Why the humble autorickshaw is key to e-mobility growth in India

When in college seven years ago, engineers Arun Sreyas and Gautam Maheswaran built formula-styled cars for racing events. “By the time we turned 21 we had built six cars between us,” said Sreyas. Now, however, it’s the three-wheeled autorickshaw that’s got them electrified as their Hyderabad-based start-up RACEnergy begins to roll out a Lithium-ion (Li-ion) battery-swapping network.

Electric vehicle (EV) sales in the country are still nascent but growing fast — that growth driven mostly by two- and three-wheelers. Swapping essentially allows people to buy an EV without a battery and then sign onto a service provider — replacing discharged batteries with new ones at swap stations, paying as they go.

But even as it taps new EV buyers for battery swaps, RACEnergy is eyeing the regular autorickshaw on the road today as a potential user — this after removing its internal combustion engine and converting it into a fully-electric auto. An EV ‘heart transplant’, Sreyas says, can be done in a couple of hours.

He points to how autorickshaws in India made the transition from petrol to LPG over the years.

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“What we realised is, this is a market that has been used to retro-fitting for almost two decades with LPG. So, we are just mimicking that whole solution. But it’s just a very challenging technical solution, that’s it,” said Sreyas, co-founder of RACEnergy. “We’ve taken three years to solve that technical part. Initial conversion pilots have been a success, so now it is about scaling up.”

Clearly, the bigger picture here is of the autorickshaw — how the ubiquitous three-wheeler that appears on Indian roads in various shapes and sizes, ferrying people and cargo, figures so prominently in the country’s electric mobility revolution. Most of the early entrants into battery-swapping are betting on three-wheelers to push open this nascent market.

E-rickshaws and e-autos

Take Delhi-based start-up Battery Smart, which began operations in June 2020 with a swap station at Janakpuri, the west Delhi locality that’s a hub for e-rickshaws. These are low-powered three-wheelers that run on lead-acid batteries — they are electric to that extent, and have been around for nearly a decade. But they are very different from (and cheaper than) the new higher-powered e-autorickshaws running on Li-ion batteries.

E-rickshaws are popular mostly in the northern and eastern States, from Punjab to West Bengal. They typically cost about ₹1.3 lakh and can be got for less in States such as Delhi, where there are subsidies.

Delhi-NCR alone has about 2 lakh e-rickshaws and they are present in a lot of smaller cities and towns across the region, pointed out Pulkit Khurana, co-founder of Battery Smart. “Jaipur has about 25,000 e-rickshaws and you won’t see any autorickshaws in Jaipur, only e-rickshaws,” said his partner Siddharth Sikka.

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But since lead-acid batteries need to be replaced every six months and drivers have to shell out a tidy sum each time, there’s now a business model for swapping stations in winning them over to Li-ion.

“Swapping is very close to fuel behaviour, it’s a two-minute process. For a user that means no downtime, especially for commercial users it means higher earnings because they can be on the road all day,” said Khurana.

For several years now, even electric two-wheelers in India have mostly been low-powered scooters using lead-acid batteries. But that trend has been reversing of late with Li-ion powered electric scooters catching on, following subsidies under the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME) scheme.

The battery-swapping market

EVs didn’t take off all these years the way they should have because of three challenges: high upfront cost, range-anxiety and fast recharging, all three aspects relating to the battery.

Typically, a Li-ion battery costs up to 40 per cent of the price of an EV today. “Imagine you went into a showroom and bought your vehicle sans batteries. Like you buy your mobile phone and then sign up for a network,” explained Chetan Maini, India’s electric car pioneer who now runs Sun Mobility, a Bengaluru-based energy infrastructure company for EVs.

“Because you swap more often, your battery sizes will be smaller…maybe half the size of a typical battery because you don’t need to have all that range,” he said. Besides, the batteries will also have longer life because they are managed properly at the stations, he pointed out. “Which means that over time, you may need a fourth or a sixth of the lithium you import as a country. It’s very important because that is also, at scale, critical.”

Therefore, battery swapping is seeing a lot of early action. In the Union budget earlier this month, Finance Minister Nirmala Sitharaman announced a new battery swapping policy to encourage innovative business models, and the NITI Aayog has already begin consultations on that front.

