Despite the absence of a common standard, the battery swapping industry has attracted more than $325 million in disclosed investment, and built a network of over 3,000 stations | Photo Credit: RIDOFRANZ

A Honda battery won’t fit into a Battery Smart network. A Battery Smart battery won’t work at a SUN Mobility station. And a SUN battery can’t simply be swapped into a Yuma vehicle.

Four years ago, that lack of compatibility threatened to derail India’s battery-swapping ambitions after Finance Minister Nirmala Sitharaman announced a national battery-swapping policy in the 2022 Union Budget. Today, despite the absence of a common standard, the industry has attracted more than $325 million (₹2,700 crore) in disclosed investment, built a network of over 3,000 stations and become large enough for the Ministry of Heavy Industries (MHI) to take a fresh look.

The reason is increasingly economic rather than technological.

“For a commercial vehicle operator, uptime is everything. Every minute spent waiting is a missed opportunity,” said Uday Narang, founder and chairman of Omega Seiki Mobility, which recently integrated its Rage+ cargo three-wheeler with Honda Power Pack Energy India’s e:Swap ecosystem. According to Narang, battery swapping allows drivers to return to the road within minutes, improving vehicle utilisation, operational flexibility and daily earnings.

The same logic is now beginning to resonate in larger vehicle segments. Ashok Leyland is preparing a fresh push into battery swapping for heavy-duty electric trucks in ports and mining operations, where vehicles operate on fixed routes and cannot afford extended charging downtime.

“The economics are particularly compelling in closed-loop operations where asset utilisation is critical,” said Alok Verma, President – Head of Strategy and President, International Operations at Ashok Leyland. Verma said the company already has a battery-swapping truck prototype under development and is revisiting the concept with Sun Mobility after an earlier pilot in Ahmedabad. Battery swapping, he added, forms part of Ashok Leyland’s broader effort to reduce upfront electric-truck costs through Battery-as-a-Service (BaaS), financing partnerships and ecosystem-led solutions.

That commercial logic helps explain why policymakers are returning to a sector that looked stalled just a few years ago.

How the market moved ahead

The ministry’s renewed interest marks a notable shift from the original policy debate. In 2022, policymakers sought to create an interoperable ecosystem where batteries could move seamlessly across vehicles and networks. Automakers resisted, arguing that common battery specifications would limit vehicle design, compromise proprietary battery-management systems and create safety and liability challenges. The policy stalled before a comprehensive framework could emerge.

Rather than waiting for a common standard, operators built closed-loop ecosystems around specific vehicle categories and fleet customers, proving that commercial users cared more about vehicle uptime than universal battery compatibility.

Battery Smart scaled to more than 1,600 stations and crossed 100 million cumulative swaps, while SUN Mobility’s Indofast Swap Energy joint venture with Indian Oil Corporation expanded beyond two- and three-wheelers into buses, commercial fleets and heavy-duty truck pilots. Yuma Energy built a strong presence in urban delivery fleets. Data from the Bureau of Energy Efficiency and the Ministry of Power shows that India has more than 2,600 registered battery-swapping stations, while industry estimates place the operational ecosystem closer to 3,200 stations.

From interoperability to affordability

What has changed since 2022 is not merely the scale of deployment but the policy question itself. Back then, the focus was on interoperability and standardisation. Today, policymakers are increasingly examining battery swapping through the lens of affordability.

Industry executives say Battery-as-a-Service models, which separate battery ownership from vehicle ownership, can significantly reduce upfront EV acquisition costs. In commercial segments, operators estimate that removing the battery from the purchase equation can lower initial ownership costs by 30-40 per cent, addressing one of the biggest barriers to EV adoption without relying entirely on direct subsidies.

The model has found acceptance among e-rickshaws, cargo three-wheelers and quick-commerce fleets, where charging downtime directly translates into lost earnings. A battery swap completed in under two minutes can keep a vehicle operating through multiple shifts, creating a compelling economic proposition.

The issues under review

As MHI re-examines the sector, industry participants expect attention to focus on four long-standing challenges.

The first is interoperability, the issue that derailed the original policy push. While closed ecosystems have worked for fleet operators, the absence of common standards continues to limit consumer flexibility across networks and constrain broader retail adoption.

The second is the treatment of battery swapping under existing support frameworks. Although swapping stations are eligible for support under the PM E-DRIVE’s charging infrastructure programme, operators argue that the scheme primarily offsets upstream electrical infrastructure costs such as transformers, grid connections and cabling. The battery inventory, swapping cabinets and proprietary hardware that form the core of the business model remain largely privately funded.

A third issue is taxation. While electric vehicles attract 5% GST, battery-swapping transactions are treated as services and taxed at 18%, creating a disparity operators say affects profitability and slows expansion.

The fourth is the future role of Battery-as-a-Service itself as policymakers search for ways to reduce EV ownership costs without relying solely on vehicle purchase incentives.

Amit Bhatt, India Managing Director at the International Council on Clean Transportation (ICCT), said battery swapping should be viewed as a complementary solution rather than a replacement for conventional charging infrastructure.

“As India seeks to accelerate commercial vehicle electrification, policy support should focus on enabling the most efficient use case rather than prescribing a single technology pathway. Swapping can play an important role in segments such as last-mile logistics, three-wheelers and certain fleet operations where vehicle uptime has a direct economic value,” Bhatt said.

The reality check

The market’s evolution has also revealed its limitations. Honda Power Pack Energy India’s experience with the Activa e: scooter highlighted the challenge of translating commercial success into retail adoption. SIAM data shows Honda produced more than 11,000 units of the Activa e: and QC1 between February and July 2025 but dispatched fewer than half to dealers, with the swap-only Activa e: accounting for just 740 units.

That experience reinforced a lesson many operators already understand: battery swapping works best where vehicle utilisation is highest and where downtime carries a measurable economic cost.

Why MHI is looking again

The battery-swapping industry of 2026 looks very different from the one the government was trying to shape in 2022. It is larger, more institutional, more commercially proven and increasingly tied to the broader question of EV affordability.

The irony is that battery swapping may be getting a second policy life not because the government’s original vision succeeded, but because private capital proved the market could grow without it. The question facing policymakers is no longer whether battery swapping works.

It is whether the next phase of policy can help turn a proven commercial mobility solution into a broader tool for accelerating India’s electric vehicle transition.

Published on June 16, 2026