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Move over SaaS, it’s time for BaaS – why battery swapping can dramatically change EV game

Rise of e-two-wheelers, and MoRTH and NITI Aayog’s battery swapping policy could be the push e-vehicles needed to compete with ICEs.

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Ola Electric and Ather Energy are almost household names in the Indian e-automobile space and the two Bengaluru-based electric two-wheeler manufacturers could be on course to set up a new ‘Hero vs Bajaj tussle’ of the 2020s as electric two-wheelers gather sales momentum. With wallets hurting, thanks to the high prices of petrol per litre that barely lasts a couple of days even on the most efficient, fuel-sipping petrol two-wheelers, it may still be a few years before sales of e-two-wheelers start taking over sales of ICEs. But what if someone were to challenge the very concept of ‘owning a vehicle’?

This idea intrigued Vivekananda Hallekere, the founder of another Bengaluru-based startup back in 2017. As the Namma Metro in Bengaluru began its roll-out, he figured many commuters who used it, and later the Hyderabad Metro too, were either ditching their private vehicles or did not own one in the first place. Yet, they had issues getting from their homes and offices to the metro stations—a ‘first-mile’ and ‘last-mile’ problem. His company, Metrobikes, had a solution. A fleet of two-wheelers across Bengaluru that anyone could use with their smartphone app. Users will be charged per kilometre. They became a massive customer of two-wheelers and deployed thousands of scooters across southern cities. These ‘app-enabled’ scooters were a big hit but this wasn’t the end of the innovation around ownership.

Also Read: Here’s how practical Honda City e:HEV can be in helping Indians escape high fuel prices

Emergence of Bounce Infinity

Seeing the traction that electric two-wheelers were gaining, Hallekere and his co-founders Anil and Varun Agni, their management team and investors made a few major decisions. The first would be to cotton on to the electric revolution. The second was a change of name—Metrobikes became ‘Bounce Infinity’. During the early stages of the pandemic, things were tight, but the engineers at Bounce kept working on multiple products. The innovation, however, was not just in the hardware; in fact, those automotive reviewers who have tried out Infinity e.1 have described it as basic, particularly against the likes of the Ola S1 Pro and Ather 450X, but say that it delivers the performance it promises.

The real innovation comes from the business model that Bounce Infinity is proposing with its product. Customers can buy it outright, complete with a battery, like other electric two-wheelers out there. However, customers could also buy the ‘Battery as a Service’ or ‘BaaS’—allowing customers to pay just for the e.1 upfront, as little as Rs 60,000 and then be charged every time they swap out for a fresh, fully-charged battery. But there’s more. The company proposes models similar to that of mobile operators. Customers could have prepaid or postpaid plans that bring down the cost per battery swap significantly—from the Rs 85 that users would pay without a plan to as low as Rs 65—or even less with some plans.

Hallekere explains, the batteries will be the company’s asset and can be tracked online and cannot be charged at home. However, customers who buy the e.1 or subsequent products with the battery will be allowed to charge them at home. The company is tying up with oil marketing companies and going forward with local retailers and even real-estate companies and corporate offices to establish a network of swapping stations.

Also Read: Whose driving data is it? Ola e-scooter accident in Assam triggers privacy controversy

MoRTH and NITI Aayog’s policy

Into this comes the Ministry of Road Transportation and Highways (MoRTH) draft policy for battery swapping solutions. The MoRTH and NITI Aayog have jointly proposed it for the growth of the electric two-wheeler space and both Nitin Gadkari and Amitabh Kant have gone on record to argue that battery swapping is the future for growth in the industry. They have proposed business ideas for swappable batteries to be operational across multiple brands of scooter manufacturers. Nobody, after all, buys a motorcycle with a full tank of petrol and the concept of swapping to a fully charged battery in a matter of a few minutes is like refilling fuel at a petrol pump, thus removing the dual problems of range anxiety and time taken to charge a battery. And just as mobile recharging has given small stores another viable business line, swapping out batteries could become a new business opportunity across India.

Of course, this is not an idea without some risks, but thanks to widespread data networks and batteries, their location, state of charge and gradual deterioration can be monitored. A battery that has begun to decay, supposing it could only hold three-quarters of its capacity after a few months of use, will be withdrawn from the scooter fleet and serve as energy storage such as a UPS system in homes and offices.

This is all very novel, but if one studies the latest two-wheeler sales data for April 2022, the urge to buy motorcycles outright isn’t going away. Sales of two-wheelers in April 2022 grew by 38 per cent from the same month the previous year to almost 1.2 million units, with the country’s leading manufacturer Hero Motocorp selling over 410,000 motorcycles and scooters. Yet it was Ola Electric that made waves last month by registering dispatches of 12,691 scooters, a percentage point of the overall, but one has to remember that this came from nowhere.

The psychological need for ownership, particularly in a country like India, where leasing models are still in their infancy, might be the biggest challenge for the likes of Bounce Infinity, even if one part of the asset is with you.

It is only reasonable to have doubts about the viability of the battery swapping concept, even if Bounce Infinity has conducted over a million swaps on its shared mobility fleet of electric scooters in Bengaluru and Hyderabad, proving that the concept can work. Indeed, it plans to soon launch its shared scooter service in the National Capital Region (NCR) but before that, deliveries of the e.1 will begin in earnest. The battle for the hearts and minds of India’s two-wheeler consumers will not be a two-way fight over products but a fight over business concepts and products.

@kushanmitra is an automotive journalist based in New Delhi. Views are personal.

(Edited by Srinjoy Dey)

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