India Emerges as a Potential Global Leader in Battery-Swapping Technology
Battery-swapping technology is developing at a rapid pace and could soon significantly alter how we currently use electric vehicles (EVs). Operating within this exciting industry sector, startups such as SUN Mobility, Battery Smart, and RACEnergy are playing a critical role in driving India closer to becoming a potential global leader in battery-swapping technology.
Funding & Expert Opinion
Over the past five years, battery-swapping technology has amassed a significant amount of funding, with companies raising over $16 million, signifying the tremendous potential of this sector. It’s evident that global investors have started paying attention to this industry, as Tracxn data indicates that startups in this space have raised over $135 million since 2021.
According to industry experts, the value proposition of battery-swapping technology is most significant in solving problems of micro-mobility commercial vehicles. The technology’s success in India’s two- and three-wheeler commercial vehicles markets could help India become a global leader in battery-swapping technology.
Notable Startups
Some of the top startups operating in this industry vertical include Battery Smart, SUN Mobility, RACEnergy, Echargeup, Esmito, Batterypool, and Mooving, among others. These startups have attracted the attention of global investors, with 17 funding rounds attracting about $135 million in investments.
Market Potential & Possibilities
Although battery-swapping technology is still in its nascent stages in India, the technology has vast potential for Indian markets, particularly in the two- and three-wheeler commercial segments. With an estimated three million e-rickshaws and at least 2 million electric vehicles on Indian roads, the battery-swapping market in India is predicted to be close to $2 billion and has the potential to increase up to $17 billion by growing at a compound annual growth rate (CAGR) of 60 to 65 percent.
Stakeholders believe that with the right infrastructure in place, swapping technology could contribute to a 30 to 40 percent growth in electric vehicles in India. However, certain conditions such as government mandates, safety, interoperability, and assurance of battery-swapping roadmaps remain to be met. A report titled “Investor Perspectives on Accelerating Growth in the Indian EV Ecosystem” outlines these conditions in more detail for various vehicle segments.
In addition to its effectiveness in the micro-mobility market, battery-swapping technology may also have the potential to address problems of the electric vehicle supply chain. Arun Sreyas Reddy, co-founder of RACE Energy, believes battery-swapping is not only relevant to the Indian market but also has global potential to reduce the import of lithium, a key raw material, while addressing the battery-recycling problem.
Challenges
Despite the potential of battery-swapping technology, the industry sector still faces significant challenges. One of the critical issues in the sector is its capital-intensive nature. For instance, to serve one lakh customers, a company would need to invest around $200 million in assets, which can quickly grow to around $2 billion for a million customers. Therefore, for India to succeed in battery-swapping technology, major investments in batteries and establishing over 50,000 battery-swapping stations are necessary, requiring an investment of approximately $50 billion.
Conclusion
Although the battery-swapping technology is still in its early stages, stakeholders believe that it has enormous potential in transforming India’s micro-mobility commercial vehicles market. With the right infrastructure in place, battery-swapping technology could also contribute to growth in India’s electric vehicle market. Meanwhile, capital investment in batteries and establishing over 50,000 battery-swapping stations is necessary for a successful rollout of this technology in India.
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