Let’s Swap, Says Madam FM
Swap batteries, of course. Why, what did you think?
OK, let’s be serious.
Alternatives to oil are aplenty. Prime minister Narendra Modi-ji wants green hydrogen, Union minister Nitin Gadkari-ji promotes bio-fuel, Tata is making batteries. 
(Unfortunately, nobody wants hybrid vehicles, despite 50%-60% better fuel economy with minimal cost and little investment.)
The Union finance minister (FM) now says—swap batteries.
Let us see how that works.
Batteries are expensive and heavy. Just 1 KWH (stores one unit of electricity) costs $US100+ internationally and weighs over 4kg.
Electric vehicle (EV) car batteries are big. Tata Nexon EV’s 30.2 KWH, 125+ kg battery pack gives 300+ km range, but needs a mini-crane for handling. You cannot pop into a service station, swap battery, and pop out.
Besides, the battery’s best location is under the car’s floor (for low centre of gravity). Not easy to move it in and out.
So, swapping batteries on electric cars is out.
Two-wheelers, then?
OLA scooter (3 KWH battery, 100+ km per 5–6-hour charge) costs Rs1 lakh (with subsidy). A comparable petrol scooter cost around Rs70,000.
Even without an engine and gearbox (costlier than an electric motor plus controller), an electric two-wheeler costs around Rs30,000 more. So, let us say Rs35,000 for the battery.
Now comes the crux.
The raison d'être of an electric vehicle is low running cost (and saving the environment, of course). A petrol scooter costs Rs2 per km (50kmpl—kilometre per litre—in town). An electric scooter costs Rs0.30 per km (100km on 3 units @ Rs10 per unit), and almost zero maintenance cost.
The problem: expensive battery = bigger up-front cost. You get low running cost because of higher initial cost.
Let us call in the finance chap. 
His solution: battery-less two-wheeler. The buyer rents a charged battery, uses it, and swaps it for another charged battery - ad infinitum.
Two questions:
Who pays for the battery?
How much rental for a charged battery?
First question—easy. Many financiers are available—banks, leasing companies, consumer finance companies, even oil companies. There is fierce competition for selling two-wheeler loans.
Funding rental batteries is no different. Besides, the borrower is a company, not an individual; hence, the loan is probably safer than an auto loan.
How much money is involved?
In 2019, 21mn (million) new two-wheelers were sold in India. COVID dropped it to 15mn, but 20mn a year seems reasonable, going forward. If half of these are battery-less electric two-wheelers, we have 10mn units, i.e., Rs35,000 crore per year for batteries. 
Quite a manageable amount, actually. New two-wheeler loans amount to over Rs60,000 crore annually. Another Rs35,000 crore will be an opportunity, not a problem.
Now, the running cost.
OLA gives a three year, unlimited km guarantee for the battery. So let us assume that a battery lasts three years. Daily charge and discharge would mean about 1,100 cycles over three years – quite reasonable.
Here are the numbers:
Rs35,000 - 3 years - 12% per annum (pa) = Rs1,162 per month (pm), say Rs40 a day.
Add 25% (Rs10) to this, to cover additional batteries as revolving stock.
Add charging cost (Rs30).
Add Rs20 for overheads and profit, and you reach Rs100.
Say, you run your electric scooter 50km a day, and swap a battery every two days. For 100km of running - electric Rs100, petrol (2 liters) Rs200+, for the same initial cost, around Rs65,000. 
A no-brainer, right?
One moment. If the scooterist keeps the battery for several days, the battery does not get turned around and the battery rental company gets less income. But then the battery undergoes less charge and discharge cycles, and lasts longer than three years and, hence, more rentals.
Besides, there are possibilities of savings, e.g.:
Indigenous batteries will be cheaper than imports.
Rs10 per unit of electricity is on the high side. If recharging is done at night using cheaper power, or wind or solar power , the cost will be lower.
12% interest on funding is a bit high.
Another good news: the infrastructure is simple and cheap. There is no need for numerous charging stations, plus huge space to accommodate vehicles when charging for 6-8 hours.
Existing petrol pumps can set up charging stations that will charge hundreds of batteries at a time while occupying very little space.
Also, one person can carry a two-wheeler battery weighing less than 20kg. At a service station, a two-wheeler arrives, its battery is disconnected and removed, a charged battery put in and connected, and off it goes – time comparable to filling petrol.
Of course, there must be standards in place. For example:
Batteries must be standardised in size, and power.
All electric two-wheelers must use the standard battery. 
Safety norms are required. Lithium-ion batteries tend to explode – remember the Boeing Dreamliner?
Worn-out batteries must be safely trashed.
Probably this is what the FM meant by 'battery swapping policy.'
The business model must be thought through as well. The company that owns the battery must get its rental regardless of where the battery is returned for swapping. Not too difficult, maybe thus:
Give each battery a bar-coded unique serial number. 
Set up an online system connecting all service stations to a central MIS, also link it to payment platforms.
For each transaction, scan the serial number of the charged battery, note the vehicle’s number, and collect the money from the customer.
The MIS divides the income between the battery owner and the service station. 
Finally, will battery swapping help the nation?
Yes, provided the batteries are largely indigenous and are charged by renewable electricity. But if we burn imported coal to charge imported batteries – No.
What about cars, trucks, buses etc? Ah well… Modi-ji and Gadkari-ji will come to the rescue, no doubt.
Next Budget, Madam FM?
(Deserting engineering after a year in a factory, Amitabha Banerjee did an MBA in the US and returned to India. Choosing work-to-live over live-to-work, he joined banking and worked for various banks in India and the Middle East. Post-retirement, he returned to his hometown Kolkata and is now spending his golden years travelling the world (until Covid, that is), playing bridge, befriending Netflix & Prime Video and writing in his wife’s travel blog.)
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