Budget 2022-2023 Impact on Automobile Sector: Specially New EV Battery Swapping Policies Launched, Trends and Business Opportunities

 Electric vehicle battery swapping is a place at which an electric vehicle's discharged battery or battery pack can be immediately swapped for a fully charged one, eliminating the delay involved in waiting for vehicle's battery to charge. Battery swapping stations offer a quicker solution to address range anxiety, where each battery swap takes less than 10 minutes and requires much smaller space to install compared to charging stations. In addition, battery-as-a-service (BaaS) is another solution gaining traction in the battery swapping industry, given its impact on reducing high upfront price of electric vehicles by separating battery ownership. Moreover, battery swapping reduces down-time and acquisition cost of a vehicle as customer pays only for the energy. 

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Rapid spread of COVID-19 had a significant impact on the global automotive industry, with a downturn in demand for new and old vehicles. Impact of the current global economic conditions and market sentiment directly affect business of key players. Although, many challenges lie ahead, coronavirus could accelerate some beneficial trends. For instance, electrification is expected to increase in select segments, such as two-wheel (2W) and three-wheel (3W) vehicles, and shared mobility could also increase, owing to growth of various use cases such as last-mile delivery, ride hailing, and rentals. As they prepare for the future, a solid understanding of changed landscape can help OEMs and other stakeholders update their strategies for the electric vehicle battery swapping market.  

Rise in demand for electric vehicles, coupled with lack of adequate public charging facilities and reduced time for electric vehicle charging are anticipated to drive the market growth. However, differentiation in battery technology and design and high initial set-up and operating cost of battery swapping station hamper the market growth. Further, rapid emergence of shared e-mobility and introduction of innovative & advanced battery swapping model and services by market players are some of the factors that are expected to offer lucrative opportunities for the electric vehicle battery swapping market growth during forecasted period.

In order to scale, promote and use electric vehicles in the country, Union Finance Minister Nirmala Sitharaman on Tuesday announced that a policy for the battery as a service or battery swapping is being prepared and deployed. The announcement was done in the Budget speech of 2022.

During the speech she said, for setting up battery stations at a mass level a battery swapping policy will be brought and interoperability standards will be formulated. With this private players will be encouraged to develop sustainable and innovative models for the battery as a service which will increase efficiency in the electric vehicle ecosystem.

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