Gaps to be filled

“There are some huge glaring gaps today,” said Maini. Most of this relates to the subsidies under FAME which do not cover vehicles bought without a battery and also the rather high 18 per cent GST that batteries attract when bought separately. “We are hoping that these anomalies get fixed. To me, the first part of the framework is to make it a level playing field,” Maini added.

The second part is inter-operability; that, according to battery swapping networks, needs to be approached carefully. Currently, the swapping service providers each have their own battery types — usually, these are modular, meaning that the same battery can be used across scooters and three-wheelers just by increasing the number of batteries depending on the power requirement of the vehicle. If it is a cargo three-wheeler, it would need more batteries. But these batteries cannot be interchanged between networks run by different operators — it’s too early to think of that, according to the battery swapping companies.

“The point that a lot of people are trying to solve right now is the swapping piece of it,” said Sreyas of RACEnergy. “Swapping is something that requires an altogether different technology. You just cannot take a fixed battery charging model kind of approach and do some workaround to make it swappable. You really need to build it ground-up…the software, user-interface, payments.”

There are about 50 companies already working in this space and this includes vehicle manufacturers, energy companies like Indian Oil Corporation and HPCL, fleet operators such as e-commerce firms, battery manufacturers and service providers such as swapping companies. “Therefore, you are starting to see an ecosystem being created across all of these companies and their platforms,” said Sun Mobility’s Maini.

“The first thing that the standardisation should cover is safety. Secondly, standardisation should be there such that we don’t curtail innovation,” he said.

The numbers and the usage

But back again to the three-wheeler — battery swapping companies are eyeing them because they run a lot, both as public transport and cargo vehicles. “Seventy million people use them everyday for their first-mile and last-mile commute right now,” said Pulkit Khurana of Battery Smart. “They are the solution for metro feeders, for bus stops, railways stations and small trips to the market. That’s what India uses for its movement, right?”

For him, the lead-acid e-rickshaws are a huge market to tap. “What we do is we target the existing users and move them away from lead acid to Li-ion solutions,” said Khurana. The drivers anyway have to buy a new lead acid battery for ₹25,000 every six months, he reasoned. “That is when we acquire the driver. The process takes about 30-45 minutes. We remove the lead acid battery, put it in the connectors and he’s ready to swap.”

Currently, Battery Smart has enlisted 4,000 e-rickshaws which are swapping daily at 215 stations. On an average, the network carries out 11,000 swaps a day, about 80 per cent of the usage coming from e-rickshaws and the remaining 20 per cent from two-wheelers.

Battery Smart says it has designed a modular battery pack that is compatible across two-wheelers and three-wheelers. At the moment, it has 10,000 Li-ion batteries in service in its network and it expects that number to go up to 3 lakh batteries in a year’s time.

Khurana said there are roughly 2.5 million e-rickshaws on the road today, and at least 500,000 are being added every year. “We realised that e-rickshaw is actually leading the electric vehicle revolution in India.”

Growth in the offing

But e-rickshaws are mostly seen in the North. In places like Bengaluru, Li-ion electric autorickshaws — both passenger and cargo — are increasingly becoming visible on the roads as more charging stations and battery swap stations come up.

So, at the moment, there are actually a few types of electric three-wheelers on the road: e-rickshaws running on lead acid batteries, and electric autorickshaws using Li-ion batteries. The latter segment is again divided into passenger and cargo.

“I would say in our case too most of our vehicles are three-wheelers. across 3-4 platforms,” said Maini of Sun Mobility, which has clocked over a million swaps so far. “In fact, some of our first customers have clocked over 120,000 km, even during COVID.”

Sun Mobility currently has 70 stations in 14 cities. “By the end of March, we should probably be over 100 stations. We are adding a lot of stations every month right now,” said Maini.

He also pointed to the opportunity for taking electric mobility overseas as these technologies and business models evolve. “If you look at Africa, Southeast Asia, South America…they use two-wheelers and three-wheelers and a lot of them are from India and they are all going to go electric in the next five years,” he said.