Standardizing EV Batteries Is Not A Viable Solution At This Juncture
By Dr Samir Kapur
The Indian two-wheeler industry is the largest in the world and Indian customers require the best quality two-wheelers that are best in class across the world. To bring EV transition in a sustained manner, EV product offering cannot sacrifice the customer experience and has to be at par or better in terms of performance, safety, or reliability compared to the ICE products.
Imminent change to electric has started after technology agnostic and clear policy direction from Govt (esp FAME 2 onwards) followed by investment and development of good quality and performance EV two-wheelers.
Not too long ago, the Government had permitted electric vehicles to be sold and registered without batteries, as battery actually accounts for 40 to 50 percent of an electric vehicle’s cost. The rationale was, such a move would cut down the overall cost of an electric two-wheeler and bring the price at par or even lower than a petrol-powered vehicle. While the motive is to accelerate the adoption of EVs in the country, such moves or any possibility of standardization of battery comes with certain inherent disadvantages.
Battery technology is currently at a very nascent stage and it is continuously evolving. Any attempt at standardization at this moment will stifle innovation. Standardization can only happen once the technology and design have matured adequately. In fact, the energy density, shape, size, mounting of the battery, and the way it interacts with the battery management system in a vehicle are still undergoing development and are a few years away from maturity. Therefore, for now, the Government can promote it in a way where respective OEMs continue to do intensive RND and moot innovation for providing the best value to customers.
For a sustainable transition to electric two-wheelers, it is important for customers to find options that offer performance, quality, safety, and reliability similar to or better than the current internal combustion engine-powered two-wheelers.
At this juncture, any push for a specific type of technology or business model will eventually lead to poor quality solutions for customers and can even lead to dependability and accountability concerns, as, if a customer’s EV face any issues from using a poor quality or suboptimal quality battery, who is to be held responsible.
Another pertinent concern is that monopoly for the select groups will come at the cost to customers. Such a move will actually prove to be advantageous to foreign battery manufacturers, specifically the Chinese and the Taiwanese manufacturers as they will be laying down the standards that we all have to adhere to, thereby beating the entire purpose of ‘Aatmanirbharta’ in this domain. Most of these Chinese manufacturers build substandard quality products and allowing them to dictate standards will result in significant migration of value outside of India. In fact, closer to home as well, individuals holding positions in energy solutions and working in regulatory capacities in the country are therefore likely to have a conflict of interests. Therefore, given the current scenario, standardization of EV batteries is not a viable solution.
EV adoption was well articulated by the Government in the approved Phase-II of the FAME Scheme after due consideration and learning. The Government had set aside Rs. 10,000 Crore for 3 years, where around 86 percent of funds would be spent to boost demand for Electric Vehicles – 7000 Electric Buses (e-bus), 5 lakh Electric Three Wheelers (e-3W), 55000 Electric Four Wheeler Passenger Cars (including Strong Hybrid) (e-4W) and 10 lakh Electric Two-Wheelers (e-2W). All promotions and incentivization for driving the adoption of EVs at the Center or State level should adhere to the same FAME 2 criteria for optimal impact.
Therefore, at this stage, battery standardization goes against the FAME II philosophy, where the objectives are to ensure (a) safe, quality, and at par performance to customers for sustained transition to EVs, (b) without compromising imports to China (c) creating an open market for innovation and providing equal opportunities towards best value to customers.
In addition, as soon as possible, India should set up its own cell technology development and manufacturing set-ups, where even if the raw materials for such cells are imported, there would be a straightforward benefit of reduction in import value.