NITI Aayog Releases Draft Battery Swapping Policy

To expedite the large-scale adoption of EVs, the government think tank NITI Aayog released the draft battery-swapping policy.
The policy is targeted at electric two-wheelers and three-wheelers, proposing incentives for electric vehicles with swappable batteries.

Key Points

  • The draft policy recommends prioritizing all metropolitan cities with a population greater than four million for the development of battery-swapping networks under the first phase (1-2) years.
  • This will be followed by all major cities such as state capitals, UT headquarters, and cities with populations greater than 5 lakh in the next 2-3 years.
  • The document released by the think tank states that this policy will be valid from the date of its public notification till March 31, 2025.
  • The draft policy proposes that demand-side incentives offered under existing or new schemes for EV purchase can be made available to EVs with swappable batteries eligible under this policy.
  • Further, it has been proposed that batteries will be tested and certified as per AIS 156 (2020) and AIS 038 Rev 2 (2020) standards for the safety of traction battery packs.
  • For EVs with swappable battery functionality, vehicle OEMs shall be required to get approval for their vehicles to accept interoperable swappable batteries.
  • The tax rates on Lithium-ion batteries and Electric Vehicle Supply Equipment (EVSE) are 18% and 5% respectively.
  • The draft policy suggested that the GST Council may consider reducing the differential across the two tax rates.
  • The Bureau of Energy Efficiency (BEE), the Central Nodal Agency responsible for the rollout of EV public charging infrastructure, will be responsible for the implementation of battery-swapping networks across the country.

What is Battery Swapping?

  • Battery swapping is an alternative that involves exchanging discharged batteries for charged ones.
  • Battery swapping de-links the vehicle and fuel (in this case, the battery) and thereby leads to a reduction in the upfront cost of the vehicles.
  • Battery swapping is popularly used for smaller vehicles, such as two- and three-wheelers, which have smaller batteries that are easier to swap.
  • Battery swapping offers three key advantages relative to charging—time-saving, space-efficient, and cost-effective—provided each swappable battery is actively used.
  • Further, Battery swapping provides a level playing field to innovative and sustainable business models, such as ‘Battery as a Service’.
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