Battery Swapping More Affordable For EVs: Sun Mobility’s Chetan Maini
Chetan Maini, co-founder of Sun Mobility, pointed out that battery swapping significantly reduces the cost of owning an EV
There appears to be a consensus among Indian auto industry watchers that electric vehicles are the future. The country’s policy has reflected this so far, with the FAME-II scheme offering subsidies and incentives to push EV adoption. The upcoming FAME-III policy is further expected to focus on electric charging infrastructure and public transport electrification.
But, it is important to make EVs affordable to boost adoption, not just for private use but also for commercial use. And battery swapping might be the way to go. Chetan Maini, co-founder of Sun Mobility, pointed out that battery swapping significantly reduces the cost of owning an EV. The company offers battery-as-a-service, where users can visit one of their stations, and swap a used battery for a fresh one in two to three minutes, rather than charging for a longer period.
Swapping not only reduces the upfront cost of buying an EV (since you don’t buy the battery), but also addresses issues such as a lack of charging infrastructure, and fleet riders’ need for continuous use, as they can't afford long charging times.
“By removing the battery from the equation of a vehicle, you get the price of an electric vehicle to be cheaper, equivalent to an internal combustion engine (ICE) vehicle, and you get the cost per kilometre to be cheaper. And you're swapping in a couple of minutes, which is similar to refuelling, in fact, faster than refuelling,” Maini told The Core.
Sun Mobility has battery solutions for over 25 vehicle types across two, three and small four wheelers. The company has 650 stations across 18 cities in India and clock 1.2 million swaps every month.
The future is going to be around energy and creating a ubiquitous solution that can really accelerate affordable electric mobility,” Maini, who is best known for making India’s first electric car, REVA, told The Core. “The vision of affordable electric mobility remains the same for the last 30 years for me,” he added.
In The Core Report: Weekend Edition, financial journalist Govindraj Ethiraj spoke to Chetan Maini about how the EV industry has changed over the last few decades, and how he runs his battery swapping business.
Excerpts:
First, I want you to help our listeners and viewers understand how a battery really works and how it is similar and not similar to, let's say, a tank of gasoline, whether it's a two wheeler that we are talking about or a four wheeler. So you're free to start wherever you want.
Sure. I mean, you know, batteries are more a storage device, right, that you put in energy and you take it back out. So they just store the energy. So you're putting electricity and taking out electricity. In the case of fuel, they're actually burning it. Every litre of fuel you burn becomes carbon dioxide and all the other chemicals, and it's in the atmosphere. So in a way, one's a sort of energy storage and one's a fuel that actually burns with that.
And then, of course, batteries degrade over time. They can hold less and less energy and they can reduce their performance over time in terms of how much they can store on this front. A litre of fuel may have approximately 10 kilowatt hours of energy, right? So, if you take probably a similar amount of the same weight, if you were to take a battery, it may have 200-watt hours. So probably 50 times less than the same weight of fuel. And that's a big challenge in this area. Of course, when you burn fuel, only 25% goes in useful energy, 75% is lost. But when you use something for a battery, you can get 85% to 90% of useful energy in it.
Clearly, therefore, the amount of weight of the battery and the size of the battery is disproportionately larger compared to that of what you'd use in fuel. Therefore, the importance of efficiency, battery sizing, all that becomes very critical as you think of looking at fuel versus batteries.
Now, when you're actually driving, let's say, and let's stick to electric two wheelers because that's where the big market in India is, or for that matter, three wheelers as well. How does a battery work in terms of the way it's powering your vehicle and the way you are extracting or pulling energy from it as you drive or accelerate or slow down and so on.
In a battery, it then goes to a motor controller, which is thought of like a fan regulator. You know how you can change your speed on this front? I'm just giving a much more complex version of it. And then to a motor which will be similar to your fan, which then drives the rear wheels and powers the vehicle. And as you accelerate, it's like increasing the regulator speed of your fan, you increase it. Only difference is that when you brake, the motor becomes a sort of generator and can charge the battery back. And one can get, you know, anywhere from 5-20% of the energy back as that happens.
That's very different from fuel because you're taking a litre of fuel, you're combustioning it. That produces power, which then powers the rear wheels, and you have exhaust and heat that's produced for the outcome…So that's sort of a broad construct between what you think of an ICE vehicle or internal combustion engine vehicle and electric vehicle.
And just on that point of the regeneration, as it's called, how does that energy come back to the battery?
