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Union Budget 2022: Good News For EV! Battery Swapping, Interoperability Standards To Be Notified

Union Budget 2022: Good News For EV! Battery Swapping, Interoperability Standards To Be Notified

India is undergoing a massive electric mobility revolution, and the move allows a greater push for various businesses that connect to the EV industry

While battery swapping is a resource and manpower-intensive project, it will be interesting to see how the new policies will deal with the problem

EV players want FAME and PLI to be more adaptable to allow smoother disbursements to help the industry invest in EV infrastructure

In a bid to promote cleantech in public transport, the finance minister announced India’s plans to come up with special mobility zones for electric vehicles as well as a battery-swapping policy during the Budget speech. Alongside the battery swapping rules, the government will also formulate interoperability standards to improve the efficiency of EV business.

India is undergoing a massive electric mobility revolution, and the move allows a greater push for various businesses that connect to the EV industry. Electric vehicles are the future and government policies have already played a role in ramping up adoption.

“Considering the constraint of space in urban areas for setting up charging stations at scale, a battery swapping policy will be brought out and interoperability standards will be formulated,” Sitharaman said during the speech.

The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service’. This will improve efficiency in the EV ecosystem, she added.

While some critics assert that storing charging and maintaining battery swapping packs would be far more complex and costly than simply connecting EVs to the existing electricity grid — making it a resource and manpower-intensive project, it is interesting to see how the new policies will deal with the problem.

The new policy is likely to positively impact startups operating in the EV infrastructure space such Battery Smart, RACEnergy, Lohum cleantech.

A Run Down ON EV Needs From Budget 2022

From a manufacturing point of view, the EV segment has complained about the under-utilisation of funds allocated under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II).

“The financing of Li-ion batteries and battery swapping stations is a hindrance currently. The upcoming policy on battery swapping should address the same through government incentives. The scope of subsidies under FAME should be enhanced and made applicable to batteries as well (and not linked to the EV),” Siddharth Sikka, cofounder, Battery Smart, told Inc42.

He added that reducing the GST on batteries from the present 18% will aid EV adoption as it will make batteries as well as electric vehicles more economical.

EV players want FAME and production-linked incentives (PLI) to be more adaptable to allow smoother disbursements to help the industry invest in EV infrastructure. The government should consider incentivising the consumers as well, EV stakeholders have emphasised.

The Rise Of Battery-As-A-Service Market

In May 2021, the government of India approved the PLI scheme worth INR 18,100 Cr for manufacturing ACC batteries to aid EV infrastructure companies focussed on EV charging stations.

“By 2025, forecasts expect up to 4 Mn of EVs could be sold each year, growing to almost 10 Mn by 2030. Any charging solution to serve this sector must be highly scalable, easily accessible by the public; it should support interoperability, and be affordable,” the scheme had read.

The current budget, eyes to build a low-capital intensive EV infrastructure and battery swapping services is the way to move forward.

Next From Union Budget 2022 – Big Boost For Startups, Ease Of Doing Business 2.0 To Be Launched

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