Need For Speed: Quick Commerce-Led Boom Fuels 60% Revenue Growth For EV Startup Battery Smart

On a typical day in any Indian metro, you can’t help being witness to the startling acrobatics of uniformed bikers snaking through the maze of traffic. Orange, red, violet, yellow – the shades of their uniforms tell us how 10-minute delivery has powered India’s 10 Mn-strong gig economy. 

As quick commerce scoots into India’s fast-paced life, green vehicles – EVs, to be precise – run into the fast lane and the battery evolves from a mere commodity to a critical element for the momentum to sustain. Battery-as-a-Service (BaaS) has become a $2.74 Bn disruptor, poised to create a $5.60 Bn market in the next five years, for the logistics space as time and cost seem precious like never before.

BaaS is not just about recharging the battery. As time becomes indispensable in this plug-and-play era, battery swapping has come into play for both two-wheeler (2W) and three-wheeler (3W) EVs. It takes 3-5 hours to recharge a drained battery, while swapping it with a fully charged one takes just a few minutes. 

“It’s a smarter way of saving on both time and cost,” said Pulkit Khurana, whose Battery Smart has been an early bird to catch the worm. “Seven out of 10 battery swaps across India’s 2W and 3W commercial EVs are being done by us,” he told Inc42.

Khurana and his fellow IIT Kanpur alumnus Siddharth Sikka set up Battery Smart in Gurugram in 2019 – long before the whiffs of a potential market reached a corporate giant like Reliance. In these five years, Battery Smart has raised more than $130 Mn in funding that includes a $65 Mn Series B raise in May 2024, led by investors like MUFG Bank, Panasonic, Ecosystem Integrity Fund, Blume Ventures, and British International Investment.

Inc42 exclusively reported that Battery Smart has just raised an additional $29 Mn in an extended Series B round, led by  New York-based private equity firm Rising Tide Energy and other investors. 

The company has not yet utilised the capital it raised last year and aims for strategic expansion of battery swapping stations in areas where the demand is high. As of March 2025, it expanded to 41 cities with over 1,500 swapping stations.

By the end of May, it plans to reach out to more than 50 cities across Tiers I, II, and III, leveraging a partner-led model where local businesses like mom-and-pop stores can operate the swapping stations from a 150–200 Sq Ft area, said the founder. The startup supplies the batteries to local stores, provides them with training modules, and offers them a commission in return. 

It’s two-way traffic. While Battery Smart showed a smarter way to make the best use of EVs, the rise in EV sales, in turn, stoked the need for battery swapping facilities as India matured to the age of quick commerce. 

How Quick Commerce Turned A Growth Engine

Gigs and 3 W Auto drivers make up 100% of the customer base so far for Battery Smart. The workers are primarily quick commerce or e-commerce delivery partners and three-wheel EV riders. According to Khurana, partnering with food delivery and quick commerce platforms has been pivotal to gaining access to consumers, essentially the delivery partners. 

The Battery Smart CEO believes that there is such a large commercial use case where the value proposition is far more important because this is linked directly to their earnings. “So we would definitely want to serve them first before we start serving personal use cases,” he said. 

But how do gig workers save both time and money by swapping their batteries? There are two ways, explained Khurana. First, acquisition or purchase of an EV with a swappable battery is 40-50% cheaper than EVs with fixed batteries. “This saves on the initial investment,” he said. 

Second, the range offered by a battery fully charged for 3-4 hours is 70-100 km. “Recharging is counterintuitive for fleet riders and drivers, forcing them to halt their operations. If they opt for a swappable battery, they can easily get a new battery for INR 60-70.” Recharging the batteries costs anywhere between INR 70 and INR 140, depending on whether this is done at home or through fast charging at stations.

Battery Smart has standardised the cost of swappable batteries to INR 1 for 1 km range covered. “And the range with the prices being offered is still half of what petrol-run 2Ws offer,” the CEO said. 

More than the tie-ups with the ecommerce or food delivery platforms, what is crucial in an industry like this which caters to commercial vehicles is battery health, longevity, maintenance and accessibility to local battery swapping networks. 

“I think platform tie-ups are hugely overrated. For building a swapping network, what you need the most is your physical presence, where are you opening your stations next, and how accessible they are to your customers,” Khurana said.

He mentioned that for an average gig worker whose earnings are limited it is important how effective these batteries are in terms of consistent performance which makes them choose your networks.

Battery Smart sources the batteries from manufacturers, then tries them out with original equipment manufacturers (OEM) for size, range and other parameters and interoperability, which means one type of battery can be used in various OEM-owned EVs. 

How Partnerships With OEMs Emerged Crucial

At the core of the partnership with original equipment manufacturers lies interoperability. In fact, the entire concept of battery swapping is woven around this. 

