries & other components or parts within a battery swapping ecosystem adhere to the technical & performance standards defined for BaaS and battery swapping services”.

Besides batteries themselves, major battery providers will be encouraged to sign data-sharing agreements to give information on battery health and performance & to enable more flexibility to customers through peer-peer roaming networks. The Battery Swapping Policy also adds, “For the categorisation of collected data under the broad categories of proprietary, private & open data, restricted access, a non-restrictive detailed guideline will be developed for adherence by all industry players.

This Battery Swapping Policy requires ecosystems to be open to allow participation from other market players in order to be deemed for support under the policy. The policy will only support batteries using ACC or Advanced Chemistry Cells, with performance that is equivalent or superior to electric vehicle batteries supported under the Government’s FAME-II Scheme. As of now, 2-wheel EV maker Bounce has launched an e-scooter with a swappable battery. Under the business model of a company, customers can pay to swap their battery at one of their battery swapping stations whenever it runs out of juice.

Conclusion

To ensure battery safety & security of assets, swappable batteries will be equipped with advanced features like IoT based battery monitoring systems, immobilisation & remote monitoring, and other required control features.

Official Draft of Battery Swapping Policy by NitiAayog

20220420_Battery_Swapping_Policy_Draft_0

Read our Article:GST Council Meeting: Expected Changes

Karan Singh

A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.

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