Sure. So, you know a motor, when done in reverse direction. Or with the electronics way, a motor can become a generator. So think of it as a generator, and therefore it's charging the battery back. On the front, there's some electronics to ensure it's been done correctly. But it just becomes a generator. So it takes some of the energy of moving, which is your kinetic energy, and converting back back. Instead of you using brakes to burn that up in heat, you actually can use that as a generator and charge the batteries back. This really helps, especially in India and stop and go driving conditions.
And comparing to a litre of fuel again, and let's say a two wheeler electric versus internal combustion engine (ICE) or petrol, how is the way I drive it going to impact the way energy is used? For example, in fuel, I could accelerate suddenly, slow down, and I could keep accelerating till the end. As I understand, it doesn't work exactly like that with stored energy or battery in this case.
Most batteries will probably give you very similar performance till around 80% of it is discharged and between 80 to 0, it may have slightly reduced performance. Sometimes it may not have the reduced performance, but the OEM may decide to reduce the performance.
So you're aware that you want to get more range, so it may not be necessary the battery is a challenge, but it's about, you know, a sort of emotional thing to say, hey, I got to start thinking through it. If everything was perfect, you wouldn't worry about it, but if you… If things slow down by itself, you start to say, okay, I need to think about this area, right? So from that point of view, it looks at it, otherwise the performance is reasonably uniform, but does go down slightly towards the end of it. So you can accelerate, you can do everything, but at very low states of charge, you'd have some gap in the performance, maybe 10 to 30% when you come down to 80% or less.
And in general, the electronics ensure that you don't drain it to zero. And you stop at a certain point so that the battery is still in good condition to be charged again?
That's correct. So most electric vehicles will have a gauge. The gauge would have low power modes. If you go too low, it reduces the power mode. Some of them have multiple low power modes. Some of the vehicles also have a reserve, you know, where you can actually turn off and on the key or press it, and you can go, say, 2 km. So there are different methodologies that have been put in place and enough indications.
But it's a bit different you know, if you have in a scooter five litres or seven litres of petrol, that could give you maybe 350, maybe a full battery is giving you 120 to 150. So your starting off size is much smaller. And so there's a bit more initially of awareness around the fact that there is less energy. But once people start to use it, they realise that they're doing only 40, 50, 80 a day, they have no problem. But it's initially a little bit of a different move, a different perspective that it takes probably a month to get used to.
You've been in the space for close to three decades now. What's changed in storage and batteries in these three decades? And when or how have the maximum, let's say, changes happened, or the maximum incremental changes, when did they happen? And what has that resulted in?
Sure. When we started, you know, lithium ion was out of range of cost. It was lead acids, and lead acids are, you know, would be around 25 to 30 watt hours per kilogram. So that's the energy per kilogram. A top end lithium ion cell would be around 250. So it's 8-10x lighter than probably a lead acid. So that's like, that's the kind of shift you're talking about. Lithium ion has done that, and that's probably growing every year. So, you know, it was probably 150 ten years ago. It was, you know, 100 before that. So you've seen an increase in energy density. That's one side of it. The second, probably 20 years ago, the price of lithium ion batteries may have been $1,300 per kilowatt hour. Today, sub $100. So there's a 13x drop in pricing. There is an 8-10x increase in the performance compared to older technologies like lead acid.
This has been over the last few years, but probably around seven years ago, you got these magical areas where pricing was becoming reasonable and the technology had matured enough that you saw a huge impact. And that's where you see, in the last seven years, a significant increase in the adoption of electric mobility as it's hit that sort of point. But there's continuous innovation, and every year you're seeing prices go down around 8% year on year, and you've seen performance go up around 5 to 8% also.
And how are batteries made? The kind, again, we are seeing in two wheelers in India, or for that matter, even four wheelers.
Most of the batteries you see today are lithium ion chemistries, that is lithium ion NMC, which is a nickel, manganese, cobalt. And you have LFP batteries, which are lithium ion phosphate batteries. These are two predominant ones, and in them there are variations. And there's also some new chemistries that are trying to combine the benefits of both.
Batteries, the production lines, look at making an anode, making a cathode, these are sort of layers that come through. Then they are either rolled or stacked together, and then they're filled with the electrolyte, and then they go through what's called a formation process to get them ready, and then they're tested and shipped out.
Apart from the complexity and sophistication at the core of it, the battery that we are talking about in a two wheeler or in, let's say, in an advanced Tesla, is the same as the battery that I would use to power a radio or any electronic gadget. Is that correct?
The cell could be reasonably similar, but they would have a little bit different requirements. So if you were powering a Tesla, you would lose a higher power cell. If you were, if you're looking at your phone, you'd use a high energy cell because you want to last longer for the whole day, and you're not, it's. You're discharging over 20 hours. Well, you can drive a car very fast over a few hours and discharge it, so it needs a lot more power.
