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Why Battery Swapping Is the Ideal Choice For Commercial Electric Two-Wheelers

Why Battery Swapping Is the Ideal Choice For Commercial Electric Two-Wheelers

Research shows that by 2024, electric two-wheeler penetration is expected to be 12-17% of new vehicle sales

Battery swapping makes sense, both from a solution point of view and an economic standpoint. It's an innovative solution that addresses significant deterrents to EV adoption like range anxiety, high up-front costs, and long wait times

It presents a promising choice for electric two-wheelers, especially in commercial use-cases

India’s commercial two-wheelers segment has witnessed a boom since the pandemic, with more delivery service operators and players in the market. In fact, the growing two-wheeler segment has attracted the interest of many players in the EV sector. Sales are on the rise due to lower operating costs, making them a better option than ICE (Internal Combustion Engine) vehicles. Battery swapping is also opening up new avenues when it comes to the 2W market in India. Research now shows that by 2024, electric two-wheeler penetration is expected to be 12-17% of new vehicle sales. 

India’s electric mobility revolution is a defining step towards fighting climate change and reducing our carbon footprint. The significant rise in fuel prices, coupled with the government’s latest incentives and schemes for EV owners, is leading to rapid growth in the Indian EV market — with new solutions and technology emerging every day. The market is expected to grow at a CAGR of 44% from 2020 to 2027, with annual sales hitting 63 Lakh units by 2027. It is also encouraging to hear the Budget 2022 include an upcoming policy on battery swapping. Furthermore, reducing the GST on batteries from the present 18% will aid EV adoption as it will make batteries and electric vehicles more economical.   

Battery Charging Is An Expensive And Time-Consuming Task

Traditional battery charging requires high upfront expenditure. Downtime of 3-4 hours makes it quite unfeasible for the commercial segment.  While one can charge an EV at home with a regular household socket, the time taken to charge the battery fully lies anywhere between 5-10 hours. Even the rarely available fast-charging stations take at least an hour to charge a vehicle. The lack of park and charge facilities, especially in Tier I and II cities, further dissuade drivers from adopting EVs.   

Battery Swapping Is Transforming The Future Of Electric Mobility  

Battery swapping makes sense, both from a solution point of view and an economic standpoint.  It’s an innovative solution that addresses significant deterrents to EV adoption like range anxiety, high up-front costs, and long wait times.  And it presents a promising choice for electric two-wheelers, especially in commercial use-cases.  

Battery-As-A-Service Model (BaaS) 

India is a cost-conscious market, and a major obstacle standing in the way of EV adoption is the high upfront cost of purchasing new batteries, which amounts to 40% of the total cost of a vehicle. It is also a recurring expense.  With BaaS, EV owners can avail a specific number of swaps per day, week, or month across a vast network of swapping stations.  

Batteries are owned by the swapping service providers and not by individual drivers, significantly lowering ownership costs and the upfront investment.  Swapping also offers drivers freedom from buying/replacing their batteries with new batteries every 2-3 years.  

Simple Two-Minute Swaps  

The high downtime associated with battery charging is detrimental for commercial two-wheelers as it results in a loss of income.  Battery swapping is fast and straightforward. Drivers can head to a swap station multiple times a day to replace their discharged battery with a new, fully-charged one — all of which takes place in less than two minutes.  These batteries are lightweight and can be easily picked up and swapped.  With downtimes significantly cut down, drivers can do more each day, increasing their earnings.  

Scalable Infrastructure 

Compared to charging points, battery swapping infrastructure is easier to set up as even small mom-and-pop shops can host a swap station.  These stations function like automated kiosks that house 6-10 batteries and keep them fully charged. Locating swap stations is made simple via a mobile app that connects to the vehicle and monitors the charge left on batteries. This app also alerts riders when their battery is low and will provide them with directions to the nearest swap station. 

Beyond India: 2W Battery Swapping Model 

China and Southeast Asia are seeing a flourishing battery swapping market for 2-wheeler EVs. Successful companies to adopt the model include Gogoro in Taiwan, YiQi Exchange, and E-Huandian in Mainland China. 

They have been able to grow by offering simple and customizable battery swapping plans. To reach the maximum number of customers, they have tied up with OEM makers like Yamaha, Hero, and Suzuki, as well as institutional customers like Meituan Dianping and Ele.me. Gogoro has expanded internationally to Japan, France, Spain, and Germany — serving over 280K battery swaps every day with a network of over 2,200 stations. E-Huiandian is serving more than 600K battery swaps every day and has over 8K battery swapping stations in China. Both operators combined have completed over 500 Mn battery swaps since their inception.

Beyond India: 4W Battery Swapping Model

Battery swapping for electric cars is also picking up steam in China and USA. NIO is leading the market for electric cars in China – with 700 battery swap stations installed as of Dec 2021 and 5.3 Mn battery swaps on its network. 

Ample is an upcoming San Francisco-based startup that is working to make it a reality for electric cars in the USA. It has partnered with Uber to offer 15-minute services to its drivers in California.

For India’s two-wheeler EV market to continue growing, original equipment manufacturers (OEMs) must establish partnerships with charging and swapping companies to boost sales and relieve users from range anxiety. Tying up with other players in the space will enable OEMs to reduce upfront costs and eliminate sticker shock for consumers, leading to increased infrastructure, sales, and adoption.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.