NITI Aayog releases draft battery-swapping policy

Policy targeted at electric two-wheelers and three-wheelers

April 21, 2022 08:06 pm | Updated 08:09 pm IST - NEW DELHI

To expedite large-scale adoption of EVs, the government think tank NITI Aayog on Thursday released the draft battery-swapping policy targeted at electric two-wheelers and three-wheelers, proposing incentives for electric vehicles with swappable batteries, subsidies to firms manufacturing swappable batteries, technical and testing requirements and reduction of GST, among other things.

Battery swapping involves exchanging discharged batteries for charged ones, delinking the vehicle and fuel and hence, reducing the upfront cost of the vehicles.

The draft policy, which comes amid rising concerns over safety of electric vehicles following a spate of incidents of electric two-wheelers catching fire, recommends prioritising all metropolitan cities with a population greater than four million for development of battery-swapping networks under the first phase (1-2) years, followed by all major cities such as state capitals, UT headquarters and cities with population greater than 5 lakh in the next 2-3 years.

Inviting stakeholder comments on the policy till June 5, 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, and will be reviewed and extended thereafter, as may be decided by the Ministry of Power.

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. “The size of the incentive could be determined based on the kWh rating of the battery and compatible EV,” it said.

To ensure battery safety and security of assets, swappable batteries will be equipped with advanced features such as IoT-based battery monitoring systems, remote monitoring and immobilisation capabilities, and other required control features. Further it has proposed that batteries will be tested and certified as per AIS 156 (2020) and AIS 038 Rev 2 (2020) standards for safety of traction battery packs, as well as additional tests that may be prescribed for swappable batteries.

“To ensure a high level of protection at the electrical interface, a robust/rigorous testing protocol shall be adopted to avoid any dielectric breakdown, arc phenomenon, or any unwanted temperature rise at the electrical interface,” it said, adding that BMS (Battery management system) of the battery must be self-certified and open for testing to check its compatibility with various systems, and capability to meet safety requirements.

For EVs with swappable battery functionality, vehicle OEMs shall be required to get ARAI approval for their vehicles to accept interoperable swappable batteries, it added.

Noting that as per the current Goods and Services Tax (GST) regime, 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.

Finance Minister in her Budget speech 2022-23 had announced that the Centre would be introducing a battery-swapping policy and interoperability standards in order to improve efficiency in the EV ecosystem.

According to an official statement, NITI Aayog held an inter-ministerial discussion to formulate a robust and comprehensive battery-swapping policy framework in February, along with an extensive pre-draft stakeholder discussion with representation from battery swapping operators, battery manufacturers, vehicle OEMs, financial institutions, think tanks and other experts.

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, it said, adding that vehicles with swappable batteries will be sold without a battery, providing the benefit of lower purchase costs to potential EV owners.

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