The Contra View: 5 Arguments Against Battery Swapping

A lot has been written about the advantages of Battery Swapping to make a shift to renewable energy for mobility. The value of Battery Swapping lies in the fact that separating the price of the electric car from the battery, its costliest part, will make it attractive to the customer.

However, in the interest of fairness, this article will present the other view, namely that there are several fallouts in the idea of vehicles with battery swapping when compared to charging stations-based plug-in models. Many experts have time and again put forward arguments against battery swapping, claiming that it is a technical and market dead-end. What makes calling the future on battery swapping is the undoubted fact that the interests of most large major automobile manufacturers currently work against it, as seen in their public pronouncements as well as private efforts.

India hosts one of the largest automotive industries in the world, worth over $220 billion. Electric mobility in the domestic market has, since its inception, picked up speed quickly especially in the two wheeler and three wheeler (cargo)segment. The EV market is expected to be over $2 billion by 2023 and $7.09 billion by 2025. The government has also played its role.  These include a 100 per cent FDI through the automotive route in the EV space, incubator programs, shared facilities for prototyping and small-scale manufacturing, financial support via the Credit Guarantee Scheme for Start-ups (CGSS), tax breaks, and subsidies for buyers through the FAME schemes.

Earlier in April 2022, Niti Aayog released a draft policy exclusively on battery swapping for two- and three-wheelers. Its provisions mean to address the challenges specific to the battery and EV industry. Nevertheless, many industrial players don’t agree that battery swapping is a good idea to move ahead with for the future of the EV industry. Here are some of the more cogent arguments against battery swapping, also prompting to focus on the more promising alternative – charging stations.

…will hinder the innovation

As the older ICE models are getting replaced by comparatively newer electric options, the role of battery as a source of energy is indispensable. But in the beginning, battery technology as a source to run vehicles was just a concept. Thanks to research and innovations in the field since the dawn of the twenty-first century we have not only made that idea a reality, but the technology now shows a promise to replace ICE in future.

One of the prominent arguments against battery swapping is that locking on to a particular technology (in this case, battery swapping) at the nascent stage of the technology S-curve, will stifle innovation. Battery swapping will need standardisation. This may lead the industry to get stuck with old technology, hindering innovations. This is just like the evolution of cellphone batteries.

Initially, the batteries of a multifunctional smartphone needed support – add-on power banks or charging points in busy public places. But with advancement and innovations, that need has become redundant. What if cell phone batteries were standardized? Would these advancements still happen?

…standardisation may adversely affect new players

If battery swapping is separated from the vehicle business, it may need standardisation. A limited association of a few manufacturers and auto companies will adversely impact budding vehicle businesses, leading to consolidation. One or few market leaders will lay down their standards and make their vehicles interoperable with those standards. The process will inhibit innovations, monopolising the market, and ultimately inhibiting the growth of new players in the industry.

The scenario becomes much more hopeless if these companies (who will have a monopoly) are from abroad. India will get dependent on the import of technology, even as its manufacturers will suffer.

…will limit customer choices

Another argument against battery swapping is that if the option to provide swappable batteries is left to the auto manufacturers and in the way in which they design their vehicles, for instance, the battery standards will get fixed for interoperability. This will end up making it difficult to differentiate between the performances and experiences of one manufacturer over the other.

Further, the customer satisfaction parameter, an ultimate incentive for improving and maintaining the quality of any product, will be rendered useless for manufacturers as the customers too will be deprived of the choice or options that they want. In the worst case, safety norms may get ignored giving rise to avoidable accidents. The ultimate fear of course is that firms that have invested heavily in proprietary technologies like Tesla, GM or Volkswagen could simply refuse to be part of any such push, limiting customer choices and access to their technology further.

…swapping for cars is a challenge

India is the world’s largest producer of two and three-wheelers. Since two and three-wheelers account for 70-80 per cent of vehicles in the country, it is a minor sigh of relief for the country’s emission reduction efforts. Yet, the car market can’t be ignored either.

The idea of Battery Swapping is not new. The German company Mercedes-Benz tried it in the 1970s but it did not succeed. The Israeli company Better Place reintroduced it in 2007 but it went bankrupt. Tesla showcased a battery swap system as early as 2013, claiming the capability to perform 90 seconds swap. Nine years since then, the company still does not offer this facility in any of its markets.

While it is right that the bigger adoption wave in India is for two-wheelers and three-wheelers, swapping may become an arduous task for the car market. It seems practical even as far as the three-wheel run is concerned, beyond which it becomes impractical. This is because the battery packs used in such vehicles are heavier and might require the use of robotics, with a dash of automation, to be successful. Electric car batteries can weigh over 500 pounds.

…higher demand at a time of pricey inputs

It is no secret that the prices of key raw materials for EV batteries have only risen, instead of falling as, any had hoped for, till 2020. The new reality of higher prices means that the extra battery production that a swappable battery ecosystem will demand will only lead to more batteries idling away; not a good idea if prices have to be brought down.