Draft Battery Swapping Policy

NITI Aayog has prepared a draft battery swapping policy, under which it has proposed offering incentives to electric vehicles (EVs) with swappable batteries, subsidies to companies manufacturing swappable batteries, a new battery-as-a-service business model, and standards for interoperable batteries, among other measures.

What is battery swapping?

• Battery swapping is a mechanism that involves exchanging discharged batteries for charged ones. This provides the flexibility to charge these batteries separately by de-linking charging and battery usage, and keeps the vehicle in operational mode with negligible downtime.
• Battery swapping is generally used for smaller vehicles such as two-wheelers and three-wheelers with smaller batteries that are easier to swap, compared to four-wheelers and e-buses, although solutions are emerging for these larger segments as well.

What are some of the key proposals?

• The draft policy has suggested that the GST Council consider 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 per cent, and 5 per cent on the latter.
• The policy also proposes to offer the same incentives available to electric vehicles that come pre-equipped with a fixed battery to electric vehicles with swappable batteries. “The size of the incentive could be determined based on the kWh (kilowatt hour) rating of the battery and compatible EV,” the draft policy states.
• The government will also specify a minimum contract duration for a contract to be signed between EV users and battery providers to ensure they continue to provide battery swapping services after receiving the subsidy.
• The policy also requires state governments to ensure public battery charging stations are eligible for EV power connections with concessional tariffs. It also proposes to bring such stations under existing or future time-of-day (ToD) tariff regimes, so that the swappable batteries can be charged during off-peak periods when electricity tariffs are low.
• Transport Departments and State Transport Authorities will be responsible for easing registration processes for vehicles sold without batteries or for vehicles with battery swapping functionality, the draft says. Municipal corporations will be responsible for planning, zoning permissions and land allocation for battery swapping stations.
• The policy also proposes to assign a unique identification number (UIN) to swappable batteries at the manufacturing stage to help track and monitor them. Similarly, a UIN number will be assigned to each battery swapping station. It also proposes to install battery swapping stations at several locations like retail fuel outlets, public parking areas, malls, kirana shops and general stores etc.