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Auto makers fast-track partnerships in battery-swap market to hasten EV adoption

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Auto makers fast-track partnerships in battery-swap market to hasten EV adoption

Mumbai: In a bid to hasten the adoption of electric vehicles (EVs) and relieve customers from range anxiety, auto makers, energy companies and startups have begun fast-tracking partnerships in the emerging battery-swap market. Such tie-ups will enable original equipment manufacturers (OEMs) to reduce upfront costs of acquisition by at least 40-50%, leading to increased adoption and sales, experts say.

Bengaluru-based startup Bounce this week announced a partnership with Greaves Retail, making the latter the first to join the Bounce Infinity battery-swap network.

“This enables more Indians to have access to affordable mobility with Battery as a Service (BaaS),” said Vivekananda Hallekere, Bounce cofounder and CEO. The company has raised more than $200 million and has a network of more than 200 swapping stations. Bounce says it has completed more than 1 million swaps, having launched its electric scooter, the Infinity E1, in December 2021, offered with the BaaS feature. For those opting for the latter, without the battery, the scooter is priced at Rs 37,000. It costs Rs 60,000 with the battery.

Some of the other tie-ups recently announced include Hero Electric and Sun Mobility, a leading provider of energy infrastructure, targeting around 10,000 electric battery swappable two-wheelers by the end of this year.

“It makes a lot of sense for the B2B customers as the swapping stations can be placed in the working zones for the riders to allow them to run their bikes without waiting for the recharging of the batteries,” said Sohinder Gill, CEO, Hero Electric .

Niti Aayog CEO Amitabh Kant said, “With disruptive business models such as battery swapping, leasing etc., consumers need not own the asset–battery, which is ~50% of the total vehicle cost–bringing down the upfront vehicle cost for e2w and e3w (electric two-wheelers and three-wheelers) much below the ICE (internal combustion engine) counterparts.”

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The government think tank is expected to roll out a battery swapping policy in the next three-four months that could play a key role in enabling the EV industry to reach critical scale.

“The pros of the battery swapping technology, along with the government’s initiatives to come up with tangible policies, will definitely accelerate the demand and adoption of EVs in the country,” said Chetan Maini, chairman of Sun Mobility, which is exploring battery swapping partnerships with several auto majors.

Other partnerships include BSES discoms and Ola Electric to set up charging stations, initially in Delhi. Early this year, the Delhi government signed an agreement with Convergence Energy Services Ltd (CESL) to install battery swapping stations for electric two, three and four-wheelers at bus depots. Honda and Hindustan Petroleum Corp. Ltd (HPCL) have also announced a partnership for battery-swap stations at retail outlets across the country. Separately, Honda will offer battery-swap services to electric three-wheelers in Bengaluru by the end of June, before entering other cities. Hero MotoCorp is partnering with Taiwan’s Gogoro to set up battery swap stations.

Yulu says it’s planning to achieve more than 3 million battery swaps with a fleet of 100,000 EVs by the end of 2022. Battery Smart, a Delhi based startup, says it has completed 1 million paid swaps.

Gill said the bigger market in battery swapping is the B2C segment, especially commercial vehicles, where the upfront acquisition cost is crucial.

“This will increase the confidence among battery manufacturers, OEMs, charge-point operators and, most importantly, consumers, with a clear policy roadmap,” Kant said.

However, OEMs are worried about standardisation, minimum energy density, and safety guidelines to enable interoperability.

“Till the time a critical mass of vehicles on the road has been achieved, a high ratio of batteries need to be maintained in the system, for every battery on the road,” said Rakesh Sharma, executive director, Bajaj Auto, which makes electric as well as conventional bikes. “This will drive up system costs, which will eventually get passed onto the customer.”

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