EV stakeholders welcome battery swapping policy and interoperability standards

In the Union Budget 2022 speech, Finance Minister Nirmala Sitharaman made a slew of forward-looking announcements for electric vehicles (EVs) — including battery swapping policy, creating special mobility zones, thematic funds for sunrise sectors, and government contribution for R&D in sunrise opportunities.

The government also expects an increase in the estimated expenditure for the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme to Rs 2,908.28 crore for FY22-23 as against Rs 800 crore estimated last year. 

Here’s how the EV industry reacted to the announcements made in the Budget 2022:

From industry leaders

Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV), said “Introducing battery swapping policy and recognising battery or energy-as-a-service will help develop EV infrastructure and increase the use of EVs in public transportation. It would motivate businesses engaged in delivery and car aggregation to incorporate EVs into their fleet.”

He added, “It will create new avenues for companies to venture into the business of battery swapping, and creating special clean zones will further accelerate the adoption of EVs and spread awareness among citizens.”

Saket Mehra, Partner and Auto Sector Leader at Grant Thornton Bharat, said, “The introduction of battery swapping policy towards energy transition and enabled charging infrastructure, opening R&D as a growth area for auto component manufacturers, and focus on public EV transport are major resolutions.”

Diego Graffi, Chairman and MD, Piaggio Vehicles India, said, “Larger battery swapping infrastructure will help enhance EV infrastructure and should propel the adoption of EVs.”

He added, “This encourages industry players to create sustainable and innovative business models for battery and energy-as-a-service, which will improve efficiency in the EV ecosystem and also generate employment opportunities as planned under the Make In India initiative.” 

Chetan Maini, Chairman and Co-founder, Sun Mobility, said, “Battery swapping technology addresses key challenges around upfront cost, range anxiety, and long charging time, enabling faster adoption of EVs.”

“As the policy unfolds, it would be great to see the government addressing key points around how customers can access subsidies currently available for EVs, range per charge criteria as swap batteries, by definition, are smaller and with less range, and GST for swapping services in line with EVs,” he added. 

Chetan said, “It’s encouraging to see steps being taken on interoperability standards. We are hopeful the process of innovation is not impacted while defining these new policies for the country, and look forward to working with the industry and the government to make this a reality.”

From startups

Amitabh Saran, Founder and CEO, Altigreen Propulsion Labs, an electric three-wheeler manufacturing startup, said, “There is a huge demand for last-mile delivery in the country, and the boost in ecommerce has fuelled the growth. The battery swapping policy portability will make vehicles more cost-effective, and the development of special mobility zones for EVs will add to and be the game-changers the sector needs.”

“These will provide a fillip to ecommerce delivery and three-wheelers, bound by time and space constraints. India has set a target of 30 percent EV sales penetration for private cars, 70 percent for commercial vehicles, 40 percent for buses, and 80 percent for two-wheelers and three-wheelers by 2030, and the Union Budget 2022 has definitely taken India a step ahead towards an electric future,” added Amitabh. 

Shailesh Vickram Singh, Co-founder, Massive Mobility, an EV charging solutions startup, said, “The interoperability of batteries will bring down the costs and open new opportunities in the market such as technology to mind the battery swapping, and most importantly, it can bring about an improvement in the capacity utilisation in the system, making operations to run smoothly, help with customer relation, and have more capital in the market.” 

Akshay Singhal, Founder and CEO, Log9 Materials, said, “The Budget addressed some of the pertinent concerns that had been slowing down the EV industry so far. Endorsing energy-as-a-service, the government has introduced a potent boost to the already ongoing pursuit for exhaustive charging infrastructure.” 

“Likewise, financial decoupling of the battery from the vehicle has, in principle, lowered the liability on customers who are keen on adopting the EV technologies. This also enables financial institutions to decouple their approach and criteria towards financing batteries as compared to the vehicle,” he added. 

The misses

Akash Gupta, Founder and CEO of Zypp Electric, a last-mile EV delivery startup, said, “Seamless and widespread charging infrastructure is the need of the hour to accelerate the EV revolution in the country. This will also help us achieve our vision of increasing our battery-swapping network from a few to over 5,000 across 100 cities in the next three years.”

“Meanwhile, the sector was expecting a more consistent GST slab with EV financing and incentives, which was a miss,” added Saket.

The industry expects a reduction in the GST, where EVs are taxed at 5 percent and batteries and charging or swapping infrastructure services at 18 percent.

“In addition, the duties should also be normalised between various components,” explained Shailesh. 

“We were looking for an announcement to extend the FAME-II scheme beyond March 2024 to give the industry a long term policy view. There is also a need to support vehicle finance schemes for EVs,” added Amitabh. 

According to Log9 founder, the government missed out on integrating EVs and batteries into the priority financing sector. “In the upcoming months, we would eagerly await the EV space to be considered as a part of the mainstream funding sectors as this would provide an additional boost toward meeting the 2030 goals,” he said. 

Pedro Pacheco, Senior Director Analyst, Gartner, said, “The announcement, per se, does not say much concerning concrete actions. Other governments around the world have also announced commitments to developing EV charging infrastructure.” 

“However, even with major public incentives, the growth of that infrastructure has been the Achilles Heel of electrification, given that there are many more dimensions besides the number of chargers such as location, technology, and the uptime,” he explained. 

“The government’s announcement is encouraging and aims at addressing gaps in terms of EV charging, but we need to wait and see what will be the real impact on the ground and how this policy direction will translate into concrete actions,” he added.

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