Press "Enter" to skip to content

India's EV battery-swapping market charges expectations of growth – Nikkei Asia

Japan firms including Terra Motors tie up with local partners to enter market
MUMBAI — Strong growth prospects in India’s market for electric three-wheel and two-wheel vehicles are driving a rush to start battery-swapping services in the emerging country, luring Japanese companies.
Terra Motors, a Japanese electric vehicle manufacturer focused on South Asian markets, has teamed up with Bengaluru-based Sun Mobility, a local battery developer, to build battery swap stations. A local unit of Honda Motor is set to roll out a battery-sharing service in the country.
These companies are betting that swapping out the entire battery will appeal to customers worried about the range of electric vehicles, or who simply hate waiting for a full recharge. Their main target customers are operators of three-wheel taxis.
Terra Motors and Sun Mobility announced in April a strategic partnership for incorporating the Indian company’s swappable battery technology into three-wheel electric vehicles that Terra will sell in India. The two firms will also work together to build a network of battery swapping stations in India.
Battery swapping allows drivers to replace depleted packs quickly with fully charged ones, rather than plugging the vehicle into a charger. Terra and Sun hope the approach will appeal to taxi operators using electric vehicles. The companies are considering charging users up to 50 rupees ($0.64) per swap.
Sun Mobility has been ramping up its presence in India’s auto industry by providing batteries to auto manufacturers including Ashok Leyland, a leading maker of buses and other commercial vehicles. Sun has already established battery swap stations in more than 15 cities in India.
Terra and Sun announced their tie-up in an investment promotion event in the eastern Indian state of West Bengal, which is trailing far behind New Delhi and Mumbai in embracing electric vehicles. Sun Mobility CEO Anant Badjatya described the market as a Blue Ocean, meaning an as-yet unexploited or uncontested market space.
The two companies plan to build on the foothold they will establish in West Bengal to widen the scope of their joint efforts to expand a network of battery-swapping stations in other parts of the nation as well. While the two firms have yet to map out a detailed plan for this ambitious venture, they are discussing various ideas, including installing swap stations in Terra’s dealerships and splitting the profits between them, according to Terra Motors President Akihiro Ueda.
Despite being headquartered in Tokyo, Terra Motors has been focusing its business operations on India and other Asian emerging countries. It has established its status as a major maker of three-wheelers in India, where it sells more than 10,000 units annually, controlling a share of 10% or so of the market, according to the company. In 2021, the Japanese company also set up a sales financing subsidiary in India, Terra Finance.
Gasoline cars still claim the lion’s share of the Indian auto market. But the Indian government has been stepping up its policy efforts to promote electric vehicles, partly as a way to reduce its swelling trade deficit due mainly to huge oil imports and partly in response to the country’s increasingly serious air pollution.
While electric cars are seen as a hard sell to Indian consumers mainly because of their high price tags, electric three-wheelers and two-wheelers, which can run on much smaller and cheaper batteries, are expected to gain ground faster.
Nitin Gadkari, India’s minister of road transport and highways, has said the government will try to raise the share of electric two- and three-wheelers in the overall sales of these vehicles to 80% by 2030, according to local media. Another potential driver of growth in sales of electric vehicles is a growing eco-consciousness among Indian consumers.
The brilliant growth outlook of the Indian market for battery-swap services has inspired Honda to jump in. The Japanese car manufacturer has set up Honda Power Pack Energy India in 2021 to launch its own battery sharing service, starting with the southern city of Bengaluru.
Honda Power Pack Energy India will not manufacture two- and three-wheelers. Instead, the company will forge partnerships with local manufacturers.
Honda has not revealed how many battery sharing stations it will operate at the rollout of the service. But it has already announced its tie-up with Hindustan Petroleum Corp. Ltd. (HPCL), a government-owned oil and gas company. Honda plans to install battery swap facilities at HPCL retail outlets.
Other than Japanese players, India’s RACEnergy recently started operating battery swap stations in Hyderabad. Competition in this promising market among both Indian and foreign players is clearly bound to intensify in the coming years.
Discover the all new Nikkei Asia app
Discover the all new Nikkei Asia app
Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.
By continuing to browse this website, you accept cookies which are used for several reasons such as personalizing content/ads and analyzing how this website is used. Please review our Cookie Policy to learn how you can update your cookie settings.

source