Battery-run EV production in India is expected to zoom nearly three-fold to 377,000 units by the end of 2025, as major launches from Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors, and JSW MG Motor captured a 6.6% share of the automobile market. The PM E-Drive initiative is also expected to play a critical role in setting up a long-term EV foothold in the market. 

“There is no exclusivity in OEM partnerships because of fewer players in the battery swapping space,” the Battery Smart CEO said.

Rival Sun Mobility has announced partnerships with quick commerce, ecommerce and OEMs for interoperability. “We don’t go for exclusive partnerships with OEMs. We have tied up with 100 vehicle manufacturers. In case we enter into an exclusive contract, we will have access to only their set of customers or riders.” 

Interoperability in India, however, faces a challenge from the lack of universal battery standards. It means each OEM may use proprietary battery designs. Partnerships with OEMs allow the swapping platforms to test and ensure their batteries work seamlessly with different 2W and 3W models so that drivers or riders can swap their batteries regardless of the vehicle brand. “The batteries must be compatible with the vehicles they power, requiring specific designs, sizes, connectors, and software protocols,” Khurana said. 

What Paved The Way For A 60% Surge In FY25 Revenue 

Heightened investor interest and expansion overdrive pushed the revenue for Battery Smart by approximately 60% on-year in FY25, the CEO told Inc42. It had jumped three-fold to INR 164 Cr in FY24, but its losses more than doubled to INR 140 Cr, primarily because its expenses ballooned 162% to INR 327 Cr. 

Khurana pointed out that in a cost-intensive sector like battery swapping, marketing and advertising expenses do not account for a major portion of the costs. “If you look at our line of expenses, you will see that depreciation expense is dragging our profits down, otherwise we are fairly operationally profitable.”

Depreciation expense is a non-cash expense that reduces the value of a fixed asset like the equipment or a building over its useful life.

“We do not spend a lot of money on customer acquisition, instead, we invest in batteries. The majority of the batteries being utilised are owned by us. The second biggest investment goes towards technology that we are building from the ground up,” he said. 

Unlike other sunrise sectors, battery swapping doesn’t have a lot of parallels in the West that could be utilised in deploying the technologies and hence there is a lot of emphasis on building native technology.

Khurana said that at the battery swapping station level, the company has improved its unit economics significantly. “Two years ago, the company was barely breaking even, but it now achieves a high-teen Internal Rate of Return (IRR) on every battery or infrastructure-related capex, indicating strong returns on investments.” 

Battery Smart has had success in repeated fund-raising bids. Investor interest in the company too is on the rise, but it is yet to consider a public issue. “I think we are still a fairly young company to go for a listing. A majority of the startups that have gone public have been around for nearly 8-10 years,” Khurana said.

How Does The Road Ahead Appear ?

Electric motorcycles, scooters and rickshaws have begun replacing oil-guzzlers on Indian roads, turning the home to the world’s largest population into a market poised to create a $132 Bn opportunity by 2030, estimates an Inc42 report, as India gears up to go net-zero by 2070. 

For the momentum to stay the course, the country needs more than 26,000 swapping kiosks by the end of FY26 and roughly 111,000 by FY30, when the battery swapping market is projected to average a 25.4% annual growth rate to reach $68.8 Mn by 2030. The Ministry of Heavy Industries earlier this month announced an INR 2,000 Cr budget to set up 72,000 EV charging stations across India. 

But the primary growth driver for the battery swapping companies continues to be the disruptive 10-minute deliveries. Swiggy, for instance, last month outlined a goal to switch to a 100% electric fleet by 2030, while rival Zomato too has similar plans. “It’s very, very critical that the drivers are able to get their batteries in 3 minutes to 5 minutes,” Bloomberg quoted Abhinav Sinha, the head of technology and telecoms at British International Investment, the UK government’s development finance unit and an investor in Battery Smart, as saying. “Every minute lost is an earnings loss for them.”

“It’s yet to hit the trajectory,” Battery Smart CEO Khurana said, pointing out that only 3% of the EVs, especially 2Ws and 3Ws, currently use swappable batteries. “There is definitely a huge total addressable market (TAM) and digital commerce enabled employment has revolutionised our industry too.” 

There are some inevitable hurdles along the way for battery swapping in India. While battery degradation remains a cause for concern, lack of battery standardisation often makes interoperability difficult. Establishing swapping stations in Tier II  and III cities also have their own logistical challenges. Safety is a major factor when it comes to EV batteries. The huge cost of precision engineering sends operational costs soaring, which is added to the cost of constant upgrade of technology. 

For Battery Smart, getting strategic investors on board, successive capital infusion and crucial OEM partnerships have so far propelled it to the leadership position with a 70% share of the battery swapping market. “We have been able to face the hurdles with our growth blueprint and rise of quick commerce. As India’s digital economy grows and the government pushes for decarbonising industries, we don’t see any reason for a slowdown soon,” said the Battery Smart CEO. 

[Edited By Kumar Chatterjee]