Budget 2022: a boost to electric vehicle ecosystem in India

Over the last year, the EV industry has experienced tremendous growth. The government is aware that moving to EVs is the way forward in the mobility sector.

Thus we commend the Hon’ble Finance Minister’s announcement of the battery swapping and standardization process.

The Budget 2022 introduces policies to facilitate battery swapping and make interoperability standards possible. The approach will solve the tedium of setting up charging stations in spatially challenged urban confines. 

But only a small number of brands are likely to benefit from the move. 

Hero Electric and Okinawa Motors were among the first to adopt swappable battery technology. Some manufacturers, including Ather Energy, declined to comment on the budget.

Budget 2022 Reactions by industry leaders:

Naveen Munjal, chief executive officer of Hero Electric:

“This move will open up avenues for further growth and development of the EV and energy sector in the country. Hero Electric has always been a strong advocate of automating EV battery packs to accelerate EV adoption.”

According to Mr. Munjal, the interoperability standards will help address range anxiety issues, and battery swapping stations will be an asset to the evolving EV ecosystem across the country.

“The announcement of the PLI scheme (production-linked incentive) focusing on solar modules, as well as the launch of sovereign green bonds to create a carbon-free economy is a major step forward in keeping with the Honourable Prime Minister’s Net Zero (emissions) commitment by 2070”, he added.

Vivekananda Hallekere, CEO & Co-Founder, Bounce:

“Government and policymakers have recognized battery swapping as the most effective solution to accelerate EV adoption in India.”

“We believe this move in Union Budget 2022 can enable affordable and clean mobility at scale. At Bounce, we are nearing a million battery swaps already, and the Hon’ble Finance Minister’s announcement ties in with our vision that clean, affordable mobility is a fundamental right”, he said.

Jeetender Sharma MD & Founder, Okinawa Autotech:

According to him, introducing the battery swapping policy to improve the country’s EV infrastructure is a positive step to address the range anxiety issue. This could be one of the impediments to a mass-market transition from internal combustion engine-based vehicles to electric vehicles.

PB Balaji, Group CFO at Tata Motors:

Plans to create EV charging infrastructure, including national policy for battery swapping, which, combined with the already announced Automotive PLI scheme, furthers the agenda for green mobility.

Martin Schwenk, MD & CEO at Mercedes-Benz India:

This Budget is overall growth-oriented with a clear focus on digitization, electrification, infrastructure development, and ease of doing business, aiming to propel the long-term growth of the Indian economy. 

Battery-swapping announcement in budget 2022 is a step in the right direction and will help a limited segment of consumers. To develop electric mobility for passenger vehicles, we must take a broader, more holistic view.

Suhas Rajkumar, CEO & Founder at Simple Energy:

It is heartening to determine that the govt is watching transitioning to EVs at a faster pace. Although battery as a service may be implemented for certain areas only, encouraging the private sector to form sustainable business models could be a welcome move. 

The impetus should tendon developing safer battery packs as swapping stations can not be applied to direct consumers given the security aspect as this can further make the ownership of the vehicle complex.

Aravind Sanka, Co-founder, Rapido

Two major takeaways from the budget first are the importance of multi-model public transportation experience with the primary mile & last mile as well.

Rapido will play its role in encouraging multi-model and connecting to public transportation the maximum amount as they can.

“The second is to extend the EV adoption developing with the policy and battery swapping; I feel this is an amazing move.”

Maxson Lewis, Managing Director & CEO, Magenta:

The introduction of a battery swapping policy and interoperability standards will go a long way in building the use cases. 

The fact that the government will also formulate interoperability standards to improve the efficiency of EV business is a good indication and will support the growth of the infrastructure.

What was missed was an explicit statement of the extension of the FAME scheme and how it can support the expansion of the charging network in India to help facilitate the switch from petrol and diesel-based vehicles to EVs.

Sohinder Gill, director-general of the Society of Manufacturers of Electric Vehicles:

“We truly welcome the announcement by the honorable Finance Minister. The budget 2022 has a huge impact on the electric vehicle industry. The battery swapping policy and recognizing battery or energy as a service will help to grow EV infrastructure and extend the use of EVs in public transportation.”

He also stated that the announcement would create new avenues for brands to venture into the business of battery swapping. Additionally, creating special clean zones will further accelerate the adoption of EVs and spread awareness amongst the citizens.

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