Draft Battery Swapping Policy

Draft Battery Swapping Policy

News: Recently, the NITI Aayog released the draft battery swapping policy for Electric Vehicles (EVs) in the country.
• The policy aims to improve the efficiency of the battery swapping ecosystem for electric scooters and three-wheeler electric rickshaws, thereby driving EV adoption.
• As per the draft policy, all metropolitan cities with a population above 40 lakhs will be prioritized for the development of a battery swapping network under the first phase.

Battery Swapping:
• It is a mechanism of which involves exchanging discharged batteries for the charged ones. It provides flexibility to charge these batteries separately and keeps the vehicle in operational mode with negligible downtime.
• Battery swapping is generally preferred for two wheelers’ and three wheelers’ with smaller batteries that are easier to swap.

Features of Draft Policy:
• As per the draft policy, battery swapping will fall under the Battery-as-a-Service (BaaS) business model, and such models would have to ensure interoperability between EVs and batteries for a successful mainstreaming of battery swapping as an alternative.
• This Policy stipulates the minimum technical and operational requirements that battery swapping ecosystems would need to fulfil, to enable effective, efficient, reliable, safe, and customer-friendly implementation of battery-swapping infrastructure.
• Providing direct and indirect financial support to Battery Providers (for the cost of batteries) and EV users.
• The draft policy has suggested that the Goods & Services Tax Council considers reducing the differential across the tax rates on Lithium-ion batteries and electric vehicle supply equipment. Currently, the tax rate on the former is 18% and 5% on the latter.
• The policy also proposes to assign a Unique Identification Number (UIN) to swappable batteries at the manufacturing stage to help track and monitor them.
• The Bureau of Energy Efficiency (BEE) is the Central Nodal Agency responsible for the rollout of EV public charging infrastructure and will be responsible for the implementation of battery swapping networks across the country.

Need for the Policy:
• EVs are traditionally purchased with “fixed” batteries which can only be charged using the power supply while housed within the EV.
• Adequate, affordable, accessible, and reliable charging networks are a prerequisite for mass EV adoption.
• While developing charging infrastructure takes a significantly longer time and there are limitations as well in getting required space in urban areas. Thus, the government in Budget Speech 2022-23 had announced that the Centre would introduce a battery swapping policy and interoperability standards in order to improve efficiency in the EV ecosystem.

Government initiatives:
• The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Phase II scheme which was supposed to end in March 2022 was extended up to March 2024.
• PLI scheme for manufacturing Advanced Chemistry Cell (ACC) batteries in 2021.
• PLI scheme covering EV startups was also approved for automotive sector with budgetary outlay.