With what is being touted as the ‘Shift of the Century’ in the automotive segment, the business models are evolving too! Does that mean that the competitors of yesterday are becoming the partners of today? Tanvir Singh, Co-Founder of Mooving, chats with EFY’s Mukul Yudhveer Singh.
Q. While gig workers seem to have embraced the battery swap model, we do not hear much about commuters using battery-as-a-service. What can be the possible reasons?
A. The market’s reception varies across consumer categories. We have observed three main groups: first movers who are adventurous and have a higher disposable income, women and children who prefer low-speed two-wheelers, and daily wage earners who use two-wheelers for their livelihood.
The gig worker economy has shown significant adoption because electric two-wheelers offer substantial savings and are essential for their time-sensitive work. Battery-as-a-service is especially beneficial for them as it eliminates the risk and downtime associated with battery issues, allowing for quick swaps. On the other hand, personal mobility users, like commuters, are gradually recognising the value of our services, but the shift towards electric two-wheelers as a primary mode of transport is still evolving.
Q. Do you see battery-as-a-service extending to commuters as well?
A. Absolutely! Many consumers find electric vehicles expensive, especially due to the battery cost. By delinking the battery from the two-wheeler, we reduce the upfront cost of ownership, making electric two-wheelers more affordable. With a flexible monthly subscription, customers can pay for the battery based on their usage, which adds to the affordability. This model is a game changer as it lowers the entry price for electric two-wheelers and makes smaller batteries more viable, ensuring peace of mind for consumers.
Q. Do you think electric three-wheelers will also be a significant market for swappable batteries and battery-as-a-service, considering they are expected to be the second-largest use case in India after two-wheelers?
A. Absolutely, three-wheelers are indeed a major market for battery swapping. There are two main types: e-rickshaws and auto-rickshaws. Auto-rickshaws are a bigger use case for battery swapping, with around 2.5 million e-rickshaws already on the roads. Every year, about 80% of these e-rickshaws require battery replacement, presenting a huge opportunity to transition these users to battery swapping.
| Can you provide an example of the cost difference between buying a scooter with a fixed battery and one with a de-linked battery, assuming a range of 100 kilometres? A scooter with a fixed battery and a range of 100 kilometres typically costs around 100,000 rupees. With a de-linked battery, the upfront cost drops to about 60,000 rupees. For the fixed battery scooter, you would spend around three to four hundred rupees monthly on electricity, totalling about five thousand rupees annually. With a de-linked battery, you might pay around 1500 rupees monthly, which amounts to about 18,000 rupees annually. Over three years, this adds up to 54,000 rupees. So, with a de-linked battery, you are essentially paying a similar amount as the fixed battery option but spread over three years. Plus, you do not have to worry about battery maintenance or unexpected costs. |
Q. Are the form factors, such as size, of batteries for two-wheelers and three-wheelers the same?
A. Yes, they are similar. In two-wheelers, we typically use a single battery with around 2 kilowatts of capacity. For electric three-wheelers, we use two or three batteries in parallel, which are also around 2 kilowatts each. This similarity in size and capacity allows for easy battery swapping and efficient utilisation across both two-wheelers and e-rickshaws.
Q. If we were to convert 30% of them to battery swap, could we set up an infrastructure to support them?
A. The beauty of battery swapping is its efficiency in serving a high number of vehicles from a compact space. A station with 24 batteries can operate for 12 to 18 hours a day, or even 24 hours in an unmanned fashion. It can service about 80 two-wheelers in a 12-hour shift and 120 in an 18-hour shift. For e-rickshaws, the number would be around 50 to 60, as batteries take about one and a half to two hours to charge. Assuming a 30% conversion rate, we would need about 25 to 30 thousand swap stations across India by 2026-2027, which is feasible considering the size of the country.
Q. But with battery swapping, wouldn’t hotspots in cities like Ghaziabad or Gurgaon become problematic if a station serving approximately 80 motorcycles is overwhelmed?
A. That is where network design comes into play. We gather data from various sources, like partnerships with Zomato and Swiggy, surveys of housing societies, and collaborations with MapMyIndia, to identify hotspots and create an initial network layout. We then adjust the network based on utilisation. If a station is over utilised, we increase the network density in that area. If it is underutilised, we may relocate it. It’s a complex process, but there’s a method to the madness.
Q. Minus the commuter segment, is the gig economy segment for two-wheelers and three-wheelers substantial enough to sustain the battery-as-a-service and battery swap industry in India?
A. The gig economy in India is vast, with around two to two and a half million people working in last-mile delivery, bike taxis, courier services, and other related fields. This market alone is significant enough to support the battery swapping industry for the next
few years.
Q. Beyond two-wheelers and three-wheelers, do you see battery swapping extending to larger form factors like buses or trucks?
A. It has been explored internationally for cars, trucks, and buses. However, in India, the dynamics are different due to the need for automation and precision in handling larger batteries, which increases operational costs. Given that India is a price-sensitive market, battery swapping for larger form factors may not be commercially viable at the moment. For these larger vehicles, fast charging is a more feasible option, as it can accommodate cooling systems and other technologies.
Q. Is there an opportunity for Indian players to establish dominance in the battery swap sector outside India?
A. Yes, Africa is a prime market for Indian companies, with conditions, price expectations, and product fitment similar to those in India. Beyond Africa, the Middle East is also an interesting market due to its need for such solutions and its relative proximity. However, Africa remains the most promising region for expansion due to its similarities to the Indian market.
Q. When considering cost versus benefits, why would someone in Africa choose an Indian battery swap company like Mooving or Sun Mobility over Gogoro?
A. Gogoro has the first-mover advantage and a well-developed product, making them a strong competitor globally. However, Indian companies like Mooving and Sun Mobility have a deep understanding of the Indian market, which could translate well to similar markets like Africa. It is still early to compare, as Indian companies are developing their products and exploring partnerships. The differentiation will likely come down to product usability and partnerships.
Q. Is there an opportunity for companies to manufacture batteries and white label them for other brands?
A. There are already companies that specialise in manufacturing custom-made batteries for smaller OEMs, offering their expertise in supply chain and design. The market for these companies is substantial, as they are not limited to a single OEM or just mobility use cases. They can also cater to energy storage and smaller form factors. The key differentiator in the long term will be the quality of the product, as many players currently work with substandard products.
Q. Why do you think Honda Power Pack Energy has been quietly testing their swap batteries in Bangalore without announcing their main game?
A. Honda has been exploring battery swapping in India for almost seven to eight years, including how to use solar to charge their swappable batteries. They are in it for the long haul and are close to making a significant announcement. They have already revealed plans to launch electric versions of the Activa and other two-wheeler models, some with swapping options. This move will likely make battery swapping more mainstream, especially in the personal mobility segment, benefiting the entire industry.
Q. Does this mean that the electric vehicle business model will involve OEMs partnering with each other on one side and competing on the other?
A. OEMs can choose to partner with Honda or with other companies like us, depending on the product fit and network reach. This kind of collaboration has occurred in Japan, Europe, and China, where multiple OEMs have joined forces on a single swap network. This approach increases utilisation, reduces investment, and ultimately benefits the end-user.
