India Battery Swapping For Electric Two-Wheelers Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Indian battery swapping for electric two-wheelers market is expected to reach USD 27.14 billion, registering a CAGR of 18% over the next five years.

The COVID-19 pandemic had a mixed impact on the market during the first half of 2020. Due to the shutdown of manufacturing units and travel restrictions, sales of electric vehicles registered a decline. However, post the lockdown restrictions were eased, electric two-wheeler demand in India witnessed significant growth in 2020 and continued in 2021. With this increase in the adoption of electric two-wheelers, several players focused on the expansion of battery-swapping stations in major cities across the country.

Over the long term, the market is expected to grow due to factors like technological advancements in lithium-ion batteries, increased R&D expenditure by major players, and growing sales of electric two-wheelers across the world owing to emission norms. In addition, the Indian government has been focusing on battery swapping to improve the ecosystem for electric vehicles, leading to a positive outlook for the market.

For instance, in July 2022, the Indian government announced its plans of designing a roadmap to develop the required battery swapping and charging infrastructure along its highways as part of the efforts to propel a shift toward mass adoption of electric vehicles (EVs). The ministry has proposed that contracts for building charging centers include battery swapping stations.

Further, growing electric two-wheeler sales penetration also contributed to the growth of battery swapping stations in the country. Moreover, due to its impact on lowering the high upfront price of electric vehicles by decoupling battery ownership, battery-as-a-service (BaaS) is gaining traction in the battery swapping market. Such developments are expected to create an optimistic outlook for the market during the forecast period.

For instance, the Indian electric two-wheeler market noted a significant 206% year-over-year increase in September 2022, mostly due to increased public awareness and an incredible choice for consumers in all segments. For the calendar year (January - September), new electric two-wheeler registrations accounted for about 3.94% of the total new two-wheeler registrations in India. About 99,53,440 two-wheelers were registered, out of which 3,91,881 units were electrically powered.

While market expansion may be hindered by differences in battery technology and design, and the high initial setup and operational costs of battery swapping stations, the increasing usage of shared e-mobility, and the development of new and improved battery swapping models and services by market competitors are likely to provide the market with the opportunity to expand in the coming years.

India Battery Swapping for Electric Two-Wheelers Market Trends

Rising Focus of Manufacturers on Improving Lithium Ion Batteries Expect to Enhance Demand

Battery swapping for electric vehicles is expected to gain significant momentum over the coming years owing to rising consumer awareness about the benefits offered by it. Especially lithium-ion battery swapping solutions offer numerous opportunities for players operating in this segment in India as these swappable batteries address key challenges such as range anxieties and long refueling times. Such factors are expected to contribute to the growth of the market over the coming years. Further, with the rising penetration of lithium-ion batteries for electric two-wheelers in India, the key players operating in battery manufacturing lithium-ion are actively participating and contributing simultaneously to the growth of battery swapping in the country.

For instance, in September 2022, Renon, a Surat-based li-ion battery storage company, launched Groot, its smart swappable battery for electric two-wheelers. In order to build this li-ion battery pack, NMC chemistry is used. It is suitable for low-speed and medium-speed electric cars. This pack is made up of phase change material, which can be used for thermal management. In August 2022, Komaki, an EV company, announced the launch of fireproof batteries for India in response to the decline in sales of electric two-wheelers. According to the company’s website, it introduced LiFePO4 lithium-ion ferro-phosphate battery technology on the market. These batteries are fire-resistant.

Further, the development of lithium-ion batteries coincided with a higher growth rate in sales volume over the past few years. According to FADA, electric two-wheeler sales volume in India in FY2021 witnessed a surge of around 463.61% than FY2020 and around 831.20% in FY2020 to the previous year. Such an optimistic outlook for the market tends to offer new opportunities for lithium-ion battery manufacturers. It is expected to propel the development of battery-swapping stations in India in the future.

Growing Electric Two-Wheeler Sales in India to Augment Market Growth

Electric two-wheelers in India have witnessed significant growth in recent years. Cost-effective solutions offered by electric two-wheeler manufacturers and an increase in subsidies offered by the government to encourage faster adoption of electric mobility and battery swapping stations in the country, along with the launch of new models, are expected to increase electric two-wheeler (e-2W) penetration anticipated to augment the demand in the market.

For instance, in April 2022, Niti Aayog, the in-house think tank of the Indian government, released a draft policy for battery swapping (BS) for two and three-wheelers. The vision of the policy as stated in the draft is to catalyze the adoption of electric vehicles (EVs) by improving the efficient and effective use of scarce resources such as public funds, land, and raw materials for advanced cell batteries for the delivery of customer-centric services.

In July 2021, the government announced increased subsidies for electric two-wheelers in India and revised the timeline for the FAME II scheme until March 2024. Under the revised subsidy, electric two-wheelers can get INR 15,000 per kWh as a subsidy.

The Government of India, through various policies, has helped achieve sustainable mobility. By 2030, all government vehicles will be electric. By 2030, it plans to phase out all commercial fleets and supply vehicles powered by fossil fuels in every city. The coordination of consumers and commuters is necessary to implement these policies. With appropriate awareness and the rising penetration of electric two-wheelers across the country over the coming years, it poses attractive opportunities for players operating in the battery-swapping segment in India.

India Battery Swapping for Electric Two-Wheelers Market Competitor Analysis

The market is considered to be fragmented with the market being occupied by several local and global players. As the optimistic electric two-wheeler scenario seems to be encouraging several players are expanding their presence in this new market by adopting various growth strategies such as mergers, acquisitions, collaborations, etc which were earlier dominated by startups. For instance,

• In October 2022, Mooving adopted a platform strategy to become the largest and densest battery-swapping network provider for EVs in the country. Currently, it is one of the leading providers of battery swapping and battery subscriptions (BAAS - Battery as a Service) for electric two-wheelers and three-wheelers in the country.
• In September 2022, Hero Electric, the largest and oldest E2W company, in a strategic move to revolutionize battery swapping in Mumbai, announced a partnership with one-stop battery swapping start-up VoltUp and Adani Electricity. Committed to developing the EV sector, this is a first wherein OEM, infrastructure, last mile partners, and a battery-swapping start-up have come together to boost smart mobility.
• In May 2022, Bounce Infinity announced plans to establish its battery-swapping eco-system soon. The EV manufactured has joined forces with Bharat Petroleum Corporation Ltd (BPCL) for it and will set up 3,000 swap stations. Bounce Infinity offers its e-scooter, the E1, in two formats, with and without the battery. Buyers can bring home the scooter without the battery unit and can rely on the swap stations for their needs. The latter will be available on a subscription basis.

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