As you look at technologies like in the case of battery swapping, you want very long life, so you have a chemistry that's more longer life. So they are similar chemistries of lithium ion, but the way you would use the anodes and the cathodes and the tools you'd use would be slightly different to get what you want from a business point of view.
And you mentioned thermal management, and, you know, we've been seeing very hot days in India. Heat waves, to be specific. Does that affect or could it affect the condition of the battery that's housed inside a two wheeler or a car in a country like India or anywhere where we see such high temperatures?
Yes, it does. If you were on a two wheeler and you parked your vehicle in the sun, then the battery would heat up the ambient temperature. When you drive, it gets even hotter, and then you charge, it gets even hotter. So, you know, you could see temperatures go above 50, 55 degrees, which start to deteriorate the battery significantly. So a battery at 25, compared to a battery at 55 may have three times more life. So you see sort of significant deterioration in the battery in this area.
In a lot of the cars today, they're liquid cool batteries. And so they have an opportunity to run an air conditioning system. At least when you're charging, they do it. And some of them, even when they're parked, can work on it, but then use their own energy to keep the batteries cool depending on the philosophy.
In the case of something like swapping, when it goes into the station, we cool the battery. So when it comes out, you have a battery at 25, 27 degrees. And then when you take in the vehicle, the impact is much less. So depending on the type of solution, temperatures play a very important part in terms of reducing performance, they increase the charge time on this front. And of course they can also create safety hazards if they're not correctly managed.
Tell us about the swapping network that you've built and are now building further.
At Sun Mobility, we started this to really address the challenges here. By removing the battery from the equation of a vehicle, you get the price of an electric vehicle to be cheaper, equivalent to an internal combustion engine vehicle, and you get the cost per kilometre to be cheaper. And you're swapping in a couple of minutes, which is similar to what is refuelling, in fact faster than refuelling. So you sort of address that area.
What we've done is we've tried to see, you know, two solutions. One is for the small form factors of two wheelers, three wheelers and small four wheelers, up to, say two tonnes, which constitute 80% of vehicles in India. And we've created one solution for all of them. So you can use one battery, you can use two batteries, you can use three or larger vehicles, use four. So between 30 seconds to, say two minutes, you can swap your batteries in and out. So the stations are identical, the battery is identical. It's an open architecture, interoperable within multiple vehicle types.
Today we have over 25 vehicle types running on our battery solution across two, three and small four wheeler vehicles on this platform . We have around 650 stations. We do around 1.2 million swaps every month in these 18 cities and have close to around 450 million km that we have clocked across these various platforms.
At what point do people usually bring their batteries and drive in and say, okay, I want to swap?
Yeah. These are in key cities that we've done and others you're piloting. So Delhi, we have around 400 stations. Every 2 km we have a station. In Bangalore, we have around 100 stations, which, to give you a comparison, Bangalore has an LPG network for around 200,000 autos, and the LPG network is 84. And in other cities like Chandigarh or in parts of Kerala or in other places, we're in a smaller region because you don't have to be in the entire city. And so the stations are located where there's a high density of the traffic that we're looking at through. So it's a fairly good network within the areas that we’re operating.
The battery itself is designed by you in a way that it can either as one unit or multiples of units fit in, as you said, 25 different vehicles from different manufacturers. And of course, form factors. Two wheelers, three wheelers and four wheelers.
Yes. And an important ingredient in that is we have what we call, you know, a dock. And this dock is where the battery fits into. And the dock has a bit of electronics and a small computer and software, and that docks to the vehicle. So we keep a standard battery, but through this interface unit that we have, the energy interface unit, we're able to program exactly what that vehicle needs.
For example, how the state of charge is put to gas, or how the regenerative braking, how much energy we give. All of that can be programmed based on what the requirement of that vehicle is. So this enables us to quickly look at it. And yes, as you talked about, we design our batteries, we engineer them, we manufacture them, then assemble them in house. So we have an end to end control of our batteries, of our stations, of the cloud, of the docks, the entire net, all the technology and the network is fully done by us in house.
When I buy an electric car or a two wheeler, it comes with a battery already. And that is a significant part of the cost or a good part of the cost of that vehicle. So am I able to then give that battery to you and then take your battery. At what point would I do that if so?
