Regarding battery swap for EVs, the country’s ambitions are far bigger than the West, as the latter has tried and failed at it on multiple occasions. The global electric vehicle battery swapping market, as per a report by Allied Market Research, was valued at $100.1 million in 2020 and is projected to reach $852.6 million by 2030, registering a CAGR of 24.4%.
The opportunity seems so humongous that Honda, one of the top 10 motorcycle makers in the country, has also decided to join the battery swap game.
During a recent visit to Honda Two Wheelers India’s Manesar factory, Mobility Outlook learnt that the OEM has an interesting plan to approach the battery swap market. However, it might have been a little late in announcing its plans for the battery swap vertical as there are start-ups who claim to have run battery swap pilots for over a year now.
Sandeep Kumar Sansanwal, Associate Vice President, Honda Two Wheelers Operations, said, ‘We are on time. Whatever we do, we believe in doing the same via the testing route. Honda has been doing battery swap for years. We have been testing our technology in different geographies. In India, we started testing about a year and half ago. Honda has covered more than 200,000 km in four months. We have tested swappable batteries in the weather conditions of India. We are launching the solution as we are sure about the product.”
The company is trying to create a win-win situation for OEMs that use Honda power packs by not charging anything in lieu of the batteries Honda provides and a win-win for drivers by only charging battery swap fees to them. A typical battery swap for a three-wheeler in India costs between INR 175 to INR 300, depending on the battery capacity.
Focus On e3Ws
Honda’s plans around the battery swap market include launching ‘Battery Exchanger 2’ swap stations in the county. The company is right now focusing on e3W OEMs for collaborations. India, interestingly, is seen as one of the biggest e3W markets in the world.
The company is of the view that 3Ws will be the first mobility vertical that will accelerate electric mobility. The OEM has also created a separate entity named Honda Power Pack Energy to enter this space in India.
‘Three-wheelers in India define the last-mile connectivity. Even if you look at the travel patterns of 3Ws you will find out that they travel from a certain point to another certain point. Infrastructure is very important to support the entire ecosystem,’ shared Kumar.
The OEM has so far partnered with several e3W OEMs in India, including Atul and Greaves. Though no such collaborations in the e2Ws space have been announced, Honda Power Pack Energy explained that it is open to onboard as many e2W and e3W OEMs as it wants to join them. It is worth mentioning here that Honda’s new entity is not just providing power packs to the cargo side of the 3Ws but also the passenger side.
‘First, we want to do justice with the e3W ecosystem. I can’t claim any timeline but we will support the e2w ecosystem as well,’ explained Kumar. The company’s first launch in India’s battery swap ecosystem market will be in Bangalore.
Kumar added, ‘The most important thing inside a battery swap system is the battery being charged. Batteries are the ones that power the system. You can test chargers anywhere but batteries which are running and giving power to a vehicle need to be tested in the real world conditions. We have tested the swap stations as well as the batteries.’
Honda Power Pack Energy is starting its services in Bangalore because it feels that the city has a great inclination towards electric vehicle technology. The company has also met several government officials in Bangalore and believes that it is easy to start battery swap there compared to another city.
‘Bangalore is known as an early adopters’ city. It is no secret that the adoption of EVs is very quick there. That is why we are starting with the city of knowledge in India,’ shared Kumar.
No Selling Or Lease Model
The most interesting part of the formula Honda Power Packs is following for its new business lies in the fact that it is not charging anything from OEMs who come to the brand for sourcing batteries. Instead, the company will be charging the end-consumer (the vehicle owner) for the battery swap plans he signs up for.
‘Our only income is the subscription fee that the drivers will pay for doing the battery swap. We do not charge the OEM except for the first rental battery that he will need to drive to the swap station,’ informed Kyoshi Ito, President & CMD, Honda Two Wheelers India.
OEMs might become a significant enabler of driving Honda’s battery swap business here as they will recommend what brand of batteries a consumer should use in his/her newly purchased e2Ws or e3Ws.
Honda Power Pack Energy will own all the batteries in the swap ecosystem. The business followed by the company will be around a pay-as-per-you-use model. It simply means that the company will levy a charge on every battery swap through one of its swap stations. There is also a possibility that the company might start charging an initial subscription fee for the drivers interested in using Honda Power Pack’s swapping services.
The company has plans to expand its operations in more metro cities by the end of this year. Honda Power Pack Energy will be targeting Tier-1 cities as part of its first expansion. It started with seven swap stations in Bangalore.
‘The biggest challenge for a battery swap and power pack provider is its ability to provide support to an OEM. Nobody will come to you until and unless you have a big battery swap network. OEMs are coming very positively to us,’ concluded Kumar.
