Arun Sreyas of RACE Energy is shifting into high gear. The company opened its battery manufacturing plant in mid-2023. Now, Sreyas and his co-founders will soon start making autorickshaws. “The good part is we’re not just going to be a Bajaj. We’re also going to be an IndianOil for that Bajaj,” says Sreyas enthusiastically, noting the company will soon be producing both autorickshaws and the swappable batteries that will power them.

There’s no question sales of electric two-wheelers and three-wheelers are revving up much faster than four-wheelers or even electric buses. But one question still hangs over them. Will they, like two-wheeler start-up Ather Energy, be powered by fixed batteries sold with the vehicle? Or will they be using swappable batteries picked up at charging stations?

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Ather’s chief Tarun Mehta has come out strongly against swappable batteries due to the need for additional infrastructure, manpower and extra batteries. But battery-swapping world leader Gogoro is spending $1.5 billion and has already started manufacturing vehicles run on swappable batteries, By mid-2024, the Taiwanese company aims to have 100 swapping stations.

Sreyas is focusing on the smaller but extremely lucrative three-wheeler market. The company began by sourcing batteries from China and fitting them onto three-wheelers in its home city Hyderabad. But it quickly moved up the ladder by making its own batteries. Now the company is getting ready to expand at high speed. “We’ve been in Hyderabad for 18 months now so we understand what drivers want,” says Sreyas. The company already covers over half of Hyderabad and users should be able to reach a swapping station within a 3-km radius. The swapping stations are self-service and each battery weighs 10 kg. The company is now doing pilot runs in half a dozen Indian cities and it’s about to launch in Sri Lanka where it says it’s found a strong partner. Everywhere it moves, the company will appoint partners who will sell the products and run the local swapping stations.

Why the rush into Sri Lanka? Autorickshaws are a key form of transport on the island which has poor public transport and e-rickshaws got a big boost due to the recent economic crunch when petrol became almost impossible to obtain. Just how big is the Sri Lankan market? Sri Lanka with its 22-million population is estimated to have 2-3 million autorickshaws. By comparison, even with its 1.4-billion population, India is believed to have just 10 million autorickshaws.. Currently, RACE is doing a pilot project in Colombo with 50 vehicles. Says Sreyas: “It’s a market which has a greater requirement for e-autorickshaws than any market in the world, partly because of the petrol crisis. The culture is also very autorickshaw-driven. I haven’t seen any other country so dependent on autorickshaws.”

Autorickshaws are also popular in many African countries with poor public transport like Nigeria, Egypt and Kenya. In one Nigerian city, police are even considering banning autorickshaws because street muggers are using them as getaway vehicles. Smaller Indian cities and towns, too, have poor public transport and therefore a higher density of autorickshaws when compared to the population.

Reliance in the game

Just how big could the battery-swapping business get? Bear in mind Reliance has already leaped into battery swapping and has spent $200 million to buy two international companies, Faradion, which makes sodium-ion batteries, and Lithium Werks, which makes lithium-ion phosphate batteries. Reliance has also launched swapping stations in Bangaluru and it’s doing a trial with grocery delivery firm BigBasket. For now, Reliance is focusing on the larger two-wheeler market. It insists it has no plans to get into vehicle-making.

The government attempted to push for standardised batteries which would have ensured customer convenience by mandating one-size-fits-all products that could be picked up from any swapping station. However, this was resisted by many companies who felt it could stall innovative technological upgrades different companies were working on. Now the Association of Battery Swapping Manufacturers is focusing on getting subsidies under the electric mass transit-boosting Fame-III schemes.

With battery technology still evolving, many say both the battery-swapping and fixed battery ecosystems will co-exist in India for some time. What consumers opt for now will depend on the vehicle’s intended use, available infrastructure, convenience, and battery pricing. There’s a strong case for battery swapping for e-rickshaws and commercial two-wheelers as they travel long daily distances and can’t afford to spend time off the road charging.