We have two models. We call it Battery as a Service and Mobility as a Service. In battery as a service…Think of you walking into a showroom and buying your vehicle. You buy it without the battery. Like you'd buy your smartphone without the SIM card. Then the dealership there will get you on our platform by filling in your information. You have an app and then you have what's called a key fob with an RFID key, which you can use then and gives you the initial batteries on that front. Then when you go to a station and run low on charge, you put your key fob on there, it automatically detects your vehicles. You can go through the swap process. The whole process is automated and at the end, based on how much energy you use, it bills it to you.
You never own the battery. You're always using a battery from the x station, and you only pay for what you use. You use half the battery, you pay for half the battery. That's how it's constructed.
In mobility as a service for some, for fleet owners, we give you the vehicle and the energy and data integrated. So a lot of fleets want to accelerate their deployments. And we give them the entire solution there. So those vehicles are on our platform where on a cost per month, we give them X number of kilometres. And they can run the entire vehicle. They manage the driver part, we manage the vehicle and energy part and deploy.
You've tied up with Indian Oil, and that partnership obviously helps you access their network of over 30,000 stations. But could other players also be offering this service tomorrow? And if so, then would people have the ability to interchange? Is there some other analogy that we can apply here?
I think the analogy is sort of like it's a service provider. You sign up with a service provider X for your telephones. You can't go from one to the other. Similarly, if you buy a gas cylinder, you're with an HP or x. So you're a service provider. So think of Sun Mobility as a service provider where you sign on… Now, some companies offer multiple swapping providers. So when you go to get your vehicle, you may, you may choose in the future for company A or B like today, you choose mobile provider A or B.
And once you're on there, then you're on that platform because it's an expensive asset that has been tested against that vehicle, it's all been proven out, because the OEM is selling it, in a way.
But although we have upgraded several thousand vehicles with an older battery where customers have come to us and we provided them with our dock and we've upgraded them because the batteries have gone bad after 18 months and instead of them buying a new battery, they said, can you put a swap solution? So those retrofit solutions are very much possible in addition to offering a new vehicle with this battery.
And could you give us a sense…if you were to pick again a two wheeler to start with, if I were to go for battery as a service solution wherein I'm not buying the battery when I'm buying the two wheeler and then I'm signing up with you, so what could be the price difference and what would I pay to you roughly? And then what would it cost me, let's say, over one year of use?
So if you were to, let's say you looked at a scooter, an Internal Combustion Engine scooter, a scooter which had looked identical, and had a fixed battery in it, and a third scooter again that looked identical, which had swappable battery. Probably the one on the internal combustion would cost you around one lakh of rupees and would probably run around Rs 2 per kilometre on your operating cost. The electric one would probably cost you Rs 1.4 lakhs on this front, we have some subsidies and some concessions; it reduces slightly. And your cost per kilometre may be, say 30 to 40 paisa, depending on what infrastructure you use. If you're doing it at home, it would be much cheaper, maybe even 20. In the case of swapping, your probably cost would be around Rs 70,000. So you're much cheaper on the purchase price even to an internal combustion engine vehicle. And probably your cost per kilometre is around Rs 1.
In the case of a battery as a service, you're just paying a certain amount, even ten years from today. And also you get automatic upgrades. So today, every year, if you buy the battery, it deteriorates like your cell phone. You notice how it gets bad. It keeps getting worse on this or anything, any battery would do. In our case a year and a half ago, we had a battery compared to today, which is 40% better. So if a customer has come on our platform, they're getting these upgrades. And as technology keeps changing, you get new and newer upgrades. So in a way, in batteries or service, your product in the next five to ten years gets better. Whereas in a fixed battery, your range keeps decreasing and you have, you know, after every few years, a very high replacement cost, which could be probably 50% of the cost of the vehicle.
And right now you're saying that if I were to use battery as a service, as a model on an electric two wheeler for one year, my gross or my total cost at the end of that one year should be much less for a battery, for a battery or an electric two wheeler versus a petrol two wheeler,
Significantly lower. And also, I think the other part is, you know, a lot of people don't have infrastructure. We're talking about 20% of people have infrastructure, but 80% of India doesn't have infrastructure. And the second today, a lot of our customers are fleet providers or using it on B2B businesses, for deliveries and everything. And their delivery requirements are changed every day. They cannot wait for, you know, 3-4 hours to charge. They can only wait for a minute or two because of their utilisation, their earnings.
And how often are people coming and changing or swapping batteries? Two wheelers, three wheelers, four wheelers.
At least once a day, sometimes twice.
Some vehicles are used for 16 hour shifts. So, for example, when you look at something like an Amazon Fresh, they go every 2 hours, delivery and they run 16 hours, but they run with two drivers
Because they're doing a lot of kilometres a day, which is just not possible with regular charging given the fact that the charging time is so long.
