Battery Swapping Primer: A Viable Alternative to Charging Stations

Battery swapping can be a game-changer, bringing the world a few steps closer to electric vehicles. It has the potential to enhance the attractiveness of electric mobility by addressing both the early market purchase price disparities with conventional vehicles and, importantly, the recharging time challenges of electric vehicles (EVs). A swap station offers a fully charged battery to be swapped with a depleted battery for light-duty vehicles such as electric two-wheelers (E2Ws). That is one reason why the Battery Swapping Policy for EV’s in India has been so eagerly awaited.

Because of the greater utilization of each battery in the swapping model, swappable batteries reach their end of life earlier than batteries used by a single EV owner. This may further enhance the potential for faster rollout of more advanced battery technologies as they emerge.

How Big is the Market in India?

Battery swapping is ideal for E2W and E3W vehicles. Two-wheelers still is the most sought-after medium of commute in India. Sales of two-wheelers in April 2022 grew by 38 per cent from the same month the previous year to almost 1.2 million units. Out of that, the electric two-wheeler sales, in April 2022, increased to 49,166 units. This is a substantial year-on-year increase of 858 units from just 5,132 units sold in April 2021.

Ola electric is the leader taking the electric two-wheeler market by storm. Ola Electric registered dispatches of 12,691 scooters in the month of April, replacing Hero as the no.1 electric two-wheeler maker. Okinawa Autotech was at No. 2 with sales of 11,010 units. The former country’s leading manufacturer, Hero Motocorp, was no. 3, selling over 410,000 motorcycles and scooters in the month, out of which 6,576 units were electric, in April 2022.

Battery Swapping and the Consumers

While many things can be said regarding the battery swapping from a technological and business point of view, but it is crucial to know its inevitable implications on the end consumers. Consumers have several concerns while adopting electric vehicles. These include high costs of EVs, High battery replacement cost (need to change every three to five years with just about 1000-2000 charge cycles, with battery replacement cost for a high range E2W up to INR 45,000. Long charging times remain one of the major concerns. Battery swapping addresses some of these concerns with many other add-on benefits.

It minimises charge time which is its most important characteristic. The entire process of battery swapping for E2W takes three to five minutes, just like conventional refuelling at pumps. In addition, battery swapping decreases the load of the costliest component of an EV that is, its battery. Separating battery from EV reduces its cost substantially – 30-50 per cent. Efficient use of land is another important merit of using battery swapping in place of charging stations. A battery-swapping station requires a fraction of the land required for setting up a charging station. Since the battery is swapped and used in multiple vehicles, this also ensures efficient battery use.

The System of Battery Swapping

Consumers have to buy a vehicle without a battery, taking it on lease from an energy operator (EO). EO has outlets for the batteries from where it leases out the units to consumers. The only condition is that an EV user will have to sign up with a specific EO to swap batteries and visit an outlet of this specific EO each time. It then becomes the responsibility of an EO to ensure that charged batteries are available each time a user comes for a swap. For that to work, EO also has to ensure availability of centralised bulk chargers to charge these batteries. A strong transportation network is required connecting each swap outlet across the city.

Economics of the System

To price the services that EO offers, various points need consideration such as the cost of electricity to charge the batteries, depreciation of batteries over time, fixed cost of swapping outlets and bulk chargers, the operational cost of swapping outlets and charging stations, transportation/logistics of batteries, if any, and built-in own profits. Availability of batteries must be at least 1.5-2 times the number of vehicles to ensure the smooth functioning of swapping outlets.

Considering everything, setting up a battery-swapping station requires an investment of about INR 7-8 lakh per station, excluding battery costs. Number of batteries and their costs depends on number of EVs dependent on that station in any given period of time. Generally, on a ballpark basis, EOs put one station for every 20 vehicles.

Various stakeholders in the battery swapping space include EO, real state owners, third-party swapping outlet operators, OEM, and power companies. The major share of this revenue goes to the Energy Operator because EO takes the maximum risk of setting up swap stations and bringing in the requisite technology and patents. The balance is shared amongst all the other stakeholders.

Battery Swapping Companies in India

Companies providing battery swapping services in India are Sun Mobility, Ola Electric, and Numocity from Bengaluru; Lithion Power, BatterySmart, ChargeUp, and Okaya Power Group from Delhi; Voltup from Mumbai; Esmito from Chennai are others.

Gogoro is the company behind Taiwan’s booming two-wheeler battery swapping ecosystem. Since its founding in 2011, Gogoro’s “Swap & Go” battery swapping solution has become ubiquitous in Taiwan. Recently, Taiwan said all new passenger cars and scooters will have to be zero emissions by 2040. Currently, Gogoro Network is hosting 330,000 daily battery swaps, with over 450,000 battery swap subscribers. About 95 per cent of all-electric two wheels scooters in Taiwan use Gogoro battery swapping.

Gogoro is now bringing the concept of battery swapping to the world. The firm entered the Indian market with a partnership with Hero Motocorp. It has also announced a partnership with Yadea and DCJ to enter China. Partnering with Gojek, Gogoro added Indonesia to the list as well.

Cost of battery swapping for Consumers

The energy operator usually charges a customer based on the KWh of energy used. In the present scenario, battery swapping charges could be around Rs250 per swap to the customers.

In another case, Bounce Infinity is proposing its product with a business model wherein customers can buy an E2W outright, complete with a battery, like other electric two-wheelers out there. Customers have an option to buy the ‘Battery as a Service’ (BaaS) as well. This allows customers to pay just for the e.1 upfront, just around Rs 60,000, and then be charged every time they swap out for a fresh, fully-charged battery. Going another step ahead, customers may have prepaid or postpaid plans that bring down the cost per battery swap significantly. The Rs 85 that any user would pay without a plan comes down to below Rs 65 when the user has opted for a plan.

Proving the mettle of the concept, Bounce Infinity claims to have conducted over a million swaps on its shared mobility fleet of electric scooters in Bengaluru and Hyderabad. Several startups are pushing for the concept, while many big names are still sticking to charging stations. With India’s push for battery swapping through its recent efforts to standardize the concept, it’s highly likely that the startups will keep popping up. The concept may still have some time to flourish, but it doesn’t seem too far away.

Battery Swapping in Foreign Markets

China, one of the biggest markets for electric mobility, also introduced battery swap standards in 2021. Its Ministry of Industry and Information (MIIT) released the global auto industry’s first standards for swapping technology. These standards set forth minimum safety requirements for the battery and specify stringent on-road testing protocols and inspection rules for battery swappable vehicles. The Asian giant and EV leader is pushing hard for swappable batteries for EVs as a supplement to regular vehicle charging. Some of the companies – automakers Nio and Geely, battery swap developer Aulton and state-owned oil producer Sinopec – informed about their plan to establish a total of 24,000 swap stations across the country by 2025.

Nio, one of China’s top EV makers, plans battery-swapping services in the US by 2025. Apart from boasting 800 swap stations in China, the firm has just set up its first in Europe.

Many foreign countries are going towards ultrafast charging and discarded battery swapping. This requires significantly additional investments to build that infrastructure. Europe is one such market. Carmakers and fuel retailers have been combining to roll out fast-charging stations in the developed world.

While there exists no standard policy for battery swapping in the US. Startups like Ample are pioneering the concept. Ample aspires to close the gap between recharge of batteries and fueling conventional EVs substantially by swapping EV batteries instead of recharging them in cars. Earlier, the concept saw a setback when Tesla retreated from an early interest in the idea.