Why Battery Swapping is a Catalyst for India’s Electrification Drive

With electric vehicles (EVs) emerging as a cornerstone of the nation’s decarbonisation strategy, innovative solutions are essential to overcome barriers and accelerate adoption. Union Minister Shri Piyush Goyal recently highlighted battery swapping’s role in complementing traditional charging infrastructure, envisioning a future where EV adoption becomes a “people’s movement.”

Battery swapping, a game-changing approach, offers speed, efficiency, and affordability, addressing critical adoption challenges. Further, the Ministry of Power has notified the “Guidelines for Installation and Operation of Battery Swapping and Battery Charging Stations” and the “Amendment in draft Guidelines for Installation and Operation of Electric Vehicle Charging Infrastructure-2024”.

The amendment includes treatment of swappable infrastructure at par with the fixed charging infrastructure. These guidelines will be instrumental in in deploying swap stations at par with fixed charging infrastructure at the state level. With the battery-swapping market projected to reach $20 billion by 2030, India has a unique opportunity to revolutionise its transportation landscape, reduce its carbon footprint, and move closer to its goal of energy independence by 2047.  

The Case for Battery Swapping

Electrifying heavy commercial vehicles (HCVs), including buses and trucks, presents a significant challenge in India’s EV journey. Despite comprising less than 5% of the vehicle population, this segment contributes nearly 50% of transport-related emissions. Key barriers to electrification include high entry barrier, limited charging infrastructure, battery technology obsolescence, its performance concerns, and lengthy charging times.

Battery swapping offers a transformative solution by drastically reducing upfront costs—batteries constitute nearly ~40% of a vehicle's price—making EVs more affordable for India’s fragmented fleet operators, 90% of whom own fewer than ten vehicles. Decoupling batteries from vehicles alleviates obsolescence concerns by shifting financial and technological risks to swap operators and enhances productivity by ~30% with under three-minute swaps. Swap-enabled trucks are particularly advantageous for closed-loop operations like ports, cement, and mining, where vehicles operate up to 22 hours a day, requiring rapid energy replenishment. 

Despite its immense potential, the battery-swapping ecosystem in India is still at a nascent stage, hindered by significant policy gaps that need urgent attention. The absence of technology-agnostic frameworks often excludes swap-enabled vehicles from public tenders and subsidy programs, creating an uneven playing field.

High GST rates on batteries and swapping services add financial barriers to the end consumers, who are primarily from unorganised sector and low-income background. Additionally, insufficient incentives for private players and swapping stations further slow progress. Addressing these issues through comprehensive, forward-looking policies can unlock the transformative power of battery swapping, driving India’s electrification and sustainability goals.

Policy Support: Enabling Battery Swapping at Scale

For battery swapping to reach its full potential, policy support must bridge existing gaps and establish a robust framework for adoption. One of the most pressing needs is creating a level playing field. Currently, swap-enabled vehicles and battery-swapping stations are excluded from many government tenders.

Technology-agnostic tenders and demand side incentives, particularly under initiatives like PM E-Drive, must be introduced to ensure that swap-enabled vehicles are not left out. Subsequently, private operators, who have prior experience of running buses should also be allowed to participate in the government tenders.

The Ministry of Heavy Industries (MHI) should guide Convergence Energy Services Limited (CESL) in including swap-enabled vehicles in future tenders, allowing broader participation and more competitive pricing for State Transport Undertakings (STUs).

Inclusion of swap-enabled trucks should be included in the INR 500 crores earmarked under PM E-Drive for electric trucks. This will ensure the end consumers have the option to choose from a wider variety of technologies based on their use-cases. Additionally, toll fee waivers for every state's first 10,000 electric trucks can offset high operating costs, providing a significant incentive for early adopters.

Tax reform is another critical intervention. Currently, batteries are bought at 18% and when they are integrated with vehicle, they are sold at 5%. Also, battery-swapping services attract an 18% Goods and Services Tax (GST), whereas fixed-battery EVs charged at own premises attract no GST.

This disparity creates a financial barrier for the end-users of swapping services who primarily belong to the lower-income groups. Reducing GST on swapping services to 5% would address this imbalance and encourage widespread adoption of Battery as a Service (BaaS) and Energy as a Service (EaaS) models.

The battery swap stations given their myriad advantages for the end users should also be included in the Rs 2000 crore earmarked in PM E-Drive for deploying charging infrastructure. Deployment of charging infrastructure can be done on a Public-Private Partnership (PPP) basis on India’s seven major freight routes and 200 tourist circuits will facilitate electrification ~50% of total freight and passenger vehicles. These corridors should be prioritised for infrastructure rollout to ensure seamless connectivity and reliable operations for commercial EVs. 

Lastly, urban policies must be aligned to support electric trucks, particularly in addressing restrictions imposed on diesel vehicles. With many Indian cities imposing entry limitations during peak hours or within low-emission zones, offering unrestricted access to zero-emission electric trucks presents a transformative opportunity.

This shift not only positions electric trucks as the preferred choice for last-mile delivery and intra-city freight transport but also catalyses a broader transition toward clean mobility. By aligning regulations with sustainability goals, cities can unlock the full potential of electric trucks to reduce emissions, improve air quality, and enhance the efficiency of urban logistics.

The Path Ahead

India's ambition to achieve energy independence by 2047 and reduce transport-related emissions hinges on adopting bold, innovative solutions like battery swapping. Companies like SUN Mobility are already demonstrating the feasibility of scalable, modular battery-swapping systems for various commercial vehicles.

With the proper policy framework, battery swapping can unlock unprecedented opportunities in India’s EV ecosystem. It can potentially reduce emissions from heavy-duty transportation, strengthen energy security, and position India as a global leader in green mobility. Now is the time to act decisively and embrace battery swapping as a cornerstone of our electrification journey.
 

Ashok Agarwal is  CEO & HEV at SUN Mobility. Views expressed are personal.