Are there lines?
Yeah, sometimes there are. You know, it's like if everyone reaches the same time, you have it. So what we do have is we have the app that tells you where every station is and how many batteries are ready. Not everyone uses it, but the tech is available, and the ones who use it find it much better. We also have a WhatsApp chat bot that tells you you can just say hi, and it tells you which is the closest station, how you can go there.
In general, there are some peak times which could happen in a particular region, like when you come to a petrol station or a CNG bunk. But with technology, we're making it easier for the customer, so he has awareness and can choose on his way back to go to one station versus the other.
And what was your starting inventory of batteries for this project? And what is it today, and how is it replenishing or growing?
We have over 50,000 batteries on the field today that do, like I said, around 1.2 million swaps a month. In terms of starting inventory, it keeps adding on. So as we add more vehicles, the vehicle needs a battery and then around 20% to 30% extra batteries are put in stations. If you use one scooter, then, you know, if you use ten scooters, you may sort of, you know, put a station that has two batteries in it extra to support those ten scooters. It's not a one size fits all and just goes full bank. It's just as the business grows, you start adding more and more. All our batteries are connected in real time. We get over 120 parameters every second. All our stations are connected in real time, so we know real time usage of vehicles, state of charge, how the stations are being utilised, and this allows us to optimise the network and provide this information to the customers, since everything, the whole network is fully connected and alive.
So how old would be the oldest batteries currently out as part of this 50,000 batteries?
I would say we started in 2017. Our oldest batteries, I would say around five years old in the field,
And they're still running?
Yes. Our stations automatically check the battery every day, and they can even test it and reprogram them. So a lot of every day before batteries are given out, we do multiple checks. And the health is known. If the health ever drops below a certain level, then we quarantine that battery. You can't access it, and our service person goes and checks it. And then if there's something that's needed that cannot be done remotely, like a software upgrade or something, then we actually physically do it and send it back. So when a customer gets the battery, they always have the energy in it. It's a customer promise that we have.
And does it happen, or rather pretty sure it does happen, that batteries completely die for various reasons or have died over, let's say, the last five years?
Yes, I think there have been, you know, especially during COVID we had some challenges, like most companies, because people took the batteries in their vehicles and didn't come for three, four months back to our stations. So although there are security systems that shut off the batteries, there were, you know, you had some damages on that front, and then you had to take care. So I think those sort of applications were, we had some challenges at that time, but now a lot of that is even further fixed around software to allow it to even last longer without, you know, even when it's very low on charge.
But, you know, earlier batteries were, you know, a few days. Today our battery shut off and they could last for four months, five months maybe, without being charged. So of course we don't want to keep the asset away that long because we're not making money. So using our technology, we get in touch with the customer and everything that they're going on vacation, we'll take it back. But the battery today will self protect itself for an extended period of time.
Where are you in terms of profitability of this venture and how are the numbers looking?
Well, I mean, you know, at this stage, it's been, the first stage was technology development. The second was, you know, scaling it up to a certain level. And now with Indian Oil coming in, we're really looking at a large scale. So your investments are disproportionate in the early years, you can imagine, because your philosophy is slightly infra first
The investment sort of precedes, the deployments and the revenue a bit in this area. And that over time, as this network gets large enough, that gap is much smaller. But in the early days, that gap is a little larger as you're going to new cities on this front.
With the new structure, which we have going forward because we have a joint venture, and then we have Sun Mobility that supplies batteries and stations and everything, Sun Mobility will be profitable next year. And the joint venture, since it's going to be investing a significant amount of money, while it will be EBITDA positive in a couple of years, will probably take maybe three years to be fully profitable, considering the investments that you're putting in, because you have high depreciation on that front.
You're obviously known as the man behind Reva. If you were to, in maybe 30 seconds or 60 seconds, draw the arc between the creation of, let's say, battery operated golf caddy, which is what I remember to the battery itself in this format. How would you describe this journey?
I was in cars, in personal mobility. I'm in two, three and four small four wheelers that are 80% of India. And that's where all the businesses and we also, we didn't touch upon…We do buses and trucks, which is 1% of India and 50% of the energy and emissions. So there’s been a transition to say, I think multiple people can trade with products. The future is going to be around energy and creating a ubiquitous solution that can go into all the OEMs and that can really accelerate affordable electric mobility. So the vision of affordable electric mobility remains the same for the last 30 years, for me—it's around where I believe the impact in society could be larger, in business